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performance i s expected to improve following the award o f the concession o f railway services betweenDakar and Bamako to a joint venture o f private investors inFebruary 2003.

40.

Energy. The G o M has made important steps on reform and on increasing efficiency

inthe energy sector. Until2001, unreliable power supply was a major constraint for business expansion inM a l i and tariffs were below economic cost. The state power utility Energie du Mali (EDM) was poorly managed and lacked finds to ensure quality and reliability o f services and to expand access to electricity. In 1999, the G o M issued a policy letter with the following goals: (isector liberalization, allowing initiatives from communities and the private sector; (ii institutional reforms to orient the State’s responsibility to activities o f strategic and regulatory nature; (iiivalorization o f national energy resources (renewable energy, hydroelectricity); (iv) protection o f forestry resources through sustainable exploitation benefitingrural populations; and (v) pursuingpetroleum research. The goal is improved sector efficiency, a withdrawal o f the public sector from operations, and to extend service coverage. To that end, the G o M has restructuredthe sector by adopting a new Electricity Law and its implementation texts, which ends EDM’s monopoly and has opened the sector to competition, under a regime o f transparent regulation by an independentagency. Reform processes and institutions needto be strengthenedto foster a lasting competitive business environment attractive to private investors and operators. The imperativeto provide

energy services to the poor calls for a spectrum o f energy services, innovative service delivery mechanisms, with participationby communities, NGOs and the private sector.

41.

Environment. In 1999 with the adoption o f the National Environmental Action Plan

(NEAP), the G o M strengthenedits policy for the environment with seven strategic axes, four

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    f which were to strengthen national capacity, restore degraded areas, organize a permanent

system o f control and monitor the environment. However, implementation o f the strategy has to date been ad hoc and partial. Soil degradation i s the number one environmental issue inMali: to improve i t s focus on this issue, the G o M i s currentlypreparing the National Soil Fertility Management Plan and has requestedBank support through various operations including the PASAOP and the proposed Rural Community Based Development Project (para. 80). As water management i s key to rural development, the National Irrigation Strategy, elaborated under the National Infrastructure Program (PNIR), concentrates on both large irrigation schemes as well as pilot actions and operations for small irrigation. Biodiversity also requires significant attention, although capacity for biodiversity management i s extremely weak. The G o M i s trying to address this through a Bank- supported pilot (the Rural Infrastructure Project) geared to exploring community-based conservation inan arid area while addressing structural issues at the national level.

42.

Regional Integration. Mali i s a member o f the Economic Community o f West

African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA). The ECOWAS Heads o f State endorsed the New Partnership for African Development (NEPAD) and confirmed the role o f the ECOWAS Secretariat as lead agency for implementation and monitoring. The U E M O A countries signedthe “Convergence, Stability, Growth and Solidarity Pact” (Pacte de Convergence, de Stabilitk, de Croissance et de Solidaritk), which commits all member countries to achieve macroeconomic convergence, and established a multilateral surveillance system. In2000, the UEMOA’s Customs Union eliminated all intra-regional tariffs and established the Common External Tariff, which has created new opportunities and a market that can support medium-size agro-industries inthe

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