energy development and production are vital elements in the development process, that energy shortages in developing countries severely limit the development process in such countries, that twothirds of the developing countries which import oil depend on it for at least 90 percent of the energy which their economies require, and that the dramatic increase in world oil prices since 1973 has resulted in considerable economic hardship for many developing countries. The Congress is concerned that the value and purpose of much of the assistance provided to developing countries under sections 103, 104, and 105 are undermined by the inability of many developing countries to satisfy their energy requirements. Unless the energy deficit of the developing countries can be narrowed by more fully exploiting indigenous sources of energy such as oil, natural gas, and coal, scarce foreign exchange will increasingly have to be diverted to oil imports, primarily to the detriment of longterm development and economic growth.

(B) 33 The Congress recognizes that many developing countries lack access to the financial resources and technology necessary to locate, explore, and develop indigenous energy resources.

(C) 33 The Congress declares that there is potential for at least a moderate increase by 1990 in the production of energy for commercial use in the developing countries which are not members of the Organization of Petroleum Exporting Countries. In addition, there is a compelling need for vigorous efforts to improve the available data on the location, scale, and commercial exploitability of potential oil, natural gas, and coal reserves in developing countries, especially those which are not members of the Organization of Petroleum Exporting Countries. The Congress further declares that there are many benefits to be gained by the developing countries and by the United States and other developed countries through expanded efforts to expedite the location, exploration, and development of potential sources of energy in developing countries. These benefits include, but are not limited to, the following:

(i) 33 The world's energy supply would be increased and the fear of abrupt depletion would be lessened with new energy production. This could have a positive impact upon energy prices in international markets as well as a positive effect upon the balance of payments problems of many developing countries.

(ii) 33 Diversification of the world's supplies of energy from fossil fuels would make all countries, developing and developed, less susceptible to supply interruptions and arbitrary production and pricing policies.

(iii) 33 Even a moderate increase in energy production in the developing countries would improve their ability to expand commercial trade, foreign investment, and technology transfer possibilities with the United States and other developed countries.

(D) 33 Assistance for the production of energy from indigenous resources, as authorized by subsection (b) of this section, would be of

(C), and (D), respectively; redesignated subpars. (A), (B), and (C) of former par. (3) as clauses (i), (ii), and (iii), respectively; and added a new par. (2).

direct benefit to the poor in developing countries because of the overwhelming impact of imported energy costs upon the lives of the poor and their ability to participate in development.

(2) 33 The Congress also finds that energy production from renewable, decentralized sources and energy conservation are vital elements in the development process. Inadequate access by the poor to energy sources as well as the prospect of depleted fossil fuel reserves and higher energy prices require an enhanced effort to expand the energy resources of developing countries through greater emphasis on renewable sources. Renewable and decentralized energy technologies have particular applicability for the poor, especially in rural areas.

(b) 32 (1) 34 In order to help developing countries alleviate their energy problems by improving their ability to use indigenous energy resources to produce the energy needed by their economies, the President is authorized to furnish assistance, on such terms and conditions as he may determine, to enable such countries to prepare for and undertake development of their energy resources. Such assistance may include data collection and analysis, the training of skilled personnel, research on and development of suitable energy sources, and pilot projects to test new methods of energy production.

(2) 34 The President is authorized to furnish assistance under this chapter for cooperative programs with developing countries in energy production and conservation through research on and development and use of small-scale, decentralized, renewable energy sources for rural areas carried out as integral parts of rural development efforts in accordance with section 103 of this Act. Such programs shall also be directed toward the earliest practicable development and use of energy technologies which are environmentally acceptable, require minimum capital investment, are most acceptable to and affordable by the people using them, are simple and inexpensive to use and maintain, and are transferable from one region of the world to another. Such programs may include research on and the development, demonstration, and application of suitable energy technologies (including use of wood); analysis of energy uses, needs, and resources; training and institutional development; and scientific interchange.

(c) 35 The agency primarily responsible for administering this part and the Department of Energy shall coordinate with one another, to the maximum extent possible, the planning and implementation of energy programs under this chapter.

