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Global Environment Facility

United Nations Environment Program


Medium Sized Project Proposal

Building Sustainable Commercial


Dissemination
Networks for Household PV Systems
in Eastern Africa
Using Shared Experiences to Help Companies
and Consumers Develop Markets

Final Version (6)


Nairobi. Kenya
June 2004

Submitted By
Energy for Sustainable Development AFRICA, Ltd.
PO Box 76406 Nairobi
Telephone: 254-2-577942/575902
mhankins@esda.co.ke

Energy for Sustainable Development, Africa

UNEP-GEF Medium Grant Proposal


Commercial Dissemination Networks for Household PV Systems
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Energy for Sustainable Development, Africa

PROJECT SUMMARY
Project Identifiers
1.
Building Sustainable Commercial
Dissemination Networks for Household
PV Systems in Eastern Africa;

2.

GEF Implementing Agency:

UNEP

Country/ies in which the project is


being implemented:
Kenya
Tanzania
Uganda
Ethiopia
Eritrea

Kenya: 30 August 94
Tanzania 17 April 96
Uganda 8 September 93
Ethiopia 5 April 94
Eritrea 24 April 95

5. GEF focal area(s), and/or crosscutting issues:

5. Operational program/Short-term
measure:

Climate Change

Operational Program 6: Removing barriers


and Reducing Implementation Costs to
adoption of Renewable Energy. The
project will share successful commercial
experiences and experiences of GEF PV
projects (including UPPPRE Uganda, ERT
World Bank Uganda, PVMTI Kenya,
UNDP-GEF Tanzania and WB-GEF
Ethiopia)

4.

Country eligibility:

7. Project linkage to national priorities, action plans, and programs:


All of the countries proposed have stated explicitly in their energy policies and development plans
that rural electrification is part of their national priorities. Government officials have welcomed a
project building the commercial development of PV. In 4 of the countries GEF efforts to develop
the PV market have begun or are in the planning stages.
Eritrea.
The sufficient, reliable and sustainable production and supply of affordable energy throughout
Eritrea is the main objective of the Ministry of Energy and Mines in the energy sector (MoEM,
1997). The general policy is to provide energy services based on a diversified supply of energy
sources. The policy aims at improving the living standards of the population through the provision
of affordable energy. It goes on to state that the implementation of the policy must be mindful of the
desire to halt, and in some cases, reverse the recent trend in environmental degradation, including
climate change causing green house gases.
Solar electricity is mentioned in policy documents as one of the environmentally friendly sources of
lighting for households. Policy documents mention a policy goal To exploit the potential of
renewable energy sources when the development is economical or when it complements the
Government's social policy. Much of the solar energy work is carried out by the Energy Research
and Training Center of the Ministry of Energy and Mines (Habtetsion and Tsighe, 2001). The
section below (from Habtetsion, 2001) lays out how ERTC is mandated to carry out this policy:
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The Energy Research and Training Center will continue to be supported in order to become a
center of excellence in its research, training and promotional activities in renewable energy
technologies, its specific roles being to:

Collect data on energy needs and develop and maintain a data base of the geographic
variations and potentials, and the climatic conditions conducive to renewable energy
exploitation;
Collect data on existing renewable energy technologies, including list of manufacturers and
design an energy information system that can combine socio-economic data with
technological and energy source potential information to enhance planning activities;
Assess existing and new energy technology products and processes for suitability and
effectiveness, and, when appropriate, adapting to meet local needs, rather than developing
new products and processes;
Offer various training programs for technicians in the energy sector;
Promote public awareness of the potential of efficient energy appliances and processes and
offer advisory services on renewable energy technologies;
Identify and promote local business opportunities in the design, production, installation and
maintenance of renewable energy products and processes;
Provide an initial repairs and maintenance service to renewable energy products and
processes, until such times as the private sector can fulfil that role.

International co-operation and support will be stimulated for the development and installation of all
renewable energy sources.
Over 500 kWp of PV has been installed; virtually all of this is by donors and a Government energy
center. There has been a number of training courses and installations, to raise awareness and
bring about promotions, mostly coordinated by the Government energy center (which also
maintains many of the countrys PV systems). IGAD conducted a market study for commercial PV
solar home systems, a national stakeholders awareness workshop and an exchange visit for
Eritrean entrepreneurs to Kenya.
See the bibliography and stakeholders report in the Annex for more details.
Uganda
Uganda faces significant constraints to its continued rapid economic recovery because of the lack
of adequate electrical power to meet economic and social demands. Less than 5 percent of
Ugandas population is served by the Uganda Electric Board (UEB), the national state utility that
maintains and operates the national grid. Just over 85 percent of Ugandas population reside in
rural areas. Fewer than 15,000 rural households are connected to the grid, considerably less than
1 percent of Ugandas rural population. Due to demand and pressure, UEB and Energy
Department of the Ministry of Natural Resources is promoting the expansion and diversification of
its rural electrification program.
The strategy adopted by the Governments Energy for Rural Transformation project (co-financed
by the World Bank and other partners) is to provide energy services to rural people (1) using least
cost methods (possibly with a one-time subsidy) and (2) using the private sector as a vehicle for
the delivery of energy. Policy papers explicitly mention PV as a key energy source for those
portions of the rural population, which are uneconomic to connect to the grid (see Uganda ERT
Project Appraisal Document).
The $1.2M UNDP-GEF Uganda Pilot Photovoltaic Project for Rural Electrification (UPPPRE) is
close to winding up. The project conducted a number of technical courses for PV businesses, put
in place a pilot finance program for companies and helped organize the industry into a working
group (Uganda Renewable Energy Association). However, the project did not adequately address
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the need for linkages between Kampala and rural target areas, and the proposed project will build
on the work of the previous project.
The Energy for Rural Transformation project has been approved by Uganda parliament, and
includes a considerable PV component. The proposed project will collaborate with this project by
assisting companies to develop their sales outreach programs. The project will invite major
stakeholders from to the project to participate in project activities. Further, it will, in policy and
outreach activities, promote associated elements of ERTs program, including smart subsidies for
PV and co-financing of PV companies. In the target district (Rakai and Kalangala) it will assist
companies to promote the ERT project benefits at grassroots levels. Further, it will share the
successful elements of this program with other countries (especially the results of the smart
subsidies in market development.
See the bibliography and stakeholders report in the Annex for more details.
Tanzania
During the 1990s a profound transformation of Tanzania economy was initiated. Macro-economic
restructuring and liberalization, as well as political and social reforms were initiated, of which some
are still under implementation. The newly established Energy and Water Utilities Regulatory
Authority (EWURA) is now revising the Electricity Ordinance and will prepare a bill for
deregulation, licensing for Independent Power Producers, regulations, for unbundling of electricity
sector into private generation, transmission and distribution utilities. In order for the energy policy
to comply with the new framework of macro-economic policies and structural changes in the
energy sector, the 1992 National energy policy was revised in 1999 and completed in 2000. The
policy has been under review by various stakeholders and cleared by the Inter-Ministerial
Technical Committee and is now awaiting Cabinet approval.
In section 76, the policy paper acknowledges that utilization of solar energy in the country is still in
its infancy. It makes a number of references to the use of solar PV and renewable energy in the
provision of rural energy needs. New energy policy includes the establishment of
A Rural Energy Fund to meet the financial constraints of the rural energy supply, including
renewable energy and rural electrification.
Promotion of entrepreneurship and private initiative in the production and marketing of
products and services for rural and renewable energy.
Ensure continued electrification of rural economic centres and make electricity accessible
and affordable to low income customers.
In Tanzania, a number of small initiatives have been conducted (mostly by NGOs) to promote PV
(i.e. the Karadea Solar Training Facility). However, the size of the country and the isolation of
many of the high potential areas (Mwanza, Mbeya, etc) have prevented development of the
industry. The Dutch Government has approved a $500k two year project that will assist the
development of joint Dutch-Tanzanian company. This company, Umeme Jua Ltd., has received a
loan from the Triodos Renewable Energy for Development Fund , and expects to fully cooperate
with the project.
As well, UNDP-GEF is currently developing a PV initiative targeted for Mwanza and the lake
region, and World Bank ERT has made initial contacts with the Tanzanian Government to establish
a program similar to that of Uganda in Tanzania. Further SIDA has developed a multi-million dollar
project aimed at building commercial infrastructure for PV. This GEF project will bring regional and
international players to the Tanzania market, and help them to take advantage of the new PV
projects and the emerging Tanzania market.
Kenya1
Kenya provides one model for commercial PV development. The industry has a strong private
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base, active promotional activities and creative sales Kenyas market has consistently stayed at
about 500 kWp per year since 1998 (this is worth over US$6 million). Over 150,000 households
(3% of the rural population) have a solar system. Other PV installations in the country include
several hundred PV water pumps, institutional power systems, electric fencing, communication
systems, and health center fridge systems. Real progress is being made in building sales to less
affluent groups through customer credit and competitive pricing. Presently installed PV systems in
Kenya (>3 MWp) displace on the order of 15000 tonnes/CO 2 per year.
In the region, the Kenya government has had the most proactive PV policy in the region (even if it
is hands-off). Government policy statements since the early 1980s have consistently encouraged
increased use of PV electricity. The government added solar energy to its entire national education
syllabus in the late 1980s. It removed the 45 per cent duty on photovoltaic (PV) equipment in
1986. Unfortunately Government re-introduced duties and value-added tax (VAT), albeit on a
lower level, on PV equipment in 1991 in a bid to increase government revenue.
PV systems continue to sell in the thousands. However, applying import duties and VAT on solar
systems is still arbitrary due to the ambiguous definitions of equipment and components set out by
the Ministry of Finance. The problem is compounded by the lack of quality control and code of
practices for PV systems and systems component. The government is in the process of addressing
the above problems as it has just received a World Bank-funded report which:
recommends an appropriate taxation regime for solar PV systems, components, spare parts
and accessories
recommends quality and service specifications and guidelines for solar PV systems and
equipment, and
recommends a mechanism for their implementation and dissemination. This report entitled
Study on Solar Photovoltaics (PV) Quality and Service Specification and Market Penetration
was presented to the Ministry of Energy in August 2001. Among others, the report
recommends the use of rural electrification fund to further promote PV electricity in the rural
areas.
The IFC/GEF PVMTI project in Kenya (US $5 million) has introduced new methods of financing
solar electric systems to address customer inability to pay high up-front costs for systems. The
program is anticipated to finance 5 million dollars worth of PV systems between 2001 and 2002,
but thus far no loans have been issued. PVMTI will test the potential for finance arrangements
with solar home systems, and it is likely to open up a wider market. The project is targeted to
address the needs of large companies, but is not addressing demand at local (i.e.
community/district) levels. This project will cooperate with PVMTI by seeking to link up new
markets with the finance sources that PVMTI is bringing to the table. It will also help the
successes of PVMTI to be replicated in other countries.
See the bibliography and stakeholders report in the Annex for more details.
Ethiopia
In 1994, the Government issued a new national energy policy intended to pave the way for
privatization of energy services2. It was also intended to move consumers from consumption of
traditional sources of energy to more modern ones, to alleviate prevailing energy generation,
supply and utilization problems, to make energy supply more dependable and to reduce any
environmental degradation caused by use of traditional and conventional fuels. In 2001-2002, the
Ethiopian Government went through a process of reorganization, resulting in new operational and
1

