COMMUNICATION FROM THE COMMISSION - EUROPE-ASIA CO- OPERATION STRATEGY FOR ENERGY
Date: 1996-07-18
Institutions: European Commission
Subjects: Asia, cooperation agreement, energy policy, environmental protection, security of supply

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.07.1996 
COM(96) 308 final 

COMMUNICATION FROM THE COMMISSION 

EUROPE-AStA 

CO-OPERATION STRATEGY 

FOR ENERGY 

Table of contents 

SUMMARY 

INTRODUCTION 

PART I: BACKGROUND 

1. 

THE  ENERGY  SECTOR  IN  ASIA,  FUTURE  CHALLENGES  AND  HIGH 
STAKES FOR EUROPE 

1.1.  A wide diversity of socio-economic conditions 
1.2.  High growth rates 
1.3.  A new energy crisis 
1.4.  The need for private sector involvement 
1.5.  Major impacts on the environment 
1.6.  Reforms in the energy sector 
1.7.  Major consequences for Europe 

EXISTING ENERGY CO-OPERATION FRAMEWORKS 

2. 
2.1.  The European Community 
2.2.  The Member States 
2.3.  Other donors and lending agencies 

PART II: STRATEGY 

A NEW STRATEGY FOR ENERGY CO-OPERATION WITH ASIA 

3. 
3.1.  Three objectives 
3.2.  The new Community framework 
3.3.  A global intervention 
3.4.  A specific approach 

3 

4 

5 

5 

8 

11 

11 

4. 

SELECTION  CRITERIA  FOR  COMMUNITY  ACTIVITIES  IN  THE  AREA  OF 
ENERGY CO-OPERATION 
4.1.  Mutual interest and partnership 
4.2.  Subsidiarity in regard to action by Member States 
4.3.  Synergy with other International Donors and Lending Agencies 
4.4.  Sustainability 

12 

PRIORITIES FOR CO-OPERATION IN THE ENERGY SECTOR 

5. 
5.1.  Priority areas 
5.2.  Other sectors 

IMPLEMENTATION 

6. 
6.1.  Creating dialogue 
6.2.  Targeting actions 

6.2.1 
6.2.2 
6.2.3. 

Increasing awareness 
Adapting institutional frameworks 
Supporting European energy companies and operators 

6.3.  Allocating sufficient resources to meet challenges 

CONCLUSION 

13 

15 

18 

SUMMARY 

Due to the demographic and economic growth taking place in Asia, the demand for energy could double 
between  now and 2005.  This growth  will have repercussions for  Europe  in three areas  : on  security of 
supply (Europe will be dependent on the outside world for  55% of its requirements  in 2005 and  75% in 
2015),  on  the  European  energy  industry  (Asia  already  represents  half  the  world  market)  and  on  the 
global  environment  (protective  measures  implemented  in  Europe  will  have  only  limited  effect  unless 
action  is taken simultaneously  in Asia). 

The energy  sector  therefore  deserves  special  attention  in the  context  of  relations  between  Europe  and 
Asia, so it is worthwhile to work out a strategy for co-operation  in this area.  This new strategy  is all the 
more  necessary  since  the  co-operation  activities  currently  being  carried  out  by  the  Community,  the 
Member  States  and  other  providers  of  capital  are  yielding  useful  but  only  partial  solutions  to  the 
challenges facing the sector in Asia. 

Working  within  the  framework  of  the  new  Asian  strategy  on  the  one  hand  and  current  considerations 
about  a European  energy  policy on the other, there are three objectives  which  need  to be considered  in 
respect of energy co-operation  between  Europe and Asia  : strengthening the security of supplies of Asia 
and Europe, participating  in Asia's energy markets and protecting the global environment. 

More specifically. Community co-operation  will aim to establish  a dialogue  in the area of energy  policy 
and will  help to mobilise the private sector (which  is being asked to play an  increasingly  important part 
because  of  the  amounts  of  money  involved), while  preserving  the  long-term  public  interest  by  taking 
into account the social and environmental  aspects of energy development. These actions will at one and 
the same time affect  energy  supply, through  optimal  development  of  local  resources, and also demand, 
through consumption  management. 

Community  activities  will  be selected  according  to the criteria  of  mutual  interest,  subsidiarity  - taking 
into  account  the  activities  of  Member  States  -  synergy  with  other  international  donors  and  lending 
agencies and considerations of sustainability. 

Given  this  approach,  priority  will  be  given  to  the  electricity,  natural  gas  and  coal  sectors,  energy 
efficiency  and  the  energy  supply  of  rural  areas  in  particular  by  an  increased  use  of  new/renewable 
energies. 

The  implementation  of  this  strategy  will  first  require  the  creation  of  an  on-going  dialogue  on  energy 
policies with the Asian authorities.  Depending on specific geographical  factors and on selected  sectoral 
priorities,  the  Community  will  intervene  progressively  on  several  different  levels  :  information  on 
European  solutions, adaptation  of institutional  frameworks  and also assistance to companies and energy 
operators.  With  this aim, it  is necessary to consolidate the Community  instruments already  established 
and to target existing resources. 

IimUJÏMJCTlW 

Because of the economic  and political  importance of Asia, the European  Union, at the  European  Council 
meeting  held  at  Essen  from  8 to  10 December  1994, confirmed  its  intention  to  strengthen  co-operation 
and  dialogue  with  countries  and  organisations  of  the  region.  The  Council  invited  the  Commission  to 
propose concrete  initiatives to this effect,  within the framework  of the new Asia strategy. 

In addition,  the  White  Paper  entitled  "An  Energy  Policy  for  the  European  Union  " introduced  by  the 
Commission  in  December  1995,  underlines  the  importance  of  developing  international  relations  in  the 
field  of energy and recommends the elaboration of an Asia energy sector strategy. 

This  strategy,  the  subject  of  the  Communication,  is  presented  within  the  framework  of  policy  options 
already  established  both  at the  geographical  and  sectoral  levels.  The  first  section  highlights  the  main 
problems  facing  the  Asian  energy  sector  and  the  related  issues  for  Europe,  as  well  as  the  existing 
international  co-operation  frameworks.  The  main  features of  a  new  Community  co-operation  strategy 
include  three  complementary  objectives,  plus  priority  sectors,  selection  criteria  and  guidelines  for  a 
future action plan.  These are described  in the second section of the Communication. 

O 

Part I. 

