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### Viewing cable 05DHAKA6292, SOUTH ASIA REGIONAL ENERGY MEETING, DHAKA,

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05DHAKA6292 | 2005-12-21 03:29 | 2011-08-24 01:00 | UNCLASSIFIED | Embassy Dhaka

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 04 DHAKA 006292

    SIPDIS

    AIDAC

    MISSIONS FOR ECON OFFICERS, POL OFFICERS AND USAID
    DIRECTORS
    SECSTATE WASHDC FOR USAID/ANE BUREAU/AA, JIM KUNDER AND
    MARK WARD; SAA/DIR, KAY FREEMAN, RICHARD STEELMAN, EBONY
    BOSTIC, MICHAEL METZLER, ERIC PICARD, NITIN MADHAV;
    SPO/DIR SUSAN FINE, REBECCA MAESTRI;  TS/DIR TONY CHAN,
    JOHN WILSON, CINDY LOWRY; EGAT/I&E/DIR JUAN BELT, GORDON
    WEYNAND, ELLEN DRAGOTTO; E&E/EG/EI ROBERT ICHORD;
    NSC/SA DIR CLAUDIO LILIENFELD; STATE/SA DAS JOHN
    GASTRIGHT, PDAS DON CAMP, DIR JOHN SCHLOSSER, ANISH GOEL;
    DEPT. OF ENERGY/INTERNATIONAL ENERGY COOPERATION/EUROPEAN
    AND ASIAN AFFAIRS DIR ROBERT PRICE, TOM CUTLER; AND DEPT.
    OF COMMERCE/INTERNATIONAL TRADE/PAUL HUEPER; WORLD BANK
    GROUP/USED MUNEERA SALEM-MURDOCK.
    BANGKOK PLEASE PASS TO RDMA DIR RICHARD WHELDEN

    E.O. 12958: N/A
    TAGS: ENRG US IN NP CE PK AF TH
    SUBJECT: SOUTH ASIA REGIONAL ENERGY MEETING, DHAKA,
    BANGLADESH, DECEMBER 6-7, 2005

    SUMMARY

    ¶1.   THE EIGHTH MEETING OF THE USAID SOUTH ASIA REGIONAL
    INITIATIVE FOR ENERGY (SARI/ENERGY) WAS HELD IN DHAKA,
    BANGLADESH ON DECEMBER 6-7, 2005. THE FOCUS OF THE MEETING
    WAS REGIONAL ENERGY SECURITY THROUGH TRADE, INVESTMENT AND
    ACCESS. THE MEETING WAS ATTENDED BY 115 PERSONS FROM THE
    PRIVATE AND PUBLIC SECTORS OF THE EIGHT COUNTRIES OF SOUTH
    ASIA, USAID SOUTH ASIA MISSIONS, USAID/ANE, USAID/E&E AND
    USAID/EGAT. PRESENTATIONS WERE MADE ON ENERGY SECURITY AND
    REGIONAL TRADE OPTIONS BY PRIVATE AND PUBLIC SECTOR LEADERS
    FROM THROUGHOUT THE REGION. SEVERAL SARI/E PROGRAM
    ANNOUNCEMENTS WERE MADE INCLUDING REDIRECTION OF THE
    PROGRAM TO ENERGY SECURITY IN SOUTH ASIA, THE IMPENDING
    LAUNCH OF A REGIONAL ENERGY MARKETS INITIATIVE, LAUNCH OF
    THE WIND AND SOLAR MAPPING OF AFGHANISTAN AND PAKISTAN, AND
    THE RELEASE OF THE REGIONAL ENERGY SECURITY REPORT. A USG
    ONLY MEETING WAS HELD AT WHICH THERE WAS A STRONG
    ENDORSEMENT FOR THE OUTCOMES OF THIS MEETING AND THE
    REDIRECTION OF SARI/E, A REQUEST FOR A FORMAL SARI/E
    ADVISORY BOARD MEETING AS PART OF A MISSION DIRECTORS
    MEETING, A REQUEST TO REVISIT THE PROPOSED BUDGET REDUCTION
    FOR SARI/E IN FY06. END SUMMARY

    OVERVIEW

    ¶2.   THE EIGHTH USAID SARI/ENERGY SEMI-ANNUAL REVIEW
    MEETING WAS HELD IN DHAKA, BANGLADESH ON DECEMBER 6-7,
    ¶2005. IN TOTAL 115 PARTICIPANTS ATTENDED OF WHICH 82 WERE
    HOST COUNTRY STAKEHOLDERS FROM AFGHANISTAN, BANGLADESH,
    BHUTAN, INDIA, MALDIVES, NEPAL, PAKISTAN AND SRI LANKA.
    OTHER ATTENDEES INCLUDED REPRESENTATIVES FROM USAID
    WASHINGTON AND FIELD MISSIONS, IMPLEMENTING CONTRACTORS
    AND GRANTEES.