34 Sec. 304(c) of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3146) redesignated pars. (1) and (2) of subsec. (b) as subpars. (A) and (B), respectively, and added a new par. (2). Subsequently, designation of subpar. (A) was struck out and subpar. (B) was repealed by sec. 1211(a 2) of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 279). Subpar. (B) previously read as follows. "Of the funds made available to carry out this section, up to $7,000,000 for the fiscal year 1981 shall be used for purposes of paragraph (A) to facilitate geological and geophysical survey work to locate potential oil, natural gas, and coal reserves and to encourage exploration for potential oil, natural gas, and coal reserves in developing countries which are not members of the Organization of Petroleum Exporting Countries".

35 Sec. 304 of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3146) redesignated subsec. (c) as subsec. (d), amended former subsec (d) and redesignated it as subsec. (e), and added a new subsec. (c).

(d) 35 The President is authorized to furnish assistance, on such terms and conditions as he may determine, for the following activities, to the extent that such activities are not authorized by sections 103, 104, and 105 of this Act:

(1) programs of technical cooperation and development, particularly the development efforts of United States private and voluntary agencies and regional and international development organizations;

(2) 36 programs of research into, and evaluation of, the process of economic development in less developed countries and areas, into the factors affecting the relative success and costs of development activities, and into the means, techniques, and such other aspects of development assistance as the President may determine in order to render such assistance of increasing value and benefit;

(3) 36 programs of reconstruction following natural or manmade disasters and programs of disaster preparedness, 37 including the prediction of and contingency planning for natural disasters abroad;

(4) 36 programs designed to help solve special development problems in the poorest countries and to make possible proper utilization of infrastructure and related projects funded with earlier United States assistance; and

(5) 36 programs of urban development, with particular emphasis on small, labor intensive enterprises, marketing systems for small producers, and financial and other institutions which enable the urban poor to participate in the economic and social development of their country.

(e) 35 (1) There are authorized to be appropriated to the President for purposes of this section, in addition to funds otherwise available for such purposes, $207,000,000 for fiscal year 1986 and $207,000,000 for fiscal year 1987.38

(2) Amounts appropriated under this section are authorized to remain available until expended.

(f) 39 Of the amounts authorized to be appropriated to carry out this chapter $5,000,000 for fiscal year 1986 and $5,000,000 for fiscal

36 Sec. 104(b)(1) of the International Development Cooperation Act of 1979 (Public Law 96-53; 93 Stat. 360) struck out par. (2), which concerned various programs designed to alleviate energy problems experienced by developing countries, and redesignated pars. (3) through (6) as pars. (2) through (5), respectively.

37 The reference to the program of disaster preparedness was added by sec. 304(a) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1533). 38 The authorization figures for fiscal years 1986 and 1987 were added by sec. 309(b) of the International Security and Development Act of 1985 (Public Law 99-83; 99 Stat. 190). Authorizations for recent years included the following: fiscal year 1976 $99,550,000; fiscal year 1977$104,500,000; fiscal year 1978 $105,000,000; fiscal year 1979-$126,244,000; fiscal year 1980$125,000,000; fiscal year 1981-$140,000,000; fiscal year 1982-$147,200,000; fiscal year 1983$147,200,000; fiscal year 1984 $160,000,000; fiscal year 1985 no authorization; fiscal year 1988 no authorization; fiscal year 1989-no authorization; fiscal year 1990-no authorization; fiscal year 1991-no authorization; fiscal year 1992-no authorization; fiscal year 1993-no authorization.

Sec. 105 of Public Law 96-53 struck out language in subsec. (e) which provided $30,000,000 during the period July 1, 1975, to Sept. 3, 1977, for reimbursement to private voluntary agencies of the United States for costs incurred with respect to the shipment of food and nonfood commodities provided through private donations.

39 Subsec. (f) was added by sec. 307(b) of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 190).

Continued

year 1987 shall be used to finance cooperative projects among the United States, Israel, and developing countries.