BACKGROUND 

THE  ENERGY  SECTOR  IN ASIA. FUTURE  CHALLENGES  AND HIGH  STAKES  FOR 
£HRQEE 

1.1.  A wide diversity of socio-economic conditions 

Asia  now  has  a  population  of  some  3  billion  inhabitants  and  it  is  undergoing  a  process  of  rapid 
urbanisation.  The countries  under consideration  here,1 mostly developing  countries, generated  a Gross 
National  Product  (GNP)  of  more than  1500 billion  dollars  in  1994.  Nevertheless,  the average  annual 
income per inhabitant  in these countries varies between  less than  150 ECU and  more than  12,000 ECU, 
which  indicates  a wide  range  of economic  and  social  contexts  (Annex I).  These  imbalances  are  also 
reflected  in the energy  sector, with  some countries such as Bhutan and Nepal  consuming the equivalent 
of  less  than  20  kg  of  oil  per  capita  each  year,  while  others  such  as  China,  Thailand,  Malaysia  and 
Singapore  consume  more than  600 kg of oil  equivalent  per  capita,  compared  with  4000  kg  for  Europe 
and  about  8000  kg  for  USA.  The  proportion  of  households  supplied  with  electricity  varies  from  less 
than  15%  in  some  countries  to  almost  100%  in  others.  In  today's  Asia  more  than  a  billion  people 
exclusively use either wood or vegetable or animal waste as their principal  source of energy for  cooking 
and heating. 

1.2.  High growth rates 

The  economies  of  most  of these  Asian  countries  have GNP figures  which  are  growing  at  some  of the 
highest rates in the world (almost  10% per year, or more in some cases).  The Asian region  is  therefore 
becoming  a prominent  market,  with  half the human  race and  more than  a  billion  consumers  who  will 
have significant  buying power by the year 2000. 

In  1995, the  total  annual  consumption  of  primary .energy  in  Asia  will  be  equivalent  to just  over  1.7 
billion  tonnes  of oil, which  is already  1.3 times the total  consumption  in the  European  Union,  without 
counting Japan, which  consumes 0.45  billion tonnes of oil equivalent  by itself.  However, according to 
the predictions  of the  World  Bank and the Asian  Development  Bank, this figure  could  double  between 
1990 and 2005, with oil products levelling off,  coal accounting for a larger share and a rapid  increase in 
the  use  of  electricity  and  natural  gas.  Hence  in  200$,  Asia  could  be  consuming  28% of  the  world's 
energy, Europe  13%, Latin America 6% and the countries of the Mediterranean  and the Middle East 5% 
(Annex 2). 

The electricity sector should grow more rapidly still with an installed capacity tripling from  250 GW in 
1992 to  about  750 GW  by  2005, an  increase  which  is equivalent  to the  total  installed  capacity  in the 
European Union in  1993.  This will involve almost 400 billion ECU in investment during that period. 

Natural  gas  is  also  expected  to  grow  very  rapidly  (at  a  rate  of  more  than  10%  per  year),  with  a 
considerable  increase in proven reserves and  implementation  of major  national and regional  production, 
transport and distribution  programmes. 

'Countries presently benefiting from Community cooperation: Afghanistan, Bangladesh, Bhutan, Brunei, Cambodia, 
China, India, Indonesia, Laos, Malaysia, Maldives, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Thailand and 
Vietnam. 

1.3.  A new energy crisis 

The  explosion  of  the  energy  demand  in  Asia,  caused  by  this  very  rapid  economic  growth,  is 
unfortunately  being  confronted  with  energy  production  capacities  which  are  often  inadequate.  Major 
energy  losses  whether  at  production,  transmission,  distribution  or  end-user's  stage  contribute  to 
exacerbating those  difficulties. 

These  imbalances  between  energy  supply  and  demand  are  causing  very  severe  economic  and  social 
disturbances  in many countries  in the region, both  in cities and  in rural areas.  The virtually  permanent 
electrical  load-shedding  which  takes  place  in  China,  India,  Indonesia  and  the  Philippines  has  had 
particularly  negative  effects  in recent  years, costing  more than  1% of  GNP  in  some cases.  Losses of 
electricity due to both technical  and non-technical  reasons exceed 20% in many countries  in the region, 
compared with  less than  12% in Europe. 

The explosion  in the demand for the transportation of both people and goods is also causing, and may be 
expected  to  continue  to  cause,  a very  high  rate  of  growth  in the  demand  for  oil  products  resulting  in 
particular  from,  on  the  one  hand,  increased  demand  for  private  vehicles,  and  on  the  other,  increased 
transport  of  goods  by road.  Furthermore,  in  most  Asian  countries this growth  may  be expected  to  be 
more rapid than the growth  of the economy as a whole.  Reducing the dependence on oil  is a common 
concern  in Asia today  : in  India, the oil  bill  has been  a major  import  item  for  many years;  Indonesia, 
which  is an  oil  producer  and  a member  of OPEC,  is now becoming  a net  importer,  and  China,  which 
until  recently  was  producing  enough  (145 million  tonnes annually) to meet  its  requirements,  may  also 
have to start buying from  the world market in the near future. 

1.4.  The need for private sector involvement 

The (insufficient)  expansion  of the energy sector  in Asia over the  past decade, mainly based  on  public 
investment, has contributed  towards the accumulation  of  large public foreign  debts (totalling about 300 
billion ECU) which are worrying governments.  Faced with the tremendous amount of capital needed for 
growth  in the energy sector, which  is estimated at one hundred  billion  dollars per year, and taking  into 
account  the  limited  capacity  of  multilateral  lending  agencies  (about  5  billion  ECU  per  year  for  the 
energy  sector  from  the  World  Bank  and  the  Asian  Development  Bank  put  together),  many  Asian 
Governments are attempting to mobilise private capital, either nationally or internationally. 

This situation  is currently causing radical structural changes, since the main obstacle to the mobilisation 
of the private sector is not so much the lack of financial resources - to some extent available locally - but 
rather the present legislative, institutional and pricing structure which means that investment in energy is 
not sufficiently  attractive. 

1.5.  Major impacts on the environment 

Even  now  the  development  of  the  energy  sector  in  Asia  is  already  causing  significant  environmental 
damage at national, regional  and global  level  ;  for example China and  India burn  1.5  billion  tonnes of 
highly  polluting  coal  each  year (accounting  for  about  12% of  world energy  consumption)  and recent 
predictions  (Annex  3)  indicate that these two countries alone will  be emitting about one-quarter  of the 
world's CO2 into the environment by 2010. 

Both China and India have ratified the UN Framework Convention on Climate Change which aims, inter 
alia, to reduce global C02  emissions.  It is difficult to see how the vast increase in coal use planned with 
the foreseeable future  in these countries is compatible with their position under the Convention.  Without 
a  strong effort  in this regard, the  increase  in C02  output  from  Asian  (and  other) developing  countries 
threatens to eclipse or at least seriously compromise the efforts  to reduce global C02  emissions. 