Inthisproposedproject,Kenyawillbeasourceregion,ratherthanatargetregion.Positive(and
negative)experiencesoftheKenyaPVexperiencewillbesharedwiththeothercountries.Kenyawill
benefitfromtheprojectthroughtheprojectssharingofothercountrydevelopmentsandthroughexpanded
accesstomarketsofKenyancompanies.
2
IPPsupto25MWarenow,theoretically,allowedtooperate,thoughthereisnoexperience.
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policy approaches to rural electrification.


Up until 2001, strategies for rural electrification were limited to grid extension and isolated
generator sets in rural centers. Like many African countries, Ethiopia has been late to actively
incorporate the use of renewables into rural energy or electrification programs. EREPDC is the
Government department charged with non-grid rural energy development and promotion.
However, now the newly created Ethiopian Electricity Agency regulates implementation.
In March 2002, a new draft rural electrification strategy was unveiled. The draft links rural
electrification with rural development priorities. It relates provision of electricity with agriculture,
health, education, water supply and promotion of the private sector, NGOs and community groups
in rural areas. It provides a strategy basis for parts of RE program, including for institutional,
technological, capacity building and financing. It also lies out how a Rural Electrification Fund
would be created and administered, and its interface with a Government RE unit, users
committees and EEA.
As well, over the last 2 years, there has been a growing awareness among policy-makers and
Government executing agencies about the role of renewables in power supply. There is general
agreement that solar PV will play a role in rural energy development. Lessons from the IGAD
household energy project have re-enforced this.
In Ethiopia, there has been little formal commercial development work with PV. An IGAD project
has conducted a number of activities to stimulate awareness and activity. These include 1) a PV
market survey, 2) technical courses for equipment manufacturers and installers 3) business
awareness meetings and 4) pilot installations for awareness raising in a high potential areas. The
pilot work in Awasso (southern region) has resulted in the commercial sales of several score of
systems, and results indicate that there is considerable repressed demand for PV among
households in the country.
A GEF project, under a much larger World Bank-supported program is proposed which will remove
identified barriers through a combination of policy reform, mass promotion of technologies, and
price reductions. A competitive market model for the dissemination of MHP and PV systems is
proposed. The PDF-B grant proposal specifically mentions the role that this proposed UNEP-GEF
project would play in strengthening its impact.
See the bibliography and stakeholders report in the Annex for more details.

8. GEF national operational focal point endorsements (see attached letters in


separate file)
Eritrea
Mesghena, Tekleab
General Director
Department of Environment
Ministry of Land, Water and Environment
Ethiopia
Egziabher, Tewolde Berhan G.
General Manager
Environment Protection Authority
Kenya
K. Omudho, Benard O.
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Director
National Environment Secretariat
Ministry of Environment & Natural Resources
Tanzania
Rajabu, A.R.M.S.
Permanent Secretary
Vice President's Office
Uganda
Kassami, Chris K.
Permanent Secretary
Ministry of Planning and Economic Development

9 Project Objectives and Activities


Project rationale
Throughout East Africa, there is demand for modern electricity services from rural-based
consumers. However, grid-based power has reached less than 5% of rural households and small
market places in East Africa, and consumers are forced to pay extremely high rates for poor power
services (i.e. dry cells, kerosene, generators) because they have no other alternatives. The unelectrified rural population constitutes a demonstrable, quantifiable demand for the electrical
services that solar PV can often provide.
Where household energy demand is low and homesteads are not located close together (i.e.
where rural electrification is not practical), PV is often a cost effective way to provide power for
lighting and amenities. The most sustainable and viable method of delivering solar PV products
and services to rural markets is through the private sector. However, in many parts of East Africa,
neither rural consumers nor key delivery agents are aware of the potential of the technology.
Among companies, consumers, decision-makers and other stakeholders, a lack of understanding
of the role solar PV in rural electrification is a primary barrier to the development of the industry.
There are a number of successful East African experiences in the development and dissemination
of PV, both commercial and technical from which the rest of the region can learn. For example,
Eritrea has among the highest installed PV capacity per capita in the world, while Kenya has
thriving commercial markets for PV. Meanwhile, Uganda, Ethiopia and Tanzania are set to
embark on large GEF-funded PV projects. As these countries develop projects, it is important that
they exchange experiences and learn from one another to avoid costly mistakes.
This project will show how properly developed linkages between companies, consumers and
communities can result in self-perpetuating markets for solar technology. In four countries, the
project will strengthen the private sectors ability to supply small PV systems to commercial
markets in targeted districts. Replacing kerosene and petroleum-fueled grid expansion with PV
can displace significant amounts of CO2 emissions and provide a clean development future.
This project will build linkages between consumers and institutions on the one hand, and suppliers
and installers of PV systems on the other. It will build awareness of the existing market for small
PV systems in selected areas in each of 4 target countries. Through promotion and training
activities focused in target regions, the project will assist stakeholders to develop sustainable
commercial supply chains. The project will benefit:
household consumers by providing them with competitively-priced alternatives for electric
power
national solar companies, installers and sales agents by helping them develop commercial
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business that will grow after the project


institutions and small businesses by making available power systems for lighting, pumping,
refrigeration and ICT power.
policy makers by enabling them to see how other countries in the region and elsewhere in the
world have built enabling environments for the PV industry
regional and international solar PV suppliers by providing them information about markets and
players in each of the countries.

Finally, and perhaps most critically, the project will provide needed investment to growing
companies to enable them to become sustainable enterprises. As part of its existing plan, Triodos
Renewable Energy for Development Fund (TREDF) (formally Solar Development Foundation)
seeks to invest $400,000 or more over the course of the project in companies which have the
qualities necessary to prosper in the market. Much of the work of this project will revolve around
selecting and supporting these companies, as well as others now emerging. Triodos Renewable
Energy for Development Fund (TREDF) investments will ranging between $20,000 and $100,000
or higher, depending on the capacity of the company to absorb and repay the investment, the risks
of the loan and the decisions taken by the TREDF board (which will have the final word in all
investment decisions). The over-riding purpose of the TREDF loans is to invest in growing
companies with soft loans, and to provide them with basic assistance, so that they can become
more attractive for equity investment in the future.
It should be noted that all TREDF decisions are made by the TREDF board, and that this project
will not be able to make final decisions about loans for companies. It will be able to facilitate
introductions and the development of agreements between companies and TREDF, and it is hoped
that the Regional PV project will result in $400k of additional TREDF investments. Further, the
project will be able to provide TREDF clients with technical support, in addition to other
beneficiaries.
See Annex for a description of the TREDF programs.
During the PDFA activity, stakeholder workshops were held in each country to introduce the project
and to solicit ideas on the development of the project. As well, stakeholders selected the districts
in which the project would work based on the following criteria:
Regular incomes from agriculture, mining, etc.
High population density
Accessibility of district for businesses
Low grid expansion rate
Demand for radio, TV and light
The selected districts were are follows (see Workshop reports for each country for details):
Uganda: Rakai and Kalangala
Tanzania: Iringa
Eritrea: Mendifera
Ethiopia: Jimma
There are a number of other projects in the region, both active and planned that can be
complimented by this project. The project will endeavor to ensure co-operation and exchange of
information throughout the duration of the project. These were discussed in the previous section.
In particular the project will collaborate with the UNEP/GEF Renewable Energy Enterprise
Development project as described below.
Linkages to the Proposed REED Project
The project will cooperate closely with the proposed UNEP/GEF Renewable Energy Enterprise
Development project. The REED project, as proposed, is targeted to assist in the development of
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renewable energy enterprises. It will be active in a number of African countries; Tanzania is the
only one with which this project overlaps. Unlike the proposed Regional PV Commercialization,
the REED project will focus on a number of renewable energy technologies. However, it is similar
in that it proposes to help build business infrastructure, and works from the premise that building
renewable energy businesses is a key method of promoting renewable energies.
The proposed Regional PV Commercialization project will work closely with the REED project.
First, upon approval, the project managers of the Regional PV project will meet with the managers
of the REED project to discuss how the efforts can strategically assist one another and avoid
duplication of efforts (the results of this meeting will be provided in a report). Secondly, the
Regional PV Project will utilize the business training material that has been developed by REED
and AREED in its business training packages. Thirdly, the Regional PV project will actively invite
companies with which REED is working with the participate in training activities and conferences,
particularly in Tanzania where the REED project will have activities. Finally, the Regional PV
project will be able to assist REED PV entrepreneurs with specific information about PV as
necessary, and to introduce them to Triodos Renewable Energy Development Fund, should they
be in need of financing.
Objectives:

Indicators:

The overall objective is to stimulate increased


rural sales of PV by increasing consumer
awareness and by sharing experiences between
commercial markets and projects in region.
Other objectives are to:
Select, prepare and make investments in 510 PV companies with $400,000 of Triodos
Renewable Energy for Development Fund
finance This target investment $400,000 is
for the region as a whole.