    ¶3.   BEGUN IN 2000, THE USAID SARI/ENERGY PROGRAM FOCUSES
    ON REGIONAL APPROACHES TO MEET SOUTH ASIA'S ENERGY
    SECURITY NEEDS.  THE OBJECTIVE OF THE PROGRAM IS TO
    PROMOTE ENERGY SECURITY IN SOUTH ASIA, WORKING TOWARD
    HARMONIZED MARKETS FOR REGIONAL ENERGY TRADE AND
    INVESTMENT, AND INCREASE ACCESS TO DIVERSIFIED CLEAN
    ENERGY SUPPLY.

    ¶4. THE PRIMARY THEME OF THIS MEETING WAS REGIONAL ENERGY
    SECURITY THROUGH CROSS BORDER TRADE AND INVESTMENT.
    LEADING POWER COMPANIES AND KEY PUBLIC SECTOR
    REPRESENTATIVES FROM INDIA, BANGLADESH, BHUTAN OTHER
    SOUTH ASIAN COUNTRIES AS WELL AS CENTRAL ASIA, SAARC, AND
    ASEAN GAVE PRESENTATIONS ON THE NEEDS AND ISSUES FOR
    REGIONAL ENERGY SECURITY AND CROSS-BORDER TRADE AND
    INVESTMENT. A HIGHLY ENGAGED AND OPEN DIALOGUE ON OPTIONS
    FOR TRADE TOOK PLACE BETWEEN ALL PARTICIPANTS WITH ACTIVE
    QUESTIONING FROM THE NEPAL AND PAKISTANI DELEGATES. USG
    PARTNERS OBSERVED A NEW AND STRONG LEVEL OF ENTHUSIASM
    FOR ENERGY MARKETS AND TRADE BY THE REGIONAL
    PARTICIPANTS. IN ADDITION, THE PARTICIPANTS ENDORSED THE
    SARI/E PROGRAM STRATEGIC OBJECTIVE.

    ¶5. THE PARTICIPANTS EXPRESSED STRONGLY THAT SOUTH ASIA
    PROVIDES SIGNIFICANT OPPORTUNITIES FOR ENERGY INVESTMENT,
    DEVELOPMENT AND TRADE. THE INDIGENOUS RESOURCES ARE
    SIGNIFICANT AT APPROXIMATELY 47,000 MILLION TONS OF OIL
    EQUIVALENT (MTOE), OF WHICH SOME 800 MTOE IS ANNUALLY
    RENEWABLE.  YET ACCESS TO ENERGY IS AT LESS THAN 50% ON
    AVERAGE WITH AN ANNUAL TOTAL CONSUMPTION OF APPROXIMATELY
    600 MTOE. CRITICALLY, THE ENERGY RESOURCES ARE INEQUITABLY
    DISTRIBUTED AMONG THE COUNTRIES. THUS THE OPPORTUNITIES FOR
    COST-EFFECTIVE CROSS-BORDER TRADE AND INVESTMENT TO DEVELOP
    RESOURCES AND FOSTER ENERGY SECURITY IS IMMENSE, BUT AT
    PRESENT ONLY ABOUT 0.1 PERCENT OF TOTAL ENERGY IMPORTS ARE
    INTRA-REGIONAL. INDIA IS LEADING THE WAY WITH THE CREATION
    OF NATIONAL ENERGY MARKETS, AND WILL SERVE AS THE KEY
    REGIONAL MARKET. YET PROGRESS MUST BE MADE IN ORDER TO
    BRIDGE GAP BETWEEN MACRO-LEVEL INTENTIONS FOR ENERGY
    SECURITY, AND MICRO-LEVEL IMPLEMENTATION OF INTRA-REGIONAL
    TRADE AND INVESTMENT.

    ¶6. GOING FORWARD, USAID'S SARI/ENERGY PROGRAM WILL LAUNCH A
    REGIONAL ENERGY MARKETS INITIATIVE TO IDENTIFY AND ADDRESS
    KEY OBSTACLES TO FORMATION OF REGIONAL ENERGY MARKETS TO
    SUPPORT BILATERAL AND REGIONAL ENERGY TRADE AND INVESTMENT.
    SARI/ENERGY WILL LOOK TO SUPPORT SAARC ENERGY CENTER AND
    SOUTH ASIA ENERGY SECURITY INITIATIVES. THE PROGRAM WILL
    CONTINUE TO PROMOTE IMPROVED CLEAN ENERGY ACCESS, AND
    LEVERAGE SARI/ENERGY PROGRAM RESOURCES AND LESSONS LEARNED
    TO MEET US OBJECTIVES IN AFGHANISTAN AND PAKISTAN.
    PARTICULAR EMPHASIS WILL CONTINUE ON THE CENTRAL ASIA TO
    SOUTH ASIA ENERGY CONNECTION THROUGH AFGHANISTAN AND
    PAKISTAN.