In parallel with this, large-scale deforestation  (only due partly to the consumption of wood or charcoal to 
meet  the  energy  requirements  of  rural  and  urban  populations)  is further  worsening  the pressure on  the 
environment  in  some  countries.  This  last  aspect  affects  the  poorest  population  groups,  particularly 
women  and  children,  who  are  forced  to  make  long journeys  to  meet  these  basic  needs.  Finally,  the 
creation of large dams causes major environmental and social problems which are often  badly managed. 

1.6.  Reforms  in the energy sector 

Radical changes are currently  being seen  in the energy sector in Asia.  These are taking place along live 
main lines : 

• 

• 

• 

• 

• 

re-defining  «the role  of  the  State  :  new  forms  of  public-private  partnership  are  being  set  up  in a 
growing  number  of  countries.  This  leads  progressively  to  more  independent  (either  mixed  or 
private)  energy  companies,  for  the  purpose  of  better  efficiency,  diversification  of  sources  of 
financing and the provision of a wider range of services.  Such strategies should allow governmental 
policies  to  concentrate  on  long-term  orientations  and  appropriate  energy-sector  regulations  and  to 
leave production and distribution to market-oriented operators. 

implementation  of  new  energy  technologies,  which  are  cheaper  in  terms  of  both  investment  and 
running costs, and also cleaner and more efficient  (for  example combined  Cycle power stations and 
gas turbines for cogeneration), 

the desire to reduce the dependence on oil  by pursuing  policies  in the areas of energy  management 
and substitution of primary energy sources (gas and coal), 

an  increasing  consideration  given  to  the  environmental  impact  of *energy  projects  in  terms  of 
population  displacement, the localenvironment, consequences for towns and cities and also on rural 
ecosystems.  Despite  this,  certain  large  schemes  are  already  underway  and  are  still  proceeding 
notwithstanding the recognised negative environmental  impact, 

a  greater  attention  paid  to  developing  viable,  decentralised  solutions  for  rural  or  peri-urban 
electrification.  In many countries the  rural  population  still  counts for  60% of the total  population, 
and often  does not have the energy infrastructure  wjiich  is needed for productive activities. 

1.7.  Major consequences for Europe 

These significant  changes in Asia, which involve both the economy in general and also the energy sector 
in  particular,  will  have  repercussions  for  Europe  in  the  areas  of  security,  employment  and  the 
environment : 

•  The  very  rapid  growth  of  the  demand  for  energy  in  Asia  will  have  a  severe  effect  on  the  world 
market, particularly the markets for oil, refined  products and natural gas, and will certainly also have 
a not inconsiderable  impact on the security of the energy supply in Europe.  Upward price pressures 
could  cause  economic  problems for  the  Member  States, particularly  since  Europe's dependence on 
energy imports is due to rise from the current figure of 50% to about 75% in 2015. 

•  At the  present  time,  the  Asian  market  for  energy  equipment  already  represents  50% of  the  world 
market  and  it  is still  growing.  The  European  market  is virtually  saturated,  with  estimated  growth 
rates of  between  1% and 2% per year over the  next  15 years.  For energy  operators  and  European 
industrial  companies, which  employ  more than  two  million  people  and  already  have  some  surplus 
capacity  in terms of both staffing  levels and production  facilities, greater penetration  into the Asian 
market  through  exports  and  investment  is essential  if they  are  to  maintain  or  develop  their  world 

position and safeguard  their jobs or possibly create new ones.  The markets for generation  equipment 
in other  regions  (especially  Latin  America,  Middle  East,  Maghreb,  Eastern  Europe  and  Africa)  do 
not have the same potential as the Asian markets. 

•  Finally,  the  rising  demand  for  energy  in  rapidly  developing  Asian  countries  which  use  coal 
constitutes an increasing threat to the regional and global environment.  Agreements reached  by the 
Community, the Member States and others at the UN Conference on Environment and Development, 
particularly  regarding  climate  change, will  have  little  practical  result  unless.the  negative  effect  of 
increased coal use is taken  into account. 

2. 

EXISTING ENERGY CO-OPERATION  FRAMEWORKS 

Many countries" are engaged  in co-operation  activities  in the Asian  energy  sector,  both  at  bilateral  and 
multilateral  level. There follows below a brief summary of the programmes of the European  Community 
and  the  Member  States,  and  also  the  guidelines  which  have  been  laid  down  by  certain  donors  and 
lending.agencies : the World Bank, the Asian Development Bank and the Global  Environmental  Fund. 

2.1.  The European  Community 

Today the Community does not have any  instrument dealing specifically  with  energy co-operation  with 
Asia.  Nevertheless,  the  Community  has  signed,  with  numerous  Asian  countries,  so-called  third 
generation  co-operation  agreements, which  contain  provisions on energy  co-operation  and  has set  up a 
range of  instruments  which  can  be used  for  international  co-operation  activities  in the field of  energy. 
This is shown clearly in the summary table (Annex 4). 

With regard to energy co-operation, one might mention the following  programmes  : Council  Regulation 
443/92  on  Co-operation  with  Asian  and  Latin  American  countries  which  makes  it  possible  to  support 
projects  involving technical  assistance, training  and  the promotion  of technology  (in  Asia,  16 projects 
since  1987 in  14 countries, totalling 56 million ECU), the SYNERGY  programme which centres on co 
operation  in  the  area  of  energy  policy,  the  SAVE  programme,  which  relates  to  institutional  and 
regulatory  aspects  of  the  rational  use  of  energy,  and  the  ALTENER  programme  which  relates  to  the 
promotion  of  renewable  energy  sources  and  has  virtually  no  Asian  activities.  Within  the  fourth 
framework  programme  for  research  and  development,  the  JOULE/THERMIE  programme,  whose 
activities are mainly  situated  in Europe, aims to develop scientific  and technological co-operation  links 
with  third  countries, particularly  in the area of  renewable  energy  sources  and  energy  efficiency.  Also 
within  the  fourth  framework  programme,  the  International  Cooperation  Programme  for  Developing 
Countries (INCO-DC) includes support for policy research with a view to promoting clean and  efficient 
energy systems. 

The  European  Investment  Bank (ElB) which  has been  authorised  to operate  in  the  Asian  region  since 
1993, has already  been  able to grant  loans to the energy  sector  in  India,  Indonesia, Thailand,  Pakistan 
and  China,  amounting  to  a total  of  300 million  ECU.  It must  be noted  that  these  loans are  more and 
more directed  towards  financing  the  European  private  sector.  This  approach  conforms  to  subsidiarity 
with  other  multilateral  or  bilateral  lending  agencies,  and  with  the  commercial  banking  sector 
(particularly regarding guarantees). 

2.2.  The Member  States 

The  activities  of  the  Member  States  in  the  area  of  energy  co-operation  in  Asia  are  mainly  aimed  at 
promoting  generation  equipment  within  the context  of  major  energy  investment  projects.  It should  be 
noted  that  these  projects,  which  are  the  subject  of  growing  international  competition,  increasingly 

2  Besides Europe, examples are Japan, the United States, Canada and Australia. 

8 

require the direct financial  involvement of the suppliers, as well as local equipment  fabrication. 