Build linkages between East African country


PV sector stakeholders, including
companies, dealers, NGOs, rural energy
projects and international companies.

Increase involvement of international PV


companies in the region by building
awareness of potential markets, linking
them with local players
In each country, assist to develop market
linkages between the major commercial
center (Addis, Asmara, Dar, and Kampala)
and a selected rural district. In each district,
to increase awareness of PV among
consumers, suppliers, sales agents and
technicians.
To develop local capacity to sell, install and
service PV systems.

Increase in activity, number and


diversity of national companies active
on national basis in each country
(target is to move from 3 to 5 in Eritrea,
from 3 to 6 in Ethiopia, from 5 to 8
major players in Uganda and from 3 to
6 in Tanzania). NB Work focus will be
to increasing capacity and linkages
between rural and urban dealers and
international and national dealers.

Increase in number of PV dealers,


technicians active at target district
level. Two dealers to stock PV in each
of the 4 target districts, 10 technicians
to be involved in PV installation in each
target district. 5 sales people to be
involved in each target district.

Increase in number of small solar PV


systems sold and availability of
equipment in target regions. At
present, PV is not available. Target is
to make PV available in a minimum of
2 shops in each district.

$400,000 approved by TREDF board


and invested in companies in the 4
countries. Investments will be made in
a minimum of 5 companies (NB. This
outcome is subject to TREDF Board
approval and not within the scope of
the project)

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Indicators:

Project outcomes:

Increase in numbers of importers and


linkages of importers with target regions.
target is to move from 3 to 5 in Eritrea, from
3 to 6 in Ethiopia, from 5 to 8 major players
in Uganda and from 3 to 6 in Tanzania).
Companies will sell a total of $400,000
value of equipment to target areas over the
course of the project.

Increase in numbers of dealers of PV and


12VDC equipment at local level from zero
to a minimum of two stockist/dealers per
district

Increased in numbers of trained


technicians and sales people involved in
PV installation in target regions. 10
technicians to be trained in PV installation
in each target district. 5 sales people to be
involved in each target district.

Increased participation by international PV


companies in the PV markets of Uganda,
Tanzania, Eritrea and Ethiopia.

As a direct result of project activities, installation


of more than 750 PV solar home systems in the
targeted districts, and a measurable growth in
the rural PV sales in Uganda, Tanzania, Eritrea
and Ethiopia. Five years after the project, we
expect that 3000 systems will have been
installed in the 5 districts.

Increase in number of collaborating finance


groups interested in developing finance
schemes for PV and sustainable rural
energy. Target is one pilot finance program
in place in each target district with a total
loan value of $50,000. At present there are
no PV loan programs in place.

Increase in numbers of systems sold.


Project targets combined sales of 750 PV
systems (SHSs) in 4 target districts over
period of the project, worth a total of over
$400,000.

Increased levels of transactions between


importers, manufacturers and distributors
active at the national level and regional
businesses. Target is a total of $400,000
worth of business in the target districts, and
increase of 80%.

Numbers of policy makers that attend


workshops

Actual changes in duties, taxes, or policies


towards PV/rural electrification in target
countries. Documents forwarding the
harmonization of policies in the region.

An operational commercial delivery route in


place between the capital city and one rural
district of each country. This will include:
at least one national importer,
several dealers in the target district,
at least ten technicians and sales agents in
the target district,
interested community development NGOs
interested micro-finance groups and
hundreds of potential PV customers
Educated PV businesses in cities of each
countries that are actively seeking to develop
commercial rural markets
A network of influential policy makers --- who are
aware of the necessity of including PV in rural
electrification plans and will actively lobby for
such plans.

The project will reduce carbon emissions from


kerosene lanterns in 4 districts. From systems
installed within the project timeframe, a relatively
small amount of reductions would be
experienced (i.e. <300 tonnes/year per district).
However, there are two points that need to be
considered: a) if each of the PV sectors
continues to grow sustainably, within 5 years the
4 target districts would have a combined
cumulative CO2 displacement of almost 6000
tonnes from 3500 installed systems. b) If the
companies applied the methods learned to other
districts, we would expect the CO2 displacement
to be 5-10 times that experienced in the target
districts. Ethiopia would be likely to surpass
Kenyas present level of 15,000 tonnes/year
displaced due to PV systems

Number of relationships between


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international traders and target countries.


Direct communication between
international PV companies and
national/urban based PV dealers.

Reduced carbon emissions from kerosene


lanterns (2400 tonnes CO2 displaced over
period of the project). Much larger
amounts due to spillover affects of the
project.

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Planned activities to achieve outcomes

Activity A: Management and Technical


Support
A management team will be put in place to lead
the project over its two-year duration. The team
will consist of a project director (25% time), a
project field manager (100% time), 4 in-country
consultants for each country (25% time) and a
technical team. For other activities, assistance
will be out-sourced.

Indicators:
Team identified and in place to manage project
in each country. All contracts, ToRs and
agreements prepared.
Final work plan prepared.

The project management team will make regular


trips to the participating countries. As planned,
the team will visit each country 8 times over the
course of the project (i.e. once per quarter). The
management team will be experienced in the PV
industry, and will, in addition to running the dayto-day activities of the project, serve as
facilitators who are able to provide both
technical advice and business assistance to
companies.
The management team will have the following
responsibilities
Identification and hiring of consultants,
promotion agents, and other project
related assistance in each country
Production of site specific work plans.
Day-to-day management and
coordination of the project.
Technical input as required.
Interface of project with private sector,
multilateral projects, GEF-UNEP.
TOTAL COST:
$334,740
GEF Contribution:
$334.740
TREDF Contribution:
$0
Company Contribution $0

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Activity B: PV SHS Trade Fair and Project Kick


Off Meeting
A meeting will be held in Nairobi at UNEP to
examine progress and prospects for PV in rural
electrification in East and Southern Africa,
focusing especially on commercial successes.
Approaches used to develop rural PV markets in
Africa and elsewhere will be explored. This will
be the first of 3 meetings (see below).
The meeting will invite stakeholders from each
of the participating countries, emphasizing the
involvement of the private sector, including
Triodos Renewable Energy for Development
Fund clients. It will look at the state of the art
of PV for SHS in the world and each
participating country. The 2 day meeting will
have workshops in the following topics:

Financing. This session will examine


successful models of SHS finance, and will
present case studies.
Technology. This session will examine
types of equipment available for the SHS
market, and present and future trends in
equipment sales.
Promotion. This session will present
successful marketing and sales case
studies from the region and elsewhere.
Policy. Harmonization of duties and
taxation, subsidies, and relevant
Government policies will be discussed.
Standards. There will be sessions on
progress that each country (and/or project
has made on standards as well as methods
of harmonizing them regionally.
Multilateral programs and their
stakeholders. Presentations by WB (ERTUganda, Energy Access Project Ethiopia
and Mozambique and others) and UNDP
Tanzania. Projects will be explained, giving
role of PV in rural electrification. As well,
the outputs and lessons of such programs
as the UNEP-E&Co AREED initiative will be
discussed.

The meeting will host a trade fair, inviting


interested companies to set up stands
demonstrating their products. It is hoped that a
meeting in Nairobi with participation from PV
companies all over the region would attract
major international PV and BOS suppliers.

Meeting report prepared which contains:


Analysis of PV experiences in each
country so that there is complete
baseline data for the project.
Financing case studies
SHS technology updates
Sales and marketing case studies
Policy report
Briefs on active solar PV projects in the
region
Lists of companies and products
available

Detailed project work plan produced and


distributed to project team (management,
consultants, partners)

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At the end of this 2.5 day meeting, a one-day


project kick off meeting would be held with the
project team from each country to plan project
activities.
TOTAL COST:
$36,800
GEF Contribution:
$11,000
TREDF Contribution:
$17,000
Company Contribution $8,800
Activity C: Market Assessment in Target
Regions of each Country.
To meet the objective of building capacity and
awareness at district level, the project will hold a
series of activities in each target district which
involve private sector stakeholders. The target
districts, as identified during stakeholders
meetings in each country are:
Target District/Regions
Uganda: Rakai and Kalangala
Tanzania: Iringa
Eritrea: Mendifera
Ethiopia: Jimma
A baseline survey for each country and market
study will be conducted in each district.
The markets study of each district will:
Identify population sectors willing and able
to afford systems. Aggregation of demand
in kWp, projection of demand growth.
Identify existing market and base of installed
systems. Survey use of DC appliances and
battery
Develop market profile including SHS
consumers, businesses, NGOs, etc.
Assessment of system sizes demanded and
demanded.
Assessments of finance players in district
and their interest in working with project.
Development of relationships.
Identification of potential outlets, sales
people and technicians in target district.

Market report and study prepared for each


country. Copies distributed to companies
and organizations working in target
districts.

Meeting held in each country and target


district to discuss output and implication of
market report.

Awareness seminar about PV and SHS


held in each target area

During this activity, initial awareness raising


seminars about PV and 12VDC appliances will
be held
Local consultants will manage this activity.
Companies will be actively encouraged to
participate in this activity and to begin forming
relationships with agents and technicians.