    USAID SARI/ENERGY INITIATIVES FOR ENERGY SECURITY

    ¶7.   CONTRACTORS AND GRANTEES OF SARI/E INCLUDE NEXANT,
    INC., U.S. ENERGY ASSOCIATION, U.S. CHAMBER OF COMMERCE,
    WINROCK INTERNATIONAL, AND U.S. NATIONAL RENEWABLE ENERGY
    LABORATORY.  EACH OF THE SARI/E IMPLEMENTING PARTNERS
    PRESENTED THEIR ACCOMPLISHMENTS AND PROPOSED FOLLOW-ON
    ACTIVITIES.

    ¶8.   RECENT SARI/E RESULTS AND ONGOING ACTIVITIES TOWARD
    ACCOMPLISH THE US OBJECTIVES OF REGIONAL ENERGY SECURITY
    INCLUDE A NUMBER OF ACTIVITIES, THE FOLLOWING OF WHICH ARE
    EXAMPLES:

    ¶9. REGIONAL ENERGY SECURITY - SARI/ENERGY RELEASED ITS
    REGIONAL ENERGY SECURITY REPORT, AUTHORED BY LEADING SOUTH
    ASIAN EXPERTS.  THESE SARI/E CHAMPIONS PRESENTED THE
    FINDINGS OF THE REPORT AT THE FIRST MEETING OF SAARC ENERGY
    MINISTERS IN OCTOBER OF 2005. THE PRINCIPLES WERE ENDORSED
    BY THE SAARC ENERGY MINISTERS AND FORWARDED TO THE SAARC
    SUMMIT. THE SAARC DHAKA DECLARATION ALSO INCLUDED THE
    ESTABLISHMENT OF A SAARC REGIONAL ENERGY CENTER IN
    ISLAMABAD.

    ¶10. CROSS-BORDER TRADE AND INVESTMENT - SARI/ENERGY IS
    PROVIDING SUPPORT TO THE GOVERNMENT OF AFGHANISTAN, WORKING
    WITH USAID/KABUL, ON POWER IMPORT NEGOTIATIONS FROM
    NEIGHBORING CENTRAL ASIAN COUNTRIES. THE PROGRAM ALSO
    PROVIDED SUPPORT TO THE BANGLADESH-INDIA TATA GROUP CROSS-
    BORDER POWER SECTOR INVESTMENT CURRENTLY UNDER NEGOTIATION.
    SARI/E IS RAMPING UP SUPPORT ON THE JOINT VENTURE PROPOSAL
    BETWEEN NEPAL OIL CORPORATION AND THE INDIA OIL
    CORPORATION. RECENTLY, THE PROGRAM COMPLETED AN LNG IMPORT
    POLICY FRAMEWORK FOR PAKISTAN BASED ON REGIONAL
    EXPERIENCES. SARI/E ALSO WORKS TOWARD IMPROVED ENERGY
    REPORTING AND COVERAGE, WITH OVER 285 ARTICLES ON REGIONAL
    ENERGY COOPERATION AND DEVELOPMENT PUBLISHED IN LEADING
    NEWSPAPERS AND MAGAZINES.

    ¶11. CLEAN ENERGY ACCESS - SARI/ENERGY LAUNCHED THE WIND AND
    SOLAR RESOURCE MAPPING FOR AFGHANISTAN AND PAKISTAN. THIS
    HAD BEEN DONE PREVIOUSLY FOR SRI LANKA AND THE MALDIVES,
    WITH DEVELOPMENT OF A GEOSPATIAL TOOLKIT TO ANALYZE COST-
    EFFECTIVE SYSTEM OPTIONS FOR ANY SITE. THE DECISION SUPPORT
    TOOLS ARE NOW BEING ADAPTED FOR AFGHANISTAN AND PAKISTAN.
    THE SMALL GRANTS PROGRAM PROVIDED SUPPORT IN BANGLADESH
    THAT LED TO CONSTRUCTION OF 27 BIOGAS PLANTS. THE PROGRAM
    ALSO FACILITATED CREATION OF A RURAL ENERGY CENTER IN
    INDIA.