It  has  been  found  that  the  Member  States  have  a  wide  range  of  tools  for  pre-financing  engineering 
studies, guaranteeing commercial  loans and setting up demonstrations  in order to secure good  positions 
for their companies  in these markets, and that their  intervention  in the energy sector does not often  take 
the form of grants.  There are essentially three sources of financing : 

•  Public  development  aid,  of which  the  proportion  allocated  to  energy  varies  from  one  country  to 
another,  but  is  usually  less  than  10%.  This  is  mainly  directed  towards  the  most  disadvantaged 
countries  and  population  groups,  and  mostly  involves  renewable  energy  sources  in  rural  areas  or 
training and  institutional  support  intended  to improve the efficiency  of the energy  sector.  In many 
countries this type of aid has been found to be gradually falling. 

•  Own resources of major  operators  in the European electrical and gas sector, which are prepared to 
make  sustainable  investments  in  Asia  within  the  framework  of  their  new  business  strategies, 
working together with  local  partners, in order to take up a position  in these  markets.  The amounts 
which  these businesses are prepared  to  invest  usually  range from  about  75 to  100 million  ECU per 
year. 

•  Loans  granted  by  the  European  banking  system,  which  is  already  present  and  active  in  Asia. 
However  the  setting  up  of  major  energy  projects  (more  than  500  million  ECU  per  project)  is 
becoming  a more delicate  issue at a time when  Asian  Governments  are  increasingly  reticent  about 
providing guarantees. 

2.3.  Other Donors and Lending Agencies 

•  The World Bank 

The  World  Bank  has  clearly  identified  the  electricity  sector  and  the  environmental  aspects  associated 
with  the  development  of  the  energy  sector  as  its  priorities  in  Asia. 
It  considers  that  the  level  of 
investment needed  in the energy sector in Asia is df the order of  100 billion dollars per year.  The World 
Bank, with commitments of between  1.5 and 2 billion dollars per year, concentrates on sectoral  policies 
and  promoting  the  involvement  of  private  investors  in  the  energy  sector. 
It  has  specific  financial 
structures  available  for  this  purpose,  such  as  the  International  Finance  Corporation  (IFC)  which  has 
recently granted two loans of 250 million US$ to electricity companies  in India and the Philippines, the 
Multilateral  Investment  Guarantee  Agency  (MIGA) and  the  Expanded  Co-financing  Operation  (ECO). 
The  sectoral  loans  usually  include  an  institutional  component,  reorganisation  in the energy  sector and 
environmental  impact studies, but in some Asian countries the very  liberal approach  of the World  Bank 
clashes  with  the Governments' own  positions.  The grants and  subsidised  loans which  are  managed  by 
the  IDA  represent  only  a  tiny  proportion  of  the  energy  portfolio,  and  only  countries  whose  GDP  per 
inhabitant is below a certain threshold can benefit from these. 

•  The Asian Development Bank (ADB) 

In  1994, the  ADB  redefined  its  policy  on  intervention  in  the  energy  sector,  which  now  focuses  on  6 
points : 

t> 

> 

structural  reforms  in  the  electricity  sector,  which  is  in  crisis  in  a  number  of  countries, 
especially with a view to expanding the role played by the private sector, 

energy efficiency,  both on the supply side (reduction of losses) and on the demand side through 
an  approach  involving  integrated  resource  planning  (IRP)  and  demand  side  management 
(DSM), 

9 

t> 

establishing energy pricing structures which are based on costs and market  factors, 

> 

> 

energy development in rural areas, particularly fuelwood,  solar and wind energy, 

regional energy co-operation, particularly for large hydro-electric projects, 

>  finally, 

the  environment,  with  the  development  of  "guidelines"  for  the  implementation  of 
energy  projects  and  the  promotion  of  clean  coal  power  stations  and  combined  cycle 
installations. 

•  The Global Environmental Fund (GEF) 

This fund,  which  is based on grants received  from  industrial  countries according  to a procedure  similar 
to  the  IDA,  makes  it  possible  to  finance  the  additional  costs  associated  with  protecting  the  global 
environment  in developing  countries,  in the areas of biodiversity,  international  waters, the ozone  layer 
and the reduction  of greenhouse gases.  The GEF has just  been reorganised,  with  a budget of about  1.5 
billion  ECU for three years.  It is jointly administered by the World  Bank, for  investment  projects,  the 
UNDP for technical assistance projects and the UNEP for research programmes.  Through  its greenhouse 
gas  reduction  department,  the  GEF  can  finance  projects  in  the  energy  sector  whose  aims  include 
reducing  the  environmental  impact  of  certain  coal-fired  thermal  power  stations,  or  promoting  gas 
turbines and renewable energy sources. 

10 

PartlI. 

SiRAÉÉG* 

3. 

A NEW STRATEGY FOR ENERGY CO-OPERATION WITH ASIA 

An  analysis  of  the  energy  situation  in  most  Asian  countries  and  the  existing  energy  co-operation 
frameworks  shows clearly  that  the  European  Community  can  and  should  play  a much  more  important 
part.  It  is therefore  proposed  that  a  specific  strategy  should  be  defined  for  energy  co-operation  with 
Asia, according to the following guidelines : 

3.1.  Three  objectives 

The three main objectives of the Community energy co-operation are : 

>  To strengthen the security of supply in Asia and in Europe, 
>  To participate in Asian energy markets, 
>  To protect the global environment. 

3.2.  The Community  framework 

These main  objectives fit naturally within the framework  of more general  strategic objectives  which are 
already  being  set  by  the  European  Community.  On  the  subject  of  energy  and  the  Asian  region,  the 
framework  is defined  on the basis of the following factors : 

• The "new strategy towards Asia"3, which takes into account Europe's strategic interests in this region 
and the current requirements of its Asian  partners, particularly with a view to strengthening the Union's 
economic  presence  in  Asia,  contributing  towards  stability  in  Asia  and  encouraging  economic 
development  in the least prosperous countries and regions of Asia. 

•  The White Paper  "An Energy Policy  for the E.U."4  which  shows very clearly  that  it  is absolutely 
essential  for  Europe to co-operate with Asia to ensure a secure energy supply, to contribute towards the 
considerable  energy  investments  which  are  anticipated  in  Asia,  and  finally  to  protect  the  global 
environment. 

•  Directives  and  priorities  adopted  by the  Council,  such  as Regulation  no. 443/92  on  financial  and 
technical  aid  and  economic  co-operation  with  the  countries  of  Asia  and  Latin  America,  the  fourth 
framework  programme for research and development5 (particularly the JOULE-THERMIE Programme), 
and  also  the  proposed  regulation  on  a  programme  of  co-operation  with  third  countries  in  the  area  of 
energy policy (SYNERGY Programme6). 

