CALUB ENERGY DEV. PROJECT

closed

The project will: (i) improve the present unbalanced structure of energy supply in Ethiopia by increasing the availability of modern fuels; (ii) support economic growth by expanding petroleum supply from indigenous resources; (iii) contribute to the mitigation of peri-urban deforestation by inducing the replacement of woodfuels with Liquified Petroleum Gas (LPG) and kerosene in urban households; (iv) develop the country's technical capacity to commercialize its fossil fuel resources; and (v) contribute to poverty alleviation through direct measures, induced economic activity and through the development of Ethiopia's remote south-eastern region. The project will also stimulate and facilitate private sector participation in the energy sector and enhance Ministry of Mines and Energy's (MME's) ability to promote petroleum exploration and development. The project has a significant "pilot" dimension and may be viewed as the starting point for a comprehensive, long-term development of the country's fossil-fuel resources. In order for the project to operate in an enabling regulatory environment, the Transitional Government of Ethiopia will implement and maintain a revised LPG pricing policy based on import parity, study ways to optimize current pricing policy for all petroleum products, and establish national LPG standards.