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TOTAL COST:
$11,880
GEF Contribution
$7,740
TREDF Contribution:
$0
Company Contribution:
$4,140
Activity D: Business Opportunity Awareness
Raising, Business Assistance and
Investments in Companies
This portion of the project will be financed and
managed by Triodos Renewable Energy for
Development Fund -- in close collaboration with
the project team. The project will seek to
increase TREDF investment in the region by
over US$ 400,000, through identification of 5 to
10 additional companies that would not be
included in their portfolio. This investment will
be entirely dependant on (1) the financial
climate in each country, (2) the existence of
viable companies (TREDF has already identified
a number) and (3) the approval of these
companies by the TREDF board. It should be
noted that this investment has already been
mobilized and committed and that TREDF is
already actively seeking to engage companies
to build PV business. The efforts of this project
will complement the TREDF strategy by building
linkages upward (i.e. with international
companies), laterally (i.e. with regional
companies) and downward (i.e. into rural market
areas) in ways that are presently not being
done. This project will seek to open the eyes
of businesses to the potential and real markets
that are in rural areas.

TREDF trips to each country to meet


companies, introduce TREDF program, and
shortlist viable companies
One-on-one meetings with PV companies to
assess their capacity to absorb investment and
grow
$400,000 invested in 5 to 10 companies in the
region by Triodos Renewable Energy for
Development Fund . Note that this is fully
dependant on the approval of TREDF board.
Management and business development
assistance rendered to selected companies

The activity will raise awareness among


companies about the potential for PV SHS
business, particularly concentrating on
opportunities in each of the target districts. It
will be an interactive process focusing on
several major sub-tasks:

Raise awareness among the urban


business community of the potential of the
PV market
Present the results of the recently
completed PV SHS survey
Highlight viable business areas

Build business linkages among PV businesses


locally (i.e. with battery manufacturers,
appliance suppliers, etc.), upward (i.e.
regionally and internationally) and downward
(i.e. into the target district).
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Provide assistance in the specialized nature of


the PV businesses

Assistance to develop and execute business


plans, particularly where the project is
active.
Management training

This activity will incorporate the experiences of


other organisations and activities, such as
REED, other PV projects and experiences.
Triodos Renwable Energy Development Fund,
ESDA, and local consultants will develop
resource delivery methodology.
TOTAL COST:
$400,000
GEF Contribution: $0
TREDF Contribution: $400,000
Company Contribution: $0
Activity E: Technician and Sales Training
In order for PV to be taken up by companies in
the target district, a minimum level of technical
and sales capacity must be in place. Technical
and sales training courses will be facilitated in
each country, based on the priority needs of
each country and its stakeholders. These
courses will be held in the target districts,
involving local people and companies.

Training of trainers sessions will be held in a


central location (one each for SHS technical
training and SHS sales) with pre-selected
instructors from each country. The purpose
of the ToT will be to enable one or more key
trainers from each country to be able to
return to the country and conduct training
courses.
Basic installation training courses will be
held in each country using the instructors
trained in the above-mentioned ToT. The
purpose of these courses is to give private
sector-based installers practical skills and
knowledge of SHS installation, design and
after-sales service. Technicians will be
instructed on how to train end-user to
maintain and service systems as well.
Participants will include installers, system
maintenance and marketing personnel from
participating companies and NGOs. Criteria
for participation in the courses will include
(1) having minimal academic or experience

Training of Trainer course held in


central location for SHS installation and
PV sales. 10 trainers representing all 5
countries attend.

Training course manual and kits


distributed to three participating
companies in each country.

One or more trainer with capacity to run


sales and technical training in each country.

Basic installation course held in each target


region (at least one course, though
individual companies may hold more)
attended by 10 installers from target region.

Sales and PV agent support courses held


in each country and in target region. At
least 10 people from each target region
and participating companies attend.
AREED Business Information packages,
developed under the AREED project, will

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qualifications (2) likelihood of participant


working in target district after completing
course, (3) ability to contribute to cost of
course, (4) existing links with participating
businesses. The local consultants and
project officers will make decisions for
choice of participants in training courses.

be distributed at these sessions.

Basic sales and marketing courses will be


held with participating distributors and
agents. This course will teach interested
local agents about the SHS and PV
technologies, methods of selling, displaying
and planning market programs.

The involved groups will be encouraged to


market and install systems, according to
business plans developed by companies in the
business training work. The training courses will
be synchronized with other elements of the
project to reduce travel costs.
TREDF has expressed a willingness to cofinance some of this activity for selected
companies, though it is not included in the
existing budget. The project will also approach
other entities (companies, projects, etc. to seek
co-funding for these activities).
TOTAL COST:
$81,440
GEF Contribution:
$75,000
TREDF Contribution:
$0
Company Contribution: $6,440
Activity F: Country PV Trade Fairs and
Seminars
Over the course of the project, three
international PV fairs will be held (the first is
the meeting in Nairobi described in Activity B) to
help regional companies refine their product
offerings on a local basis.

Meeting held in Uganda and attended by major


stakeholders including 5 international PV
companies, GEF projects from Kenya,
Tanzania, Uganda and Ethiopia, major
customers financiers, etc..
Seminar report prepared

One meeting will focus on PV SHS and the


variety of equipment available (to be held in
Uganda). It will coincide with a regional
meeting on PV policy (see Activity I)
One meeting will focus on local
manufacturing opportunities and consumer
demand for PV appliances (to be held in
Tanzania)). It will coincide with a regional
meeting on PV finance opportunities (see
Activity J).

Meeting held in Tanzania and attended by


major stakeholders including the international
PV companies, GEF projects, major customers
financiers, etc..
Seminar report prepared

These meetings will provide opportunities for


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international, regional and local companies


to interact, form business linkages, and
learn from each other. It is crucial that
representatives of the major PV
companies, balance of system suppliers
and major projects are attracted to these
meetings.
These meetings will provide updates on
standards and code-of-practice development in
each country.
These meetings will give international and
regional companies full overview of active
markets and projects. They will include:
1 day formal presentations from selected PV
companies and case studies
1-2 days exhibition and individual
meetings and demand driven side
events (i.e. country meetings, project
discussion meetings)
After one of the meetings the project will
conduct the sales training ToT (see Activity
E).
TOTAL COST:
$46,300
GEF Contribution:
$22,800
TREDF Contribution:
$22,500
Company Contribution: $1,000
Activity G: Inter-Country Exchange Visits &
Information Exchange
The purpose of the exchange visits and
information exchange is to provide
entrepreneurs and other stakeholders with a
broad view of how various experiences and
projects have overcome market barriers. It is
proposed that visits be made to two countries
that have mature PV industries. Kenya and Sri
Lanka are proposed as viable models that
provide important lessons but are distinct from
each other.
Regional Visits.
PV entrepreneurs and key stakeholders from
Uganda, Tanzania, Eritrea, Kenya and Ethiopia
will be invited on several day study visits to learn
how successful solar home system markets
developed and how they presently operate. Key
among these will be visits Kenya, where there
is a US$10 million PV market in place.
Entrepreneurs will visit consumers in the field,
regional agents in small towns, and distributors

Visit to Kenya market held for 12 interested


entrepreneur during kick-off meeting.
12 entrepreneurs adopt practices and ideas
encountered during visit

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in large towns, as well as key project and NGO


players. At the end of the visit, they will have a
clear idea of how the market operates, as well
as the positive and negative aspects of the
model. Study visits to the Kenya market will be
made during the Kenya trade fair.
International Visit
A team of key players from the region will visit a
successful commercial PV market in an Asian
country (Sri Lanka is suggested). The trip will
focus on business models, consumer
relationships, warranty and QC issues, financing
schemes, industry associations, etc. The
purpose of this visit is:
To see how Asian companies have driven
down prices and delivered equipment by
concentrating on volume sales (Asian prices
are much less than those of Africa)
To critically assess how the private sector
has worked with successful GEF projects,
focusing particularly on how projects have
built the market through use of quality
control, industries associations, business
loans and micro-credit and subsidies and
grant.
To examine how finance, policy, technical
training, quality control, industry association
formation and awareness raising has been
done in these countries.
To build business linkages between traders
in Sri Lanka, Asia and Africa

Visit to acceptable country held 12 for selected


entrepreneurs.
Entrepreneurs adopt practices and ideas
encountered during visit

Information from the AREED business


experience will be circulated as part of this
outcome.

Entrepreneurs will be expected to co-finance


their own hotel and DSA costs during the trip.
The project management team and TREDF
representative will select entrepreneurs for
international visits. Criteria for the selection of
participating entrepreneur will include:
Demonstrated activity in PV business in
the country
Quality business plan/proposal for
development of PV in their country
Demonstrated ability to co-finance DSA
and hotel expenses
Participation in the target district PV
development activities
Demonstrated capacity and interest in
building the PV market
Solid company financial base, including
audited accounts, etc.

Solarnet issues circulated to 100 additional


businesses in the region with useful information
about the industry.
Solarnet reports on country visits provided to
project management.

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Information Exchange
Access to information is key for companies to
grow and expand their markets. The project will
provide participating companies with access to
technology information and finance information
through its regular activities.
Two year subscriptions of Solarnet magazine
will be provided to all participating stakeholders,
The purpose of the proposed activity is to use
Solarnet magazine as a vehicle for sharing
information about PV in the region. Solarnet
staff will produce regional supplements --- i.e.
additional material over and above the
magazines normal material --- 8 times over the
course of the project. These supplements will
be coordinated with project activities as they
occur. They will explain project activities (as
well as other PV projects and initiatives) to
companies, finance groups, Government, and
NGOs. The proposed budget includes extra
funding to allow the magazine to reach 100
more stakeholders (i.e. over and above its
present subscribers).
Four of these supplements will focus on the PV
industry of the involved target countries
(Ethiopia, Eritrea, Uganda and Tanzania).. They
will contain lists of active players, descriptions of
markets, articles about experiences unique to
the country. They will explain how companies
and interested parties can benefit from on-going
activities. As indicated in the budget, Solarnet
magazine will visit each country at an
appropriate time to research the status of the
industry, to identify stakeholders and to collect
information about on-going projects and
opportunities.
The project will also distribute resources,
including the SDG PV Entrepreneurs Handbook
and the AREED Business Planning guide.
TOTAL COST:
$58,850
GEF Contribution
$53,850
TREDF Contribution
$0
Company Contribution
$5,000
Activity H: Region-Based Awareness
Raising and Promotional Campaigns
The major barriers that the project is seeking to
address in the target regions are a) the lack of
awareness of the SHS technology (as opposed
to larger community systems) and b) the lack of

At least 3 5 systems will be installed for


larger uses for awareness raising and
promotion (schools, video cinema, battery
charging, etc) depending on the desires of
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business infrastructure to deliver SHS and small


PV systems to the target rural.
To overcome these barriers, the project will work
closely with entrepreneurs in the target area and
at the national level to develop delivery through
existing outlets. A series of promotional activities
will be held in target areas that introduce and
demonstrate PV SHS technology, get local
businesses interested and provide an
opportunity for villagers to see, understand and
purchase solar home systems. At the same
time awareness raising and promotional
community or income generating systems (at a
first-time buyer discount) will be installed to
provide awareness raising and promotion.
Companies and technicians (identified and
trained through the project) will be fully involved
in this campaign.

the community
A minimum of 30 PV systems installed in
each target (total of 120 in project) by local
companies and technicians. Maintenance
contracts in place for all systems.
Over course of project, 750 customers
purchase systems on a cash basis within
target districts.