Sec. 107.40 Appropriate Technology. (a) In carrying out activities under this chapter, the President shall place special emphasis on the use of relatively smaller, cost-saving, labor-using technologies that are generally most appropriate for the small farms, small businesses, and small incomes of the poor.

(b) Funds made available to carry out this chapter should be used to the extent practicable for activities in the field of appropriate technology, including support of an expanded and coordinated private effort to promote the development and dissemination of appropriate technology in developing countries.

Sec. 108.41 Application of Existing Provision.-*** [Repealed-1978]

Sec. 108.42 Private Sector Revolving Fund.-(a) 43 The Congress finds that the development of private enterprise, including cooperatives, is a vital factor in the stable growth of developing countries and in the development and stability of a free, open, and equitable international economic system. It is therefore in the best interests of the United States to assist the development of the private sector in developing countries and to engage the United States private sector in that process. In order to promote such private sector development, the President is authorized to establish a revolving fund account in the United States Treasury. All funds deposited in such account shall, notwithstanding any provision in an appropriation Act to the contrary, be free from fiscal year limitations.

(b) 43 Of the funds made available under this chapter in each of the fiscal years 1986 and 1987, up to $18,000,000 may be deposited in this account. Such funds used in accordance with the policies and authorities of this section shall be in addition to other funds available for private sector activities under other authorities in this Act. Any reflows and income arising from activities carried out pursuant to this section, including loan repayments and fee income (as provided in subsection (e) of this section, shall be deposited into the revolving fund and remain available to carry out the purposes of this section. All funds in such account may be invested in obligations of the United States.

(c) 43 (1) The agency primarily responsible for administering this part is authorized to use the funds maintained in this revolving fund account to furnish assistance in furtherance of the policy of subsection (a) on such terms and conditions as it may determine. Amounts in the revolving fund account shall be available for obligation for assistance under this section only to such extent as may be provided in advance in appropriation Acts. Assistance may be provided under this section without regard to sections 604(a) and 620(r) of this Act.44

(2) Assistance under this section may be provided only to support private sector activities which—

(A) are consistent with the United States development assistance policies set forth in section 102 of this Act and with the development priorities of the host country;

(B) are the types of activities for which assistance may be provided under sections 103 through 106 of this Act;

(C) will have a demonstration effect;

(D) will be innovative;

(E) are financially viable;

(F) will maximize the development impact appropriate to the host country, particularly in employment and the use of appropriate technology; and

(G) are primarily directed to making available to small business enterprises and cooperatives necessary support and services which are not otherwise generally available.

In determining whether an enterprise is a small business enterprise, the agency primarily responsible for administering this part shall take into consideration the enterprise's total net fixed assets and number of employees, together with the relevant definition utilized by the host country government and the International Bank for Reconstruction and Development and other international organizations.

(3)(A) Not more than $3,000,000 may be made available under this section to support any one project.

(B) Not more than 50 per centum of the financial support for any project may be provided under this section, and a substantial portion of the financial support for a project assisted under this section must be provided by sources within the host country.

(C) Not more than 20 per centum of the assets of the revolving fund account under this section may be used to support projects in any one country.

** Congress did not enact an authorization for fiscal year 1993. Instead, the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993 (Public Law 102-391), waived the requirement for authorization, and title II of that Act (106 Stat. 1643) provided the following:

"PRIVATE SECTOR LOANS PROGRAM ACCOUNT

"For the cost of direct loans and loan guarantees, $4,057,000, as authorized by section 108 of the Foreign Assistance Act of 1961, as amended: Provided, That such costs shall be as defined in section 502 of the Congressional Budget Act of 1974: Provided further, That these funds are available to subsidize gross obligations for the principal amount of direct loans and total loan principal, any part of which is to be guaranteed, not to exceed $81,319,000. In addition, for administrative expenses to carry out the direct and guaranteed loan programs, $1,347,000, to remain available until expended, all of which may be transferred to and merged with the appropriation for Operating Expenses of the Agency for International Development.".