    ¶12. REGIONAL HARMONIZATION - THROUGH THE GRANTS PROGRAM A
    SET OF HARMONIZED STANDARDS FOR MICRO-HYDRO IN INDIA, NEPAL
    AND SRI LANKA HAS BEEN DEVELOPED. THE PARTNERSHIP PROGRAM
    RESULTED IN SHARING OF INDIA AND BANGLADESH TRANSMISSION
    GRID CODES WITH AFGHANISTAN AND PAKISTAN, ASSESSMENT OF
    RETAIL PRICING BETWEEN INDIA AND PAKISTAN, AND
    STRENGTHENING OF A POTENTIAL INDEPENDENT REGIONAL
    REGULATORY ASSOCIATION.

    ¶13. PRIVATE SECTOR VOICES FOR REGIONAL ENERGY TRADE AND
    INVESTMENT - THE SARI/E SPONSORED SOUTH ASIA REGIONAL
    ENERGY COALITION, COMPOSED OF REGIONAL BUSINESS LEADERS AND
    ASSOCIATION EXECUTIVES, BOARD OF DIRECTORS AGREED TO
    CONSTITUTE A MARKET POLICY FORUM IN EARLY 2006 TO IDENTIFY
    REGIONAL ENERGY MARKET DEVELOPMENT IMPEDIMENTS, AND TO
    DEVELOP AND INITIATE A POLICY ROAD MAP TO ADDRESS THESE
    IMPEDIMENTS.  THE REGIONAL BOARD ALSO AGREED TO INCREASE
    ITS AMERICAN COMPANY MEMBERSHIP IN ORDER TO BETTER
    REPRESENT THE NEEDS OF FOREIGN INVESTORS IN THE SOUTH ASIA
    ENERGY SECTOR.

    RECOMMENDATIONS OF REGIONAL WORKING GROUPS

    ¶14. DURING THE MEETING THREE WORKING GROUPS WERE
    ESTABLISHED TO IDENTIFY CRITICAL OPPORTUNITIES AND NEEDS
    IN EACH OF THE FOCAL AREAS OF ENERGY SECURITY. COMPRISED
    OF REGIONAL ENERGY SECTOR LEADERS AND SARI/ENERGY
    PARTNERS, THE GROUPS RECOMMENDED AND COMMITTED TO WORKING
    TOWARD THE FOLLOWING:

    ¶15. REGIONAL ENERGY SECURITY - SUPPORT THE NEW SAARC
    ENERGY CENTER IN PAKISTAN TO MAKE IT OPERATIONAL; DEVELOP
    A REGIONAL ENERGY MASTER PLAN WITH GUIDANCE FROM REGIONAL
    EXPERTS; PREPARE A CONCEPT PAPER FOCUSING ON A PROPOSED
    SOUTH ASIA INFRASTRUCTURE DEVELOPMENT FINANCIAL
    INSTITUTION. THERE WAS RECOGNITION THAT AT PRESENT SARI/E
    IS THE ONLY REGIONAL ENERGY PROGRAM IN SOUTH ASIA.

    ¶16. REGIONAL MARKETS FOR TRADE AND INVESTMENT - A
    WORKSHOP ON HOW SHORT- AND LONG-TERM ENERGY MARKETS CAN
    WORK IN SOUTH ASIA; WORK ADDRESSING THE ROLE OF INDIA IN
    INTEGRATING A REGIONAL GRID; EMPHASIZED NEED TO TAKE
    SMALL, REALISTIC INITIATIVES TO DEMONSTRATE CROSS-BORDER
    ENERGY TRADE; HOLD DISCUSSIONS HIGHLIGHTING CROSS-BORDER
    INVESTMENTS AND TRADES UNDERWAY; AND IDENTIFY STRATEGIC
    PUBLIC-PRIVATE PARTNERSHIP OPPORTUNITIES FOR ADDITIONAL
    CROSS-BORDER TRADES. THESE ARE AREAS IN WHICH THE
    SARI/ENERGY REGIONAL ENERGY MARKETS INITIATIVE WILL WORK.

    ¶17. INCREASED ACCESS TO CLEAN ENERGY SUPPLY - RECOGNITION
    OF NEED FOR TRAINING, CAPACITY BUILDING AND INFORMATION
    SHARING IN OFF-GRID AND GRID-BASED SOLUTIONS, INCLUDING
    LNG, CNG, WIND, SOLAR AND HYDROGEN; ENDORSED THE USE OF
    THE SARI/ENERGY RURAL ENERGY NETWORK AS A BASIS FOR
    PROMOTING CLEAN ENERGY ACCESS THROUGHOUT THE REGION.