The promotion campaign will primarily use the


following mediums, depending on the needs and
preferences of each country:
Drama: Short plays promoting solar home
systems will be written and adapted for each
country. Acting troupes will translate play
into local languages, and train local actors
to present it.
Radio: Programs about solar will be
created. Plays will also be adapted for
radio. Support for radio campaigns will be
sought from local companies.
Brochures: General brochures promoting
solar home systems as an alternative for
rural electrification will be produced in local
languages. These will be used on a national
level (i.e. distributed by energy centers and
by regional Governments) and as a key tool
during the promotional campaign in target
districts. The project will also distribute
approved brochures supplied by
participating companies.
Banners and posters: Banners and/or
posters will be produced to encourage use
of solar home systems. These will be used
during promotion campaigns and erected
permanently in the villages.
Each company will develop its own portable
awareness raising and promotional exhibits
during the project. These will be utilized by
companies and technicians to exhibit the
products each company has on offer.
Each company will be encouraged to use
any of their own promotional material during
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the project promotional campaign.


Even though PV is fairly well known at the
national level, it is still relatively unknown as a
consumer product at district levels in Ethiopia,
Tanzania, Eritrea and Uganda (especially in the
districts targeted for the project). This project
will use awareness campaigns (see above) and
promotions to help kick-start the PV SHS
market in the selected target districts.
Units to raise awareness and promote the
technology will be strategically placed and
designed so that they show how PV can be
cost-effective and attractive for rural customers
(including both households and small
businesses). Units for raising awareness and
promotion of the technology will be provided
through local PV suppliers at an attractive rate
to encourage early-adopters to take them up.
Additional financing could be sought through
Activity D. Minimum standards will be enforced
by the project when selecting installation
companies and maintenance contracts will be
set up with each system installed.
$15,000 in funds will be available in each of the
4 target districts in order to allow the project
implementers to creatively place systems in the
market through the new channels being
developed by the project to raise awareness and
promote the technology. These funds will
partially support purchase of systems from
participating dealers in each district. Such
systems will be used in the awareness raising
and promotional campaigns described above.
The systems will be sold to early adopter endusers in the districts on condition that the endusers allow the campaigns to make use of them
during project activities.
System installation for awareness raising and
promotion will be managed in conjunction with
the other promotion activities described above.
The local partner will coordinate this activity with
Government offices, companies and NGOs.
TOTAL COST:
$268,320
GEF Contribution:
$203,520
TREDF Contribution:
$0
Company Contribution: $64,800
Activity I: Policy Workshops

Policy workshop held

Each East African Government has a different


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rural electrification strategy, as well as different


approaches to PV duties (or subsidies),
standards, and capacity-building. This project
will bring together players working on PV within
Governments and projects to discuss the current
status of PV technology and their Governments
policy with regard to the technology.

Report prepared and distributed to relevant


stakeholders

Once key people are aware of what is


happening in neighboring countries, they will be
able to discuss regional potential for
harmonization of policies and ways that there
can be a shared benefit from major projects.
The project will hold one policy workshop which
will enable policy makers to exchange
experience in:
Duty and tax regimes
Standards and codes of practice
Subsidies/Rural Electrification policy
Capacity building
Licensing procedures etc
Project experience and policy
As well, the potential for harmonization of
policies and taxes using regional trading blocks
(e.g. EAC, COMESA) will be discussed.
TOTAL COST:
$9,950
GEF Contribution: $9,950
TREDF Contribution:
0
Company Contribution -0-

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Activity J: Finance Workshops

Finance workshop held

Previous projects have shown that it takes quite


a bit of time to build up awareness of potential
PV finance partners, especially at local levels.
Even with dedicated projects (i.e. PVMTI,
UPPPRE), it still takes considerable effort to
convince conservative finance institutions to
take up new products.

Report prepared and distributed to relevant


stakeholders

This project help to create PV financing


opportunities in two ways:
Catalyzing links between finance players in
each country and in the target districts (this
will be especially important in Tanzania,
Eritrea and Ethiopia)
Sharing of country experiences in PV and
SHS finance. One international workshop
on regional PV finance will be held
(institutions like the World Bank, AREED
and TREDF will use these opportunities to
explain their programs)
The project will develop linkages between larger
financing players --- including Triodos
Renewable Energy Development Fund/PVMTI
and regional financiers (i.e. country-based
finance organizations) and local players (i.e.
Savings and Credit Associations, consumer
credit groups, dealers, etc).
TOTAL COST:
$9,950
GEF Contribution
0
TREDF Contribution
$9,950
Company Contribution 0
Activity K: Monitoring and Evaluation
The project management team will prepare
monthly progress reports that will be assembled
into semi-annual progress reports. The project
steering committee will meet 5 times over the
course of the project (i.e. at project
commencement again after six months, at the
project mid-term, after 6 months, and again at
the end of the project). During steering
committee meetings, progress reports will be
carefully evaluated. They will then be forwarded
to UNEP. At the end of the project a final report
will be compiled by an independent consultant,
and submitted to the project steering committee
for final review.

Monthly reports prepared


Steering committee meetings 5 times over the
course of the project
Semi-annual progress reports prepared and
submitted to UNEP-GEF
Final evaluation exercise completed and report
prepared

TOTAL COST:
$20,350*
GEF Contribution $20,350*
TREDF Contribution
0
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Company Contribution 0
*Not included in project budget
12. Estimated budget (in US$ or local
currency):
PDF:
GEF:
Co-financing: TREDF
Company contributions:
Total:
13.
Information on project proposer:
Energy Alternatives AFRICA, Ltd.
PO Box 76406
Nairobi, Kenya
Tel. 254-2-714623/
Fax/Tel: 254-2-720909
Email: <energyaf@iconnect.co.ke>

US$ 24,400
US$: 693,600
US$ 449,450
US$: 90,180
US$: 1,257,630

Established in 1993.
Became a 50% owned joint venture of Energy for Sustainable Development (UK) Ltd. in 1998.
ESDA is locally registered in Kenya as a limited company active in the area of energy and
development consulting. has a full time staff of 8 consultants and support staff with expertise in
rural energy planning, project design and management, energy management, off-grid system
design and installation and renewable energy training.
Board of Directors:
Mark Hankins (Chair, American)
Daniel Kithokoi (Kenyan)
Bernard Osawa (Kenyan)
Stephen Mutimba (Kenyan)

Mike Bess (ESD UK)


Jeremy Doyle (ESD UK)
ESDAs mission is to help build local sustainable energy infrastructure by providing technical,
policy, training and management expertise in Eastern, Southern and the Horn of Africa. We work in
partnership with clients ranging from local communities to industry to international organizations to
help them choose energy options appropriate to their needs.
Energy for Sustainable Development AFRICA, Ltd. is a joint venture of Energy for Sustainable
Development. ESD and ESDAs combined turnover is over US$2 million per annum from a variety
of clients including :
World Bank
European Union
Dutch government
Kenyan government
IGAD
DFID
GTZ
UNDP GEF Small Grants Kenya
USAID
IUCN
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ITDG
Shell Foundation
Winrock International
Ashden Charitable Trust
Commonwealth Science Council (UK)
Various Kenyan hotels and institutions including Safari Park Hotel, Mater Hospital, Crater Lake
Hotel and others.
Booker Tate Ltd.

