As the country moves forward, there is a lot to be done within the arena of infrastructure development. For years, Somaliland was affected by major breakdowns and lack of sufficient, effective, affordable and reliable power sector. This makes it difficult to develop, particularly light and heavy industries which can bring more employment and prosperity to the country’s economy.
Electricity companies began with small self-investments on diesel engines which have a very low output and a very high cost, this causes local people to rely on burning trees for fuel and cooking purposes. This has caused major environmental devastation with chronic stresses placed on the natural environment. Researchers have shown that in 10 years major forests will turn into desert and will be unlikely to quickly return to their pre-desert state for a significant period of time. One of the driving forces for environment devastation in Somaliland is the high demand of charcoal in the local towns as well as the lack of employment.
One way local people make money is that middle men give them incentives to burn down all of the trees within their area without thinking about the major environmental problems these actions will take. This chronic situation has a major problem to the economy of the country, since the major backbone of Somaliland economy is based on livestock, which are declining both in quantity and quality because of the loss of much their major fodder and trees. If this trend continues it will have massive detrimental effects within Somaliland economy.
To create sufficient and reliable energy which can be affordable, the Ministry of Mining, Water and Energy has recently issued an energy policy which addresses the major problems within the sector and provides avenues for prosperity within Somaliland – particularly the energy sector. One of the major things that the policy highlights is the lack of regulations for managing investments in the energy sector.
Fortunately, thanks to the support of USAID, the first Energy Law in Somaliland since its independence has been drafted. One of the expectations of this project includes creating an environment which is conducive to and attractive for investment within the energy sector and development of related matters. The Law includes a special focus on renewable energy along with incentives for investment in coal processing, wind power, and the hydrocarbon industries within Somaliland.
It is expected that the Act will give special consideration and tax holidays for importers and producers of renewable energy, and investors in the energy sector. It is also expected that this approach will lead into an environment which will be conductive to Somali businesses.
We, therefore, urge the Somaliland Council of Ministers and the Somaliland Parliament to make this law a priority for their deliberations and discussions.
Source: Watershed legal services.