3.3.  A global intervention 

In order to achieve these long-term objectives, Community activities should address equally both energy 
supply and demand, in two main areas : the optimum utilisation  of local energy resources, which  means 

3 COM (94)314 
4 COM (95) 682 
5 Decision n° 110/94/EC of 26 April 1994 
6 COM (95)  197 

11 

finding  substitutes  for  imported  energy  sources  while  also  improving  the  efficiency  of  existing 
production  units, and  the  management  of energy  consumption,  both  now  and  in the  future,  which  will 
make it possible to reduce the pressure on natural, environmental and financial  resources. 

3.4.  A specific approach 

The European Community  is different  from  many other donors and  lending agencies as its interventions 
mainly  consist  of  grants  (with  the exception  of  the  loans  granted  by  the  EIB  recently).  This  situation 
allows the European Community to offer  a unique advantage towards Asian countries who often  hesitate 
to  use  loan-financing  for  feasibility  studies,  research  and  development  or  technical  assistance.  The 
Community  can  also  place  its  co-operation  activities  within  a  long-term  perspective  and  safeguard 
collectivity  interests as regards the global environment. 

Neutrality and diversity in technical, institutional and financial  experience covering the energy sectors of 
the Member States represent other assets.  These are being recognised by the Asian partners. 
The  Community  can  therefore  act  as  a  "catalyst"  to  encourage  the  best  skills  in  Europe  to  meet  the 
expectations  of  its partners, while facilitating  the activities of  its Member  States and  their operators  in 
Asia.  In this context, the European Investment Bank would normally support downstream activities. 

With this aim in mind, the approach of Community co-operation will include the following elements : 

• 

establishing an ongoing dialogue on energy policy between the Community and Asian countries on 
a  bilateral  basis  or  through  competent  international  or  regional  organisations.  This  is  needed 
because of the global consequences of choices which are made in the Asian energy sector, 

mobilising  the Asian  and  European private  sector  is absolutely  necessary  because  of  the  major 
capital requirements and because of the need to find a more efficient  way of running the sector, 

taking account of social and environmental aspects, particularly the needs of poor urban and rural 
populations.  Cooperation  with Asia in the field of energy should be sensitive to the need to achieve 
an equilibrium between environmental, social and economic developmental  factors. 

4. 

SELECTION CRITERIA FOR COMMUNITY ACTIVITIES IN THE AREA OF ENERGY 
CO-OPERATION 

Energy co-operation activities will be selected according to a number of criteria : 

4.1.  Mutual interest and partnership 

The identification  of a mutual  interest between Asia and Europe will be the starting point to justify  each 
new project, and this will be expressed in terms of benefits for both partners in the short, medium or long 
term.  What  is more, the concept of partnership  implies that  resources will  be  made available  by both 
sides in the interests of the project.  This principle is well accepted from  the Asian point of view, as has 
been seen from  recent energy co-operation projects. 

4.2.  Subsidiarity with regard to the activities of Member States 

The Community  must be particularly  vigilant  in order to avoid  any duplication  with  bilateral  activities 
undertaken  by  Member  States. The  Community  should  also  concentrate  its  efforts  on  projects  which 
clearly have a real European  "added value" compared With the bilateral  projects carried out by Member 
States. 

12 

In  particular,  the  Community  will  accord  special  preference  to  projects  requiring  the  diversity  of  the 
European  experience  or  concerning  sensitive  issues  wjhere  Asian  partners  expect  a  certain  neutrality 
regarding technological,  legal or institutional  options.  Similarly, the Community,  because of  its unique 
experience, is a privileged partner for Asian authorities in the area of regional energy integration. 

4.3.  Co-operation with other Multilateral agencies 

Regular consultations  with  other  Multilateral  agencies,.(notably  EIB, IEA, UNDP,  WB and  ADB) will 
make  it  possible  to  ensure  the  cohesion  and  complementarity  of  the  various  activities,  while  also 
enabling the various tools to be used to optimum advantage. 

4.4.  Durability 

Community  intervention  should  be  seen  as  a  catalyst  which  makes  it  possible  to  initiate  dialogue  or 
exchanges  between  Asian  and  European  players.  It  will  therefore  only  cover  a  limited  period.  The 
projects should be designed and implemented  in such a way that when the Community support comes to 
an end, the activities are taken  over  by the players involved (the State, public  bodies, energy  operators, 
financial  institutions or industries).  Some prudence will therefore  have to be exercised when  it comes to 
creating public or semi-public structures. 

5. 

PRIORITIES FOR CO-OPERATION IN THE ENERGY SECTOR 

5.1.  Priority areas 

Having  analysed  the  energy  situation  in  a  number  of  Asian  countries,(see  Chapter  I)  and  taking  into 
account  the objectives  and  specific  approach  of Community  activities,  five  priority  sectors  have  been 
identified  covering both energy supply and demand : 

• 

Modernising the electricity sector 

The  electricity  sector  alone  represents  almost  80%  of  all  energy  investments  in  Asia  each  year, 
amounting  to more than  ECU 40 billion  per year.  This sector  is undergoing  major  technical,  financial 
and  institutional  changes,  and  it  provides  tremendous  scope  for  Community  co-operation,  taking  into 
account the diversity of the organisational structures of Member States. 

More  specifically  one  might  mention  the  development  of  energy  policies  and  the  adaptation  of  the 
institutional  frameworks  which determine how new financing schemes are  implemented; the  promotion 
of "clean and efficient"  technologies for the generation and use of electricity; and also the modernisation' 
of electricity distribution companies. 

• 

Promoting natural gas 

This sector, which  is not yet very well-developed, will become increasingly important as Asian countries 
want to  increase their  local  supply  in order to reduce their dependence  on the outside world  for  energy 
and  begin  to take environmental  aspects  into account.  In particular, very  significant  developments are 
expected  to  take  place  in  China,  India,  Bangladesh,  Indonesia  and  the  Philippines.  Natural  gas  is a 
priority  sector  for  most  countries  and  the Asian  Development  Bank estimates  that  it  could  grow  at an 
average annual rate of more than  10% in the region. 

• 

Introducing "clean coal" technologies 

Coal,  which  is  used  on  a  massive  scale  in  some  countries  such  as  China  and  India,  is  also  being 
developed  in  other  countries  such  as  Indonesia  which  have  large  reserves.  Coal  already  accounts  for 

13 

some 30% of all the energy consumed  in Asia.  Electricity generation  using coal  will  continue  to grow 
very  rapidly  (60%  of  the  additional  installed  capacity  in  China),  which  will  have  important 
environmental consequences at local and worldwide level. 