ESDA/ESD has been involved in planning of GEF activities for the World Bank and UNDP in
Mozambique, Uganda, Ethiopia, Tanzania and elsewhere. ESDAs managing director serves on
the board of the Kenya UNDP GEF Small Grants Program.
ESDA is currently managing several PV technology commercialization projects in the East Africa
region.
On behalf of IGAD and the European Union, ESDA is currently working with companies in
Ethiopia (Addis and Awasso) to increase develop the market for PV in the region. The project
is scheduled to end in October 2001. The project also includes promotional work in Eritrea.
ESDA is working for the Dutch Governments PSOM project in Tanzania. The project is
helping to establish a Dutch-Tanzanian solar PV company. ESDA is providing expertise on
market development and technician training.
ESDA was recently hired on a 2-year USAID-funded project managed by ADRA to assist in
development of renewable energy infrastructure in Puntland, Somalia.
Other ESDA projects include:
Renewable energy training: ESDA has more than a decade of experience in training technicians,
NGOs companies and projects about all aspects of renewable energy technology. ESDA has
conducted PV training courses in Kenya, Uganda, Malawi, Zimbabwe, Somalia and Tanzania for
UNDP-GEF, IGAD, the European Union, GTZ, DANIDA, the Commonwealth Science Council and
private companies
Renewable energy promotion and company assistance: ESDA has designed , installed and
supported PV systems in Tanzania, Kenya, Uganda, Malawi, and Somalia for a variety of clients.
ESDA designs and installs appropriate sustainable energy systems for applications ranging from
hospitals to ecotourism to remote households. Promoting small- and medium-scale renewable
energy enterprises is a key to developing the overall infrastructure of solar energies. ESDA has
assisted in the incubation of scores of businesses in the region.
Financing of RET businesses and end-users: ESDA has worked with a number of finance groups
to catalyze finance programs that meet the needs of rural communities and businesses alike.
ESDA designed and ran a project for ESMAP/World Bank to establish a pilot solar home system
loan program in Kenya (1995-98). In 1996, ESDA worked on a pilot solar home system loan
project in Kasase Uganda funded by the US Department of Energy.
Product design and test marketing: ESDA works in partnership with local and international groups
to develop new RET products that meet the specific needs of the region. Through test marketing
initiatives we help companies ensure that products will be successful. Recent projects include test
marketing of lanterns (funded by DFID/ITDG and the World Bank) and development of smaller
batteries and specialized PV products for the Kenya market (ESMAP/World Bank and European
Union).
Market study: ESDA conducts market studies for RET products throughout the East African region.
We have conducted PV market studies in Ethiopia, Eritrea, Kenya, Tanzania, Uganda and Somalia
for ESMAP/World Bank, the Dutch Government, the European Union and others.
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Clean Development Mechanism. ESDA/ESD is working with Booker-Tate and the Prototype
Carbon Fund to develop East Africas CDM project. The proposed project (which has been issued
a letter of intent by the World Bank) is a grid-connected 15 MW cogeneration plant fueled by
bagasse from sugar outgrowers in Busia, Kenya.
Improving biomass production, conversion and end-use technologies: ESDA uses proven,
commercially-viable project methods to catalyze better management of forest resources in East
Africa and the Horn of Africa. ESDA recently completed a project introducing improved charcoal
stoves in Somaliland and Puntland that was funded by IUCN/EU and the British Lotteries.
14.
Information on proposed executing agency (if different from above):
(information on the entity that will actually execute the project should be written here)
15. Project concept submission date: December 2001
16.
Project Identification number: to be determined
17. Implementing Agency contact person:
Ahmed Djoghlaf, Director, DGEF; email:gefinfo@unep.org
UNEP, P.O.Box 30552, Nairobi, Kenya
18.
Project linkage to Implementing Agency program(s): The United Nations Environment
Programme has initiated an African Rural Energy Enterprise Development (AREED) initiative.
AREED seeks to develop new sustainable energy enterprises that use clean, efficient, and
renewable energy technologies to meet the energy needs of under-served populations, thereby
reducing the environmental and health consequences of existing energy use patterns. The
AREED approach offers rural energy entrepreneurs a combination of enterprise development
services and start-up financing. This integrated financial and technical support allows
entrepreneurs to plan and structure their companies in a manner that prepares them for growth
and makes eventual investments by mainstream financial partners less risky.
What AREED has to offer includes:
- Training and tools to help entrepreneurs start and develop energy businesses
- Enterprise start-up support in areas such as business planning, structuring and financing
- Seed capital for early stage enterprise development
- Partnerships with banks and NGOs involved in rural energy development
Tanzania is the East African country involved in this project. Other countries involved include
Botswana, Senegal, Mali, Ghana, Zambia.

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Project Description (maximum 5 pages)
9. Project rationale and objectives:
In rural Africa, there is demonstrable, quantifiable demand for the electrical services that solar PV
can provide. Where household energy demand is low and homesteads are not located close
together (i.e. where rural electrification is not practical), PV is often a cost effective way to provide
power for lighting and amenities. The most sustainable and viable method of delivering solar PV
products and services to rural markets is through the private sector. However, in Africa
connecting the market demand (middle and high-income rural people) with product supply
(usually companies in cities) requires a sustained effort that addresses (and sometimes creates)
all links of the commercial supply chain. The private sector will not develop existing demand on
its own, without strategic assistance.
Energy for Sustainable Development, Africa proposes to use proven, commercial practices to
help develop the PV supply sector through a sustained program that combines investment (on the
side of TREDF and other finance groups) and market stimulation in rural areas. The project will
overcome the major incremental barrier faced by companies, which is a lack of finance to invest
in market building.
In all 5 of the countries involved in this project, Government bodies have recognized solar
electricity as a useful technology for rural electrification. In fact, Kenya, Uganda, and Eritrea
already have significant experience with rural PV, while Ethiopia and Tanzania are presently
developing large-scale projects. However, the private sector for PV in the latter 4 countries is still
relatively undeveloped.
This project will show how properly developed linkages between companies and communities can
result in self-perpetuating markets for solar technology. Replacing kerosene and petroleumfueled grid expansion with PV can displace significant amounts of CO 2 emissions and provide a
clean development future.
The purpose of this project is to improve the commercial delivery of PV systems to rural areas by
facilitating links between international suppliers, regional importers and manufacturers, local
dealers and local equipment markets. The strategy of the project is to create commercial
delivery corridors for solar equipment between capital cities and high potential rural markets in
each of the countries. The project will demonstrate how, once various parts of the delivery
infrastructure are in place, PV solar home systems can be traded on a non-subsidized
sustainable basis. The project will exchange experiences between countries in East Africa,
encouraging all stakeholders but particularly companies and policy makers to take up bestpractice positions.
The overall objective of this project is to stimulate increased rural sales of PV by increasing
consumer awareness and by sharing experiences between commercial markets and projects in
region. Specific objectives are to:
1) To create awareness and to put in place the required technical capacity to market, design,
install, maintain PV systems for small needs in one rural district of each country. To assist to
develop market linkages between the major commercial center (Addis, Asmara, Dar,
Kampala) and a selected rural district. The project will create a sustainable commercial
corridor of PV supply between importers, dealers and rural consumers in a high potential
district. If there is an interested micro-finance group, the project will also attempt to catalyze
microfinance in each of the countries. This awareness raising and promotion will assist
stakeholders to further develop the market in other localities.
2) To raise awareness among policymakers and development partners about the role for PV as
a part of rural electrification in all countries, and to share policy experiences between the
countries
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3) To build linkages between East African country PV sector stakeholders, including companies,
dealers, NGOs, rural energy projects and international companies. To assist commercial
companies to develop viable PV businesses in each of the countries, to share successful
models, and to enhance trade and information links between neighboring countries
4) To encourage international PV companies to participate in the development of the business in
East Africa by building awareness of potential markets and by linking them with local
stakeholders
5) To identify and assist companies that are eligible for TREDF finance. To stimulate interest of
local finance players in supporting PV projects.
Current Situation
The 5 proposed countries have a combined population of over 150 million people, or 30 million
families. Over three-quarters of the regions population are rural-based, and, of these 23 million
rural-based families, more than 20 million have no access to electricity at all. For their lighting,
communication and entertainment needs, they rely on kerosene, dry cells and centrally recharged
lead-acid batteries, which provide poor service at high costs. Furthermore, there are high local
and national environmental costs associated with these fuels.
For household needs, solar electricity is a viable and cost effective alternative to kerosene, dry
cells and lead acid batteries. There has been much successful experience with solar electric
systems for lighting, communication, health care and water pumping in the region. Given the
huge un-electrified market in the region, PV should be able to supply a significant portion of the
un-electrified population with entry-level electric power.
The worldwide solar industry has grown from less than 10 MWp production per year in the early
1980s to close to 400 MWp production per year in 2001. Over the past 5 years, equipment
prices have been steadily dropping and the industry has been growing at a rate that is over 20%
per year. However, more and more of the production is moving to large-scale grid connected
systems in the North (i.e. Germany, Japan). Despite the obvious potential for PV to supply the 2
billion rural people in the world with basic electric services, the industry is increasingly serving
Northern demand because it is easier to sell modules in the north than in the south. While
subsidized programs in the North help build demand there, there is a corresponding need to
assist industry to build demand in the south.
Market surveys verify that there is a viable demand for solar electric products and appliances in
the East African region. Surveys have been conducted by UNDP/ESMAP (Uganda, Kenya), Shell
Foundation (Uganda, Kenya, Ethiopia) and the Inter-Governmental Authority on Development
(Ethiopia, Eritrea). This demand is fueled by a rural middle class which owns (or aspires to
owning) various amenities (radios, lamps, TVs, stereo systems, etc.). In the proposed countries,
this economically active group makes up between 5 and 25% of the rural population. In many
cases, this group is willing to outright purchase a PV system.
However, significant commercial development of the potential PV market in the region has only
occurred in Kenya, and to a lesser degree Uganda. In the other countries addressed by this
proposal, commercial development of the market has not occurred. This project will address the
primary barrier to development of the PV market, which is a poor awareness among suppliers
and consumers, and poor supply linkages for the technology. Other barriers (see below) will be
systematically addressed in the project activities.
Lack of finance is often cited as the major barrier to development of PV markets --- but this is only
part of the picture. Development of PV markets has as much to do with local private sector
interest in the technology, availability of equipment (such as modules and batteries and DC
appliances) and market awareness as it does with consumer incomes. Without a private sector
infrastructure supplying the pieces, a market will not develop. Equipment needs to be delivered
from cities to remote customers. This requires a whole network of players including importers,
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distributors, assemblers, technicians and marketing agents none of whom will invest if they
dont understand the technology and the potential demand. The required pieces are only in place
in a handful of countries. In some countries, awareness among sellers and among rural
consumers is low or non-existent. In other countries, such as Eritrea, there is a great deal of
experience with PV, but it is all in the hands of a Government agency, and it is only used to
deliver PV for applications that donors are willing to pay for.
The view of the proposers is that the chief barrier to the development of the industry is the lack of
commercial infrastructure for sales and delivery of PV equipment. Existing sales of radios,
pressure lamps, cassette players, bicycles, lead-acid batteries and other amenities in the region
indicates clearly that there is ample demand for the power that solar can provide. The key is
mobilizing companies to supply PV equipment in packages that are appropriately sized and
priced for rural customers. There must be clear channels for dissemination of information and
equipment from importer to dealer to consumer.
Without a competitive industry to market, sell, deliver and provide after-service for PV systems,
prices for equipment will remain high, and services provided will be minimal. In Kenya, small
household PV systems and lanterns range in costs from under $100 for a one light and radio
system to $1500 for a large system which can power a video/TV unit and light 6 rooms. In the
other countries covered in the project, low-cost systems are either much more expensive or
simply unavailable. For example, in Uganda and Tanzania, PV module prices are as much as
two times the price of equivalent prices in Kenya where they are available, and there is little
equipment available outside of the large cities. In Ethiopia and Eritrea, PV prices are extremely
high, and there are virtually no distribution networks outside of the capital.
The high cost barrier has as much to do with lack of competition and limited selection as it does
with low incomes. For example, for middle class consumers who cannot afford large PV systems,
modules are available throughout Kenya for $50 or less (14 Wp). The same modules are not
available at all in Ethiopia and Eritrea, and they sell for $75 or more in Uganda and Tanzania.
The project has targeted selling PV systems to the top quarter of rural income earners. This
group of people is present in each of the selected target districts (this is why the criteria for
choosing districts included income) and the project has evidence that there are sustainable PV
markets in this group in each of the chosen districts.
Without a sustained effort to support PV companies to build their commercial markets, the PV
sector will remain donor dependant (as it largely is in Tanzania, Ethiopia and Eritrea now), and
focus only on systems that donors can pay for. Further, rural people will not become aware of PV,
and banks and businesses that serve rural areas will not go into the business. Figure 1 shows
the supply chain as currently in place, and the actions required at various levels to stimulate it.
By focusing on the commercial aspects of small PV system supply, this project will build a
competitive approach to the PV market. Once companies recognize that market-building
approaches work, they will apply approaches learned in this project to other regions, and, at the
same time, they will be better equipped to work with the large-scale PV projects being developed
now.
Using the supply chain approach, the project will seek to help develop finance mechanisms that
fit the needs of the suppliers and customers in the rural areas. Recognizing that a small project
like this does not have the resources to develop full-scale finance mechanisms directly, it will
address the problem through experience sharing and catalyzing pilot finance efforts where there
is interest from finance stakeholders. The project will work closely with national suppliers,
dealers, local finance organizations and finance partner TREDF to explore various finance
methodologies that could be used to reduce costs to rural consumers.

