Japan's Official Development Assistance White Paper 2006

Main Text > Part II ODA DISBURSEMENTS IN FISCAL YEAR 2005 > Chapter 2 Details about Japan's ODA > Section 2. Measures for Each of the Priority Issues > 3. Addressing Global Issues > (5) Energy

(5) Energy

In order to realize economic development and improve living standards, developing countries need to ensure a stable energy supply. It is estimated that there are approximately 2.5 billion people in developing countries who do not have access to modern energy services. The lack of modern energy services is a constraint on the qualitative improvement of economic and social life through greater poverty due to the underdevelopment of industry accompanied by losing job opportunities, and lack of opportunities to receive medical services and education.

    It is forecasted that the world demand for energy will increase in the future, particularly in Asia and other developing countries. Without appropriate measures to ensure a stable supply of energy which incorporate appropriate environmental considerations, problems such as a tight supply-demand situation, energy price hikes, and increase in carbon dioxide emissions could become more prominent, which could in turn affect the sustainable development of developing countries, as well as the economy and environment of Japan and the rest of the world.

    As described above, energy issues have global dimensions such as poverty, sustainable development, and environmental problems.

    Japan, with a view to ensuring the sustainable development of developing countries and to securing energy for Japan itself, has been cooperating for stable energy supply in developing countries, taking into account the improved efficiency of energy use, promotion of energy conservation, and environmental conservation. Japan has been providing assistance through ODA for such projects that are hardly dealt with by the private sector or through OOF and that can contribute to improvements in energy efficiency, promotion of energy conservation, and promotion of the use of renewables. In addition, by selectively providing its assistance to countries which possess natural resources, Japan is putting its efforts into promoting resource development for the acquisition of foreign currencies and self-development, and is creating strong relations with these countries in the resource field.

    In FY2005 yen loans in the energy sector amounted to approximately ¥167.1 billion, and grant aid amounted to approximately ¥34.2 billion. Via technical cooperation Japan cooperated in the human resource development of 445 people through training and other means.

    Assistance in this sector through yen loans in FY2005 included Indonesia's Kamojang Geothermal Power Plant Extension Project (engineering services) and Egypt's Kuraymat Integrated Solar Combined Cycle Power Project. These projects had the objectives of ensuring a stable supply of energy and at the same time reducing the burden on the environment through the utilization of renewables such as geothermal and solar energy which produce relatively low carbon dioxide emissions. In addition, in October 2006 the Government of Japan conveyed to the Iraqi Government its intention to extend a yen loan for Iraq's Basrah Refinery Upgrading Project (engineering services). It is expected that this project will assist the development of Iraq as well as contribute to stronger bilateral relations of Japan and Iraq in the oil and gas sector (see page 131 for further details on Japan's Assistance for the Reconstruction of Iraq).

    Looking at grant aid, through the Project for the Improvement of the Honiara Power Supply in the Solomon Islands and the Project for the Upgrading of Electric Power Supply in Funafuti Atoll in Tuvalu, island countries with insufficient power supplies are provided with assistance. This assistance included the construction of new power generation facilities, the expansion of existing facilities, and the provision of power distribution facilities. Such efforts are expected to contribute to a stable supply of power and lead to a revitalization of socio-economic activity.

    As for technical cooperation, Japan has been carrying out technology transfers and human resources development in such fields as energy management, reduced energy loss, more efficient energy use, and renewables. For example, in Laos, with Japan's technical cooperation, technical standards for electric power were formulated and issued in 2004 in the form of a ministerial ordinance. Since 2005 Japan has been providing assistance for human resource development to implement this ministerial ordinance in actual administration and projects through the Assistance for Promotion of Lao Electric Power Technical Standard. Such efforts are expected to improve activities such as design, repair and maintenance, and management in the power sector and will also improve the safety of power generation facilities.

    Japan is making efforts to promote anti-poverty measures through the provision of modern energy services and to ensure a stable supply of electric power in order to develop industry in developing countries. At the same time it is also actively advancing environmentally-friendly cooperation in the energy sector. This includes the development of energy-related infrastructure such as power generation facilities that take advantage of reduced energy loss, more efficient energy use, and renewables.