• 

Rational use of energy (energy  efficiency) 

The Community will devote special attention to the five sub-sectors set out below : 

>  Reducing losses in the generation process given that considerable savings can be made by the 

major energy operators. 

>  The rational  use of energy in industry, which is the largest consumer of commercial  energy in 
many Asian countries.  Although the rapid modernisation  will certainly  lead to  improvements 
in the way energy  is used  in industry, there is still considerable scope for  savings and  actions 
in this area will have a strong impact on the environment  in the regions in question. 

>  The  rational  use of energy  in transport,  particularly  road  transport.  In  most  Asian  countries 
more  than  half  of  all  oil  products  (60%  or  more)  are  consumed  by  this  sector,  which  is 
growing rapidly and contributing to serious environmental  problems e.g. global  warming and 
pollution.  In the  long term, the solutions to these problems depend  on  policies which  go  far 
beyond  the  question  of  energy  to  include  transport  policy,  land  management  and  transport 
infrastructures  and investment policies, particularly those related to public transport. 

>  The rational  use of energy  in the residential  tertiary  sector.  As  standards  of  living  improve, 
energy  consumption  in  the  urban  areas  of  Asia  is  growing  rapidly,  particularly  with  the 
introduction of air conditioning.  Particular attention  should be paid to cost effective  solutions 
for low energy buildings. 

>  Development  and  rational  use  of  communication  infrastructure  to  reduce  the  need  for 
transport  of  goods  and  persons,  to  optimise  energy  distribution  as  well  as  to  allow  for 
environment degradation monitoring. 

• 

Supplying energy to rural areas by an increased use of new/renewable energies 

It  is  estimated  that  one  billion  people  in  Asia  live  in  rural  or  urban  peripheral  areas  which  arc 
inadequately  supplied  with  basic  energy  services,  such  as  modern  combustion  fuels  and  stoves  (for 
cooking and heating), lighting, small-scale audio-visual equipment and other small machines. 

Taking into account the scale of the problem, Community financing for equipment can only be marginal. 
On the other hand, the Community  will  be in a position to promote the positive  experiences  gained  by 
European  players  within  the  framework  of  many  bilateral  and  multilateral  projects. 
In  particular, 
renewable  energy  sources  (which  are not often  financially  and  economically  viable, except  under very 
specific  geographical, technological  and economic circumstances) have two essential  positive  aspects : 
they  do  not  impose  a  burden  on  the  environment  and  they  require  considerable  involvement  of  rural 
users, which gives rise to "development" activity in rural areas. 

The Community will therefore take steps to promote these energy solutions when they are economically 
justified  by integrating them  into its numerous rural development programmes.  These technologies will 
be popularised  more effectively  by those responsible for rural development, health  or education  than by 
energy  organisations  or electricity  companies, for  whom  rural  energy  supply  is often  only  a  secondary 
priority. 

Generally  speaking,  the  Asian  agriculture  sector  consumes  very  little  "commercial  energy".  There  is 
nevertheless,  room  for  improvement  in  the  water-pumping  process,  transport,  storage  and  product 
treatment.  Utilising  agro-waste  or  urban  waste  as  an  energy  source  for  agro-industries  also  offers 
interesting  possibilities  for  energy  co-operation  at  Community  level,  as  a  current  Euro-ASEAN  co 
operation programme illustrates. 

5.2.  The other sectors 
Other  sectors  for  intervention  are  possible  but  would  appear  to  have  a  lower  priority  for  Community 

14 

action  although  this  does  not  mean  they  might  not  be  important  in  a  more  restricted  geographical 
context. 

• Nuclear energy 

Nuclear  energy  is already  used  for electricity  generation  in several  countries  in Asia.  Some  countries 
are  making  preparations  to use this option,  with  the  support  of  Western  companies,  while  others  have 
recently  given  it up. As in other parts of the world, the recourse to nuclear  energy  is the subject  of an 
intense and complex debate. 

However, the Asian region  is expected to provide the main area of nuclear energy expansion  worldwide, 
over  the  next  decades.  Accordingly,  a priority  of the  European  Community  in  relation  to the  nuclear 
programmes  under  development  in  Asian  countries  would  be  to  support  and  consolidate  activities 
conducted at international  level to ensure a peaceful  and safe use of nuclear energy. 

•  Oil and oil products 

On the  whole the  development  of oil resources  is being well  managed  by the  Asian  countries  who are 
already receiving a great deal of technical assistance from  international oil companies. 

•  Hydropower 

The region  still  has very considerable  hydropower  potential  and  major  programmes  are  planned  or are 
being  carried  out.  The  implementation  of  these  giant  projects  poses  major  environmental  problems, 
which  are  currently  being  systematically  examined  by  the  providers  of  the  capital  involved.  The 
Community may be able to intervene in these major projects  in order to consider aspects which  facilitate 
regional  energy  integration.  On  a  different  scale,  the  Community  will  continue  to  encourage  the 
development of small hydropower plants within the framework  of its rural development projects. 

6. 

IMPLEMENTATION 

6.1 

Creating dialogue 

This  new  cooperation  strategy  in the field of  energy  must  fit  into the  more  general  framework  of  the 
cooperation  established  between the Community and  its Asian  partners.  The Community  will  therefore 
make efforts,  either on a bilateral  basis or through  competent  international  or regional  organisations, to 
establish  an  ongoing  dialogue  with  Asian  authorities  on  aspects  of  energy  policy  which  are  of  mutual 
interest,  particularly  in the field  of planning, optimum  use of resources,  new technologies  or  financing 
schemes. The dialogue thus established  will  permit the definition  of priorities  by sector  and  by type of 
Community  intervention  in the different  countries or regions concerned. 

6.2 

Targeting actions 

The  sustainable  development  of  the  energy  sector  in  Asia  requires  increasing  involvement  from  the 
private  sector,  at  both  the  local  and  international  level  (particularly  Europe).  Three  conditions  have 
however to be fulfilled  in order for this to take place : 

> 
t> 
> 

the awareness of tried and tested solutions, 
the existence of a framework  to promote exchanges and investments, 
the mobilisation of motivated and confident  investors and operators. 