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During finance workshops and business development meetings the project will explore methods
that have been used successfully in the region and elsewhere to lower prices for consumers.
Practical ideas that the project will explore include:
Selling systems by component to reduce up-front charges (i.e. working with battery charging
ESCOs)
Lay-away plans
Hire purchase (this is the most common method of PV financing in Kenya)
Credit through finance institution (i.e. MFIs, SACCOs, rural banks)
Supplier-agent credit schemes (i.e. methods of helping dealers gain credit)
Fee-for-service possibilities
Quality control will be an important aspect of the project. In order to receive support from the
project, companies will be required to provide a minimum level of after-service and warranties on
products sold. All of the systems sold as part of the project promotion will be covered by clear
customer protection agreements. Note that TREDF normally only works with companies that are
willing to provide customers in suitable warranties and after-service.
Figure 1: The PV Product Supply Chain

Appropriate
Products

Financing

Product
Supplier

Awareness
Raising

Sales
Training

Importers/
Assemblers
Distributors

Linkages
Policy

Agents

Customers

Market
Study

Installation
Training

Price Reduction
Quality Control

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Expected Project Outcomes


In all of the countries to be involved in the project, there is already an active private sector that
provides household goods, agricultural inputs, hardware items amenities and clothes to the rural
areas. In general, they are effective at doing this, and they consider themselves to be agents of
positive rural change. This project will actively seek to mobilize the rural-targeted private sector
to get involved with PV SHS.
The project will actively address the barriers identified that have been identified as obstacles to
the development of PV industries, namely:
Poor commercial infrastructure
Low awareness among all stakeholders
High prices and lack of financing for systems.
Poor policy environment
At the end of the project, an operational commercial delivery route will be in place between the
capital city and one rural district of each country. This will include:
several national importers in each country,
several dealers in the target district,
at least ten technicians and sales agents in the target district,
interested community development NGOs
interested micro-finance groups and
hundreds of potential PV customers
The primary interest of the project is creating sustainable regionally based business entities that
work with nationally (or capital-city) based companies. It is likely that many of these businesses
will be previously existing businesses that are interested in expanding into PV, such as
electronics shops, hire purchase shops, consumer goods shops, hardware stores, or battery
charging stations. These entities will operate as cash-sales outlets or as Energy Service
Companies depending on the prevailing economic climate and their own beliefs in what is
possible. The project will help companies to evaluate potential models that they would like to put
in place.
The project will interact with these groups in a number of ways. First, in the initial field surveys, it
will hold regional meetings to introduce the idea of solar PV to groups that are potentially
interested in selling the product. Secondly, it will introduce them to suppliers from the major
urban centers (or internationally if they are able to import), it will provide them with advice on
products and services that could be offered, and help them to forge links with suppliers. Thirdly, it
will help them critically examine sales opportunities and to devise appropriate business plans to
enter the market. Fourthly, it will provide technical and sales training to companies through the
training activities. Fifth, it will encourage the businesses to participate in the various international
forums and field visits that the project will be sponsoring (though it can not cover the costs for all
businesses to attend all of the meetings). Finally, the project will facilitate links between TREDF
and companies that are eligible for TREDF support.
As well, there will be educated PV businesses in cities of each countries, actively seeking to build
commercial rural markets. There will be a network of influential policy makers --- who are aware
of the necessity of including PV in rural electrification plans and will actively lobby for such plans.
There will be increased participation by international PV companies in the PV markets of Uganda,
Tanzania, Eritrea and Ethiopia.

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As a direct result of project activities, installation of more than 750 PV solar home systems in the
targeted districts, and a measurable growth in the rural PV sales in Uganda, Tanzania, Eritrea
and Ethiopia. Five years after the project, we expect that 3000 systems will have been installed
in the 5 districts.
The exit strategy of the project is to hand over follow-up work to the private sector and the
numerous longer-term PV projects and initiatives in the region. To ensure that these links are
maintained, a Regional PV Development Committee will be set up at the commencement of the
project (its terms of reference to be developed by the project). This committee will include key
representatives from the private sector, UNEP GEF project, the Uganda ERT World Bank GEF
PV project, the Tanzania UNDP GEF project, the Tanzania Sida PV project, IFC, AREED, the
Ethiopia GEF PV project, the Triodos Renewable Energy Development Fund. Meetings will be
held during project activities and self-financed by members. The Solarnet magazine will assist in
the dissemination of information from the above group.
The project will reduce carbon emissions from kerosene lanterns in 5 districts. From systems
installed within the project timeframe, a relatively small amount of reductions would be
experienced (i.e. <300 tonnes/year per district). However, there are two points that need to be
considered: a) if each of the PV sectors continues to grow sustainably, within 5 years the 5
target districts would have a combined cumulative CO2 displacement of almost 3000 tonnes from
3500 installed systems. b) If the companies applied the methods learned to other districts, we
would expect the CO2 displacement to be 5-10 times that experienced in the target districts.
Ethiopia would be likely to surpass Kenyas present level of 15,000 tonnes/year displaced due to
PV systems
This is an awareness raising, promotional and experience-sharing project. A major assumption of
the project is that the private sector is best equipped to develop rural markets. Furthermore, the
type of assistance required by the private sector to do this job is eye-opening assistance,
linkages with companies, financiers and investors, and assistance to develop reach into rural
markets. Businesses will have most respect for --- and be most likely to imitate --- other
successful businesses experiences in the region; hence the focus of this project on business-tobusiness sharing.
A second major assumption of this proposal is that there is a viable market for PV SHS in high
potential rural areas, namely in Rakai and Kalangala (Uganda), Iringa (Tanzania), Mendifera
(Eritrea) and Jimma (Ethiopia) (these districts were selected by stakeholders during the PDF A
stakeholders meetings). The project will work with the private sector to develop real markets in
each of these new markets. The lessons they learn while addressing these markets can then
be applied elsewhere. An earlier IGAD project he pilot work in Awasso (southern region) has
resulted in the commercial sales of scores of systems, and results indicate that there is
considerable repressed demand for PV among households in the country.
Presently, 150,000 SHS are already in place in Kenya averaging 20 Wp which means that
present GHG substitution is already well above 15000 tonnes/ CO 2 per year. If the 5 other
countries could match Kenyas PV success, a much more significant CO 2 emissions reduction
target could be achieved. In addition, PV electric lights create a considerably cleaner indoor
atmosphere for study and reading than smoky kerosene lamps. This project targets an emissions
reduction of 3000 tonnes over a 5-year period in the 5 target districts. However, the marketbuilding aspects of the project, and its partnership with other programs, should result in a net
emissions reduction that is 5-10 times the figure for the target districts.
PV systems for rural electrification have a relatively low CO 2 reduction per system, and would
seem to be a poor candidate for GEF funding. However, CO 2 displacement per kWh rate is much
higher (as much as 10 times) for off grid PV than grid-connected PV because off-grid PV directly
displaces kerosene use. For example, "a 40 Wp module connected to electric grid in US would
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displace 40 kgs CO2 /year while a 40 Wp module connected to a Kenyan household would
displace 350 kgs from inefficient lighting"3. This high incremental decrease in CO2 output,
combined with high incremental increase in living standard make solar home system an attractive
technology for GEF funding.
Reduced GHG emissions from PV systems would come from:
1) Substitution of electric lights for kerosene lamps. If average kerosene use in Kenya is 515 l/mo. per family, emissions reduction per system would be on the order of 130 - 400 kgs
CO2 4. Higher income families tend to burn far more kerosene than low-income families; this
means that serving higher income groups with solar home systems has a proportionally
higher GHG use reduction potential.
2) Reduction of GHG emissions from battery charging. This would be on the order of 15-30
kgs CO2/year for 50-100 Ah battery for grid based recharging 5
Note that electrification with PV has a high value for avoided emissions compared to grid
extension. Usually, households would prefer grid electricity because of the versatility of highvoltage grid power. However, because of the high costs associated with extending lines and
distribution networks to rural communities, most rural communities cannot be reached with
subsidized grid-based rural electrification.
Project Implementation Plan and Costs
The project will be executed over 2 years and will involve a series of closely co-ordinated
activities in Uganda, Tanzania, Eritrea, Ethiopia and Kenya. The activities will seek to provide an
arena where private companies (local and international), the public sector and major PV
projects can interact and gain from each others experience and linkages. The project will actively
promote positive synergies between all players.

