The region has made significant strides in the establishment of regional infrastructure in the electricity sub-sector, as evidenced by the interconnection of nine of SADC Member States to the regional power pool, the Southern African Power Pool (SAPP). The interconnection of these Member States has optimised power system production and trade. What is now clearly urgent in the Regional Energy Sector Programme is the connection of the remaining three mainland Member States, Angola, Malawi and Tanzania, to the SAPP. The RIDMP has revealed that, notwithstanding the current interconnectivity achievements, the SADC region still faces a number of challenges with regard to energy delivery, access and price. The Study’s interesting indicators reveal that: • Some of the SADC countries have less than 5% rural access to electricity; • Comparatively, the SADC region lags behind its sister Regional Economic Communities (RECs) in respect of overall access to electricity. 24% of SADC residents have access to electricity compared to 36% in the Eastern Africa Power Pool (EAPP) and 44% in Western Africa Power Pool (WAPP); • The SADC region has been facing an electricity deficit since 2007 and the expectations are that the identified gap will be met by 2014. However, indications are that the implementation of projects can lag behind their planned dates due to a lack of funding; • Low tariffs, poor project preparation, no off-takers that can sign Power Purchase Agreements (PPAs) under single buyer models and a lack of required policy/regulatory frameworks are hampering investment and financing; • To date, coal has been the backbone of power generation in the region (contributing 75%), yet is considered an unclean fuel under the global warming debate; • The petroleum and gas sub-sector is plagued by volatile prices. Although the region is endowed with petroleum and gas resources, a lot of it is not available due to foreign commitments or inadequate infrastructure; and • Large, estimated renewable energy (RE) potential needs infrastructure for grid connection, manufacturing and quality testing, and although the prices are coming down, RE needs innovative financing. ENERGY The Energy Sector Plan (ESP) is designed to address four key strategic objectives, namely ensuring energy security, improving access to modern energy services, tapping the abundant energy resources and achieving financial investment and environmental sustainability. Collectively, these factors contribute to the SADC energy goal of achieving adequate, reliable, lowest cost, environmentally sustainable energy services for economic growth and poverty eradication. Identified ‘hard’ infrastructure projects include the planned electricity generation and transmission projects; refineries, storage facilities and pipelines for the petroleum and gas; and transport facilities for coal distribution and exports. Most of the regional energy projects are already included in the electricity plan. In addition to the deficit in ‘hard’ infrastructure, there are also shortfalls in the ‘soft’ infrastructure such as a lack of coordinated planning, harmonised requisite policy and regulatory frameworks, institutional support, capacity, financing and investment. The Study identified 73 power generation projects to increase generation from the current 56 000 MW and surpass the projected demand of 96 000 MW by 2027. Three major interconnecting projects would facilitate the interconnection of Angola, Malawi and Tanzania to the SAPP. The estimated investment cost of all planned electricity generation projects is US$62 billion for the short term (2012 – 2017), US$39 billion for the medium term (2017 – 2022) and US$72 billion for the long term (2022 – 2027), totalling US$173 billion. Prioritised generation projects with capacity greater than 1000 MW were estimated in this study to cost between US$65 billion and US$104 billion, while those prioritised with a capacity of less than 1000 MW were estimated to cost between US$7 billion and US$18  billion. The total cost of the prioritised projects would range between US$42 billion and US$122 billion. In addition, the estimated cost for priority inter-connector and transmission projects is US$3 billion. 6 Executive Summary