Depending  on  the  sectoral  priorities  selected  within  the  framework  of  the  established  dialogue  and 
according to specific geographical factors, the Community will intervene at the most appropriate level to 
best fulfill  these conditions.  Three levels of intervention are therefore  proposed, reflecting  a progressive 

15 

commitment of the resources available to the Community, as is illustrated  by the activities set out below 

6.2.1 Increasing  awareness 

In response to requests from  numerous decision makers  in government  bodies and energy companies in 
Asia,  awareness  actions  will  provide  more  information  about  the  technical  or  organisational  solutions 
being used  in Europe.  The Community could thus organise short-term  visits or information  seminars in 
both  Europe and  Asia, on various themes such as policy and regulatory  frameworks,  planning methods, 
institutional  structures, energy operators  and clean  technologies.  In the area  of energy  management  in 
urban  transport,  for  example,  the  Community  could  initiate  exchanges  of  experience  with  European 
cities  which  have  successfully  run  campaigns  in  this  area,  particularly  insofar  as  it  relates  to  energy-
efficient  public  transport  systems.  In  respect  of  energy  utilisation  in  industry,  the  Community  could 
improve the information  and awareness capabilities of the major  industrial consumers. 

6.2.2 Adapting institutional  frameworks 

The mobilisation of national or international private capital and the development of economic exchanges 
in  the  energy  sector  cannot  take  place  unless  there  is an  appropriate  energy  policy,  which  includes  a 
suitable  legislative  and  regulatory  framework,  clearly  defines  the  rules  of  the  game  between  energy 
operators  and  States,  and  provides  the  necessary  guarantees  to  investors  and  commercial  partners. 
Similarly,  the  implementation  of  rational  use  of  energy  programmes  often  requires  organisational 
adjustment  of  the  pricing  structure  for  the  different  energy  types,  alteration  of  building  construction 
codes and standards, and changes in industrial standards. 

The  Community  will  help  with  the  formulation  of  policies  or  adaptation  of  institutional  frameworks, 
depending  on  specificities  and  the  national  priorities  of  the countries  concerned,  by  making  expertise 
available, supporting human resources development and master plans or strategic studies, particularly at 
regional  level  (network  integration  and  energy  exchanges  actually  increase  the  overall  efficiency  of 
national  systems  : through  management  of  staggered  peak  consumption  times,  higher  reserve  margins 
etc. which help to improve the stability of markets and protect the environment). 

In particular, the Community  can  support training scholarships  in Europe or  long-term  missions which 
take  professionals  to  Asia,  on  themes  such  as  programme  contracts  between  the  State  and  energy 
companies,  innovative  financial  schemes  ("Build  Operate  Transfer,  Build  Operate  Own,Third  Party 
Financing),  or  technical,  economic  or  legal  aspects  relating  to  the  integration  of  electrical  or  gas 
networks. 

A desired  Community  intervention  : the need for support activities of this kind 
was  clearly  expressed  in  a  survey  conducted  among  150 representatives  of the 
Member  States, including public administrations,  banks and financial  institutions, 
energy companies and industries.  European  investors are actually  put off  by the 
"blur" of institutional and legislative contexts in many Asian countries, and consider 
that co-ordinated Community action, perhaps linked with commercial negotiations, 
would help to clarify these legislative and regulatory frameworks. 

On these questions of adapting  institutional  frameworks,  synergy will  be sought  with other multilateral 
agencies, especially the World Bank. 

6.2.3 Supporting European energy companies and operators 

In some sectors, making Asian players aware of European solutions and the existence of an  institutional 
framework  which  is well-suited  to economic exchanges  may  not be enough  to set these exchanges  off 
spontaneously.  The  Community  may therefore  intervene  through  direct  involvement  with  companies, 
16 

working in different  ways depending on the market. 

>  As regards the traditional  activities of providing equipment or direct  involvement  in major  projects, 
the tools used by the Member States and the resources which are available to large companies  have 
generally  been  found  to  be  adequate.  However,  the  Community  can  help  to  find  openings  for 
European operators in these extremely competitive markets, for example by encouraging "twinning" 
between  energy  operators  in  Europe  and  Asia,  or  by  supporting  exchanges  of  personnel  for  short 
periods.  It should  be noted that the success of these operators or European  investors  is all the more 
important since it allows equipment markets to be opened  up to hundreds of European  businesses of 
all sizes which work as sub-contractors for these "leaders". 

>  With  regard  to the  newer  sectors  (often  covered  by  SMEs), the  Community  will  help  to  publicise 
tried  and  tested  European  technologies,  promote  their  results  and,  if necessary,  produce  the  initial 
references,  in order to overcome the market's natural reticence when faced  with  innovative solutions. 
In the  interests of both  Asian  partners and  European  enterprises, the Community can  also  facilitate 
and speed  up access to these new markets for such companies, particularly  by initiating or assisting 
in the formation  of business consortia.  These "niches" which are new  in Asia but mature  in Europe 
might  include  the  following:  Demand-Side  Management  (DSM), particularly  in  specific  industrial 
sectors  such  as the cement  industry,  textiles, chemical  industries, metallurgy,  agro-industries, etc.; 
independent  power  production  (IPP); telecommunication  systems;  Rational  Use of  Energy;  "clean" 
electricity  generation  technologies  (coal-fired  power stations with  a fluidized  bed, smoke  treatment 
plants, co-generation  plants using natural gas or biomass, and energy recovery systems). 

>  Promotion  efforts  should  therefore  be  undertaken  so  that  companies  are  encouraged  to  use  the 
existing  tools  for  support  financing,  in  particular  the  ECIP  facilities  and  also  loans  from  the 
European  Investment Bank. Depending on the actual needs, the Community  could  also develop new 
modalities to support SMEs. 

6.3.  Allocating sufficient  resources to meet the challenges 

Asian countries need to mobilise yearly about $  100 billion  for energy  investments  in the form  of  loans 
or participating interests, both from  the public sector and also from  the national and international  private 
sector. To meet such challenges - and building on existing Community resources within current  budgets 
and  instruments  -  the  Community  could  significantly  increase,  in  the  next  five  years,  the  amount  of 
grants  available  for  Euro-Asian  energy  co-operation  (currently,  5-10  million  ECU  per  year).  These 
Community  funds  would  of  course  be  supplemented  by  an  appropriate  contribution  from  Asian  and 
European partners. 

17 

CONCLUSION 

The expanded  outlook  for  the energy  sector  in Asia during the  next  years  represents  for  the  European 
Community a tremendous challenge, from either an economic, social or environmental  viewpoint. 

Thanks to its "plus points", often  recognised  by the Asian partners, the Community can contribute more 
than  significantly  to meeting the energy and environment challenges by supplementing  both the actions 
undertaken  by its Member States and the initiatives of international financial institutions. 

Equally the European  Community can contribute to an increase  in the European  economic and  business 
presence  in  these  fast  growing  energy  markets,  which  are  vital  for  hundreds  of  thousands  of jobs  in 
Europe where the markets are almost saturated. 

The current Community actions, while extremely useful,  are highly specialised  and  need to be  focussed 
within  an overall  strategy  for  Euro-Asian  energy co-operation.  Accordingly,  such  a strategy  should  be 
agreed  and  implemented  with  sufficient  resources and means, within  existing  instruments  and  budgets, 
to make it credible and  efficient. 