    USG MEETING

    ¶18.  THE USG PARTNERS MEETING TOOK PLACE AT THE END OF
    THE FULL REGIONAL STAKEHOLDERS MEETING. THE MEETING WAS
    FOCUSED ON IMPLEMENTATION OF THE CHANGES SET FORTH IN THE
    SARI/E DECISION MEMO SIGNED BY ANE/AA IN SEPT 2005, WHICH
    REDIRECTED THE PROGRAM TOWARD REGIONAL ENERGY SECURITY
    AND ESTABLISHED A MISSION DIRECTOR LEVEL ADVISORY BOARD.

    ¶19. THE USG PARTICIPANTS, MANY OF WHO HAVE BEEN INVOLVED
    WITH SARI/E IN PAST YEARS, NOTED THE POSITIVE SHIFT THAT
    HAS OCCURRED IN THE PROGRAM. THEY NOTED THAT THE REGIONAL
    PARTICIPANTS DEMONSTRATED A GREAT DEGREE OF POSITIVE
    MOMENTUM AND DIRECT DISCUSSIONS ON HOW TO IMPLEMENT
    CROSS-BORDER TRADES.  INDIA WAS REPRESENTED IN STRENGTH
    AND LED THE DISCUSSIONS ON TRADE AND INVESTMENT
    OPPORTUNITIES WITH THEIR NEIGHBORS IN THE REGION. THERE
    WAS A POSITIVE RECIPROCAL RESPONSE AMONG THE SOUTH ASIAN
    COUNTRIES, PARTICULARLY PAKISTAN AND NEPAL. THE
    PARTICIPANTS FROM THROUGHOUT THE REGION DEMONSTRATED A
    HIGH LEVEL OF PERSONAL COMMITMENT AND SHARED A SENSE OF
    MOMENTUM TOWARD CROSS-BORDER TRADE AND COOPERATION IN THE
    REGION. THE COMMENT WAS RAISED THAT THIS WAS A VENUE THAT
    HAD NOT EXISTED IN THE PAST.

    ¶20. THE USG PARTICIPANTS EXPRESSED GREAT CONCERN THAT THE
    REDUCTION IN THE FY06 BUDGET LEVEL FOR SARI/E OF 2.252
    MILLION DOLLARS WILL SIGNIFICANTLY IMPACT THE ABILITY OF
    THE PROGRAM TO IMPLEMENT THE OBJECTIVES APPROVED IN THE
    DECISION MEMO.  A LEVEL SHOULD BE ESTABLISHED ON A
    CONTINUAL ANNUAL BASIS BY ANE THAT MEETS THE NEEDS OF THE
    PROGRAM TO IMPLEMENT THE APPROVED OBJECTIVES.  THIS
    LEVEL, IN PAST, HAS BEEN BETWEEN 5 TO 7 MILLION DOLLARS A
    YEAR.

    ¶21. OF THE NINE USAID ADVISORY BOARD MEMBERS, TWO MISSION
    DIRECTORS AND FOUR TECHNICAL DESIGNEES WERE PRESENT. TWO
    ADDITIONAL USAID TECHNICAL OFFICES, EGAT AND E&E, WERE
    ALSO PRESENT. THOUGH THERE WAS A MAJORITY BOARD
    REPRESENTATION, IT WAS STRONGLY FELT THAT THE FIRST
    ADVISORY MEETING SHOULD BE HELD AT THE PRINCIPAL LEVEL.
    THE CONSENSUS WAS THAT A MEETING OF USAID MISSION
    DIRECTORS AND ANE OFFICE DIRECTORS WOULD BENEFIT THE
    REGION ON A NUMBER OF AREAS BEYOND JUST ENERGY.  AS SUCH
    THEY SUGGEST THE CONVENING OF SUCH A MEETING IN MAY/JUNE
    OF 2006 IN THE REGION.  AT THAT MEETING THE SARI/E
    ADVISORY BOARD WOULD FORMALLY MEET FOR THE FIRST TIME AND
    WOULD BE ABLE TO EFFECTIVELY FUNCTION AS INTENDED IN THE
    DECISION MEMO. IN THE MEANTIME A VIRTUAL SARI/E BOARD
    APPROACH WILL BE NECESSARY.  THIS VIRTUAL APPROACH WILL
    BE USED TO FINALIZE THE RESULTS FRAMEWORK BY THE TIME OF
    THE FIRST FULL BOARD MEETING.

    ¶22.       THIS CABLE HAS BEEN CLEARED BY USAID FROM ALL
    PARTICIPATING POSTS.

    CHAMMAS

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