Taking  all  the  above  into  account  the  Council  and  the  Parliament  are  invited  to  adopt  the  approach 
outlined in this document so it can be used as a basis for Europe-Asia energy co-operation. 

18 

A N N EX  1  : S O C I O - E C O N O M IC  D A TA  F OR  A S I AN  C O U N T R I ES 

COUNTRY 

Population 
(millions) 
1994 

Area 
(1000 km2) 

GNP 
per capita 
inUSS-  1994 

GNP 
in billion US$ 
1994 

Urbanisation 
rate 
in %-1992 

BANGLADESH 

BHUTAN 

CAMBODIA 

CHINA 

INDIA 

INDONESIA 

LAOS 

MALAYSIA 

MYANMAR 

NEPAL 

PAKISTAN 

PHILIPPINES 

SINGAPORE 

SRI  LANKA 

THAILAND 

VIETNAM 

118 

0.7 

10 

1.191 

914 

190 

5 

19 

46 

21 

126 

66 

3 

18 

59 

72 

144 

47 

181 

9.561 

3.288 

1.905 

237 

330 

677 

141 

796 

300 

1 

66 

513 

330 

230 

400 

200a 

530 

310 

880 

320 

3.520 

725 

200 

440 

960 

23.360 

640 

2.210 

190 

26,6 

0,3 

2,0b 

630,2 

278,7 

167,6 

1,5 

68.7 

37,8 c 

4,1 

55,6 

63,3 

65,8 

11,6 

129,9 

13,8 

TOTAL 

2.858,7 

18.517 

545 

1.557,20 

18 

6 

20 

27 

26 

32 

20 

45 

25 

12 

33 

44 

100 

22 

23 

25 

27 

Average 
annual 
growth 
rate 
in energy 
production 

Average 
annual 
growth 
rate 
in energy 
consumption 
1980-1992 

Energy 
consumption 
per capita 
in kg of oil 
equivalent 
1993 

Installed 
electric 
power 
capacity 
i n MW 
1992 

Household 
supplied 
with 
electricity 
%in  1984 

Electricity 
losses as 
%  of total 
generated 
in 1990 

14 

2 

5 

7 

4 

-1 

13 

- 1 

15 

7 

6 

8 

28 

59 

33 

52 

632 

243 

330 

39 

2.392 

59 

137.890 

74.000 

9.256 

23 

54 

14 

1.545 

5.280 

64 

39 

22 

226 

328 

5.563 

110 

673 

77 

808 

8.854 

6.174 

627 

15 

9.650 

2.771 

30 

31 

46 

98 

18 

43 

5 

7 

7 

3 

10 

- 1 

8 

7 

3 

7 

1 

10 

15 

19 

21 

17 

16 

36 

27 

24 

19 

11 

Sources  : The World  Bank  Atlas, 1996; World  Development Report  1994  : Infrastructure  for development, The  World  Bank. 

M992 
b  1992 
«1992 

ANNEX 2 

Evolution of the world's primary energy consumption 

12000 

10000 

8000 

o  S000 

4000 

O 
CM 

1985 

1990 

1995 

Year 

2000 

2005 

Source : European Commission, DG XVII, (Energy) 

ANNEX 3 

Actual  /  projected  C 02  emissions  for  the  period  1990 
2020 

10000 

8000 

i 

6000 

4000 

2000 

CM 
O 
o 
c 
o 

c 
o 

0 
1990 

Asia 

Year 

2020 

Source: World Energy Council,  1994 : "Energy for tomorrow's world'. 

ANNEX 4  ;  INSTRUMENTS  OF INTERNATIONAL  CO-OPERATION  IN THE ENERGY  SECTOR 

PROGRAMME 

TYPE OF PROJECTS  BEING 
FINANCED 

GEOGRAPHICAL  AREA 
COVERED 

Fourth  framework  programme for 
research co-operation with  third 
countries 
PHARE 

TACIS 

EURATOM 

ECSC 
EBRD 

Technological research and development, 
including demonstrations 

All third countries 

Technical assistance and co-financing of 
investments 
Technical assistance 

CEEC 

CIS 

Investments to improve the security and 
reliability of nuclear power stations 
Investments in the coal and steel sectors 
Investments in all sectors, including energy 

CEEC 
+ ex URSS 
CEEC 
CEEC + CIS 

Mediterranean 

the 

countries 

in  Africa, 

70 
Caribbean and the Pacific 
CEEC 
Asian and Lat. American countries 
Asia and Latin America 

Mediterranean  Renewal  Project 

Lomé Convention 

EIB 

Co-operation  with Asia and Latin 
America 

ECIP 

JOULE-THERMIE 

Synergy 
SAVE 

ALTENER 

* Protocols for each country 
* Regional co-operation 
Investments, training and technical assistance 
for  all sectors, including energy 
Investments in all sectors, including energy 
Investments in all sectors, including energy 
Investments in equipment, training and 
technical assistance for all sectors including 
energy 
Co-financing through joint ventures of all 
sectors, including energy 

Technological research and development 
including demonstration : non-nuclear energy 
Energy policy and strategy 
Rational use of energy : promotion, regulatory 
activities, information and exchanges 
Renewable energy sources : promotion, 
regulatory activities, information and 
exchanges 

Note  :  unless otherwise indicated, the amounts shown relate to the entire duration of the  programmes 
**** :  Total amount including EC 

DURATION OF THE 

PROGRAMME 

TYPE OF AID 

BUDGET 

1994-1998 

(in  MECUS) 
540 in total 

annual 

annual 

1994-1998 

since 1990 
unlimited 

1992-1996 

1992-1995 

1994-1996 
1993-1995 
1991-1995 

1,000  in  1994 
including 58 energy 
510 in 1992, 
including  130 energy 
1,000 

200 
10,000 

2,940 
2,075 
12,000 

3,000 
750 
2,750 

subsidies 

subsidies 

subsidies 

loans 

loans 
3  % participation  in the  capital 
of the EBRD 
donations and EIB loans (2,062) 
donations and EIB loans (1,800) 
subsidies and EIB loans (1,200) 

loans 
loans 
subsidy 

interest-free  loans 
subsidies which are repayable 
in the event of success 
cost-sharings 

AU developing countries 

annual 

40 + banking  funds 

Community + third countries 

1994-1998 

1,002  **** 

All third countries 
Community + third countries 

annual 
1991-1995 

8 in 1994 
35**** 

Community + third countries 

1993-1997 

50**** 

subsidies 
subsidies 

subsidies 

ISSN 0254-1475 

COM(96) 308  final 

DOCUMENTS 

EN 

11  12 

Catalogue number  :  CB-CO-96-317-EN-C 

ISBN 92-78-05864-5 

Office for Official Publications of the European Communities 

L-2985 Luxembourg 

£3