Activity A: Project Management


Project management is described in section 9 above. Its costs are as follows:
TOTAL COST:
$339,740
GEF Contribution:
$334.740
TREDF Contribution:
$0
Company Contribution $0
Activity B: PV SHS Trade Fair and Project Kick Off Meeting
A meeting will be held in Nairobi at UNEP to examine progress and prospects for PV in rural
electrification in East and Southern Africa, focusing especially on commercial successes.
Approaches used to develop rural PV markets in Africa and elsewhere will be explored. This
kick-off meeting will include regional and international stakeholders and will address the state of
art in PV technology, financing programs, promotion methods and policy. Representatives of
major regional PV projects will be encouraged to attend the meeting. The meeting will
incorporate a PV SHS trade fair and a planning meeting for the project.
TOTAL COST:
GEF Contribution:
TREDF Contribution:
Company Contribution
3

$36,800
$11,000
$17,000
$8,800

"Rural Electrification with Solar Energy as a Climate Protection Strategy", REPP.


1 liter of kerosene: 2.45 kgs CO2, assume 90% displacement?
5
REPP
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Activity C: Market Survey in Target Regions of each Country.
The first step in building capacity and awareness in each district level, the project will be to make
a full assessment of consumer markets, dealers, technicians, financiers and other players that
might be interested in participating in the PV market. This survey will consist of a series of
activities in each target district which involve project stakeholders. The information gathered in
this activity will be made available to stakeholders in the project and will form the basis of future
work in each district.
During Activity C, private sector players in target districts will be contacted and involved as
stakeholders in the project. A list of potential companies in the target region will be a clear
outcome of Activity C. Criteria for selection of private sector will be finalized during Activity C.
Criteria will include: a) active in sales of related equipment (i.e. TVs, electronic appliances,
batteries, consumer goods), b) demonstrated interest in the project and participation in the market
study, c) demonstrated capacity to buy PV equipment and support project, d) wide network of
consumers, respect among community, e) willingness to abide by national or local PV standards,
f) strong links to finance organizations.
TOTAL COST:
$11,880
GEF Contribution
$7,740
TREDF Contribution:
$0
Company Contribution:
$4140
Activity D: Business Opportunity Awareness Raising and Planning Assistance
The over-riding purpose of this portion of the project is to develop the business capacity of
companies to deliver PV systems to the respective markets. Triodos Renewable Energy for
Development Fund (pending board approval) will make investments in selected companies,
provided there is a viable market, and the partner companies have the capacity to grow. This
activity will raise awareness among companies about the potential for PV SHS business,
particularly concentrating on opportunities for development of markets in each of the target
districts. It will work with companies to help them assess how they can enter the PV market (or
diversify existing product lines) using the data from the completed market survey. It will seek to
build linkages and provide sets of resources that companies can use independently.
TOTAL COST:
$462,640
GEF Contribution: $0
TREDF Contribution: $462640
Company Contribution: $0
Activity E: Technician and Sales Training
In order for PV to be taken up by companies in the target district, a minimum level of technical
and sales capacity must be developed. Central training of trainers for solar home system
installation and PV sales, attended by representatives from interested companies, will take place
in one country. Following this, each country will organize and hold their own training courses with
support from the project.
TOTAL COST:
$81,440
GEF Contribution:
$75,000
TREDF Contribution:
$0
Company Contribution: $6440
Activity F: Country PV Trade Fair & Awareness Seminars
Over the course of the project, two international events will be held (in addition to the first
meeting) to help regional companies refine their product offerings. These will be staged in the
middle (in Uganda) and last trimester of the project (Tanzania). They will focus on specific
aspects of PV technology applicable to this region. They will continue the projects objective of
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bringing together international companies and local companies, fostering better understanding of
local markets (and projects), linkages and investment opportunities.
TOTAL COST:
$46,300
GEF Contribution:
$22,800
TREDF Contribution:
$22,500
Company Contribution: $1,000
Activity G: Inter-Country Exchange Visits, Information Exchange & International Visits
PV entrepreneurs and key stakeholders from Uganda, Tanzania, Eritrea, Kenya and Ethiopia will
be invited on several day study visits to learn how successful solar home system markets
developed and how they presently operate. During these visits they will be encouraged to
develop trade linkages. Visits will be within the region and also to countries with successful PV
development (Sri Lanka, Indonesia). These visits will also focus on successful finance
experiences in the various countries visited.
TOTAL COST:
GEF Contribution
TREDF Contribution
Company Contribution

$58850
$53,850
$0
$5,000

Activity H: Region-Based Awareness Raising and Promotional Campaigns


Through the duration of the project, a series of promotional activities will be held in each country
target district to introduce and demonstrate PV SHS technology, and provide an opportunity for
villagers to see, understand and purchase solar home systems. At the same time larger
community or income generating systems will be installed to raise awareness. Companies and
technicians (identified and trained through the project) will be fully involved in this campaign.
During the market survey activities in each target region, the project team will contact and
appraise finance organizations (including hire purchase agents, micro-finance organizations,
commercial banks and NGOs focusing on finance) .about the project. Throughout the project,
these groups will be actively encouraged to become involved in the financing of PV solar home
systems or PV company support. Further, the project will help develop linkages between local
finance organizations and national organizations that are interested in providing and developing
PV finance.
The project will encourage co-operating companies and beneficiary companies to adhere to a
policy of Truth in Advertising. Recognizing that the GEF has experienced problems when
consumers were poorly informed about the actual possibilities of PV, the project field workers will
spell out clearly what the limitations of PV are in its education activities, and will encourage
companies to do the same.
TOTAL COST:
$268320
GEF Contribution:
$203,520
TREDF Contribution:
$0
Company Contribution: $64,800
Activity I: Policy Workshops
Each East African Government has a different rural electrification strategy, as well as different
approaches to PV duties (or subsidies), standards, and capacity-building. This project will bring
together players working on PV within Governments and projects to discuss the current status of
PV technology and their Governments policy with regard to the technology. The long-term
outcome of this activity will be harmonized policy in the region, and better intra-country
understanding of how rural electrification strategies.
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TOTAL COST:
$9950
GEF Contribution: $9950
TREDF Contribution:
0
Company Contribution -0Activity J: Finance Workshops
The purpose of these workshops will be sharing of country experiences in PV and SHS finance.
These workshop will attempt to catalyze links between finance players in each country and in the
target districts. Through information sharing and this type of networking, the project will develop
linkages between larger financing players --- including Triodos Renewable Energy Development
Fund/PVMTI and regional financiers (i.e. country-based finance organizations) and local players
(i.e. Savings and Credit Associations, consumer credit groups, dealers, etc).
TOTAL COST:
$9950
GEF Contribution
0
TREDF Contribution
$9950
Company Contribution 0
Activity K: Monitoring and Evaluation (Not included in master budget)
See below for an explanation of the monitoring program.
TOTAL COST:
$20,350
GEF Contribution $20,350
TREDF Contribution
0
Company Contribution 0

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Post-Project PV Business Sustainability and Risk Assessment
This project aims to create and expand viable PV businesses and regional agencies in 5
countries. The premise of the project is that there is an existing un-exploited market in many rural
areas; the activities that the project undertakes will enable the viable markets to be developed.
The project is concentrating on private sector companies to be the primary vehicles of the work
carried out. After the 2-year project period is over, it is expected that, having accomplished key
objectives, the work of disseminating PV will have been handed over to the private sector. The
private sector will take over marketing of equipment on a long-term basis. There are several
levels at which this is expected to occur.

National level: Companies will have a better idea of how to assess and develop rural
markets --- in short, how to plan and carry out a business plan for PV SHS sales in rural
areas. They will have a core of trained sales and installation crews that can operate in
rural district. Based on their experiences in this project, they will be able to manage
promotion and sales programs in new regions.

Target district level: At the target district level, consumers, traders, sales agents and
technicians will have been alerted about the potential for using and selling PV SHS.
Consumer demand will have been initiated through active promotion. Trading will have
been initiated through the supply chain driving efforts of the project.

International level. International PV and balance of systems suppliers will see East Africa as
a key SHS market. Rather than looking at the region as individual countries (or projects)
marketing agents will have plans to develop the entire region.

There are a number of issues and risks that need to considered. First, of all, there are a variety
of risks that affect trade in the region --- such as armed conflict, drought, political instability, etc.
There is little this project can do to avoid these when they come up.
Future management costs of the PV sector will be entirely taken over by the private sector.
However, by the time this project is over, it is likely that a number of initiatives will be underway in
the region (ERT WB GEF Uganda and Tanzania, Energy Access Project WB GEF Ethiopia, etc)
and these projects are likely to continue providing stimulation to the SHS sector through smart
subsidies that will be phased out.
Another issue is capacity building. Consumers and installers of solar PV systems need minimum
levels of knowledge and technical expertise to maintain and install systems. The capacitybuilding work to be executed under this project will be limited, and cannot meet all of the
demands. However, by transferring training capacity (through ToT activities) to companies and
stakeholder bodies, a start will be made, on which further growth can be built.
An additional risk is that companies may not be able to grow to the point that they become
sustainable by the end of the project period. There are two ways the project seeks to get
around this. First, the project will actively shortlist and work with companies which are most likely
to succeed (such as retail outlets that are already involved in other related products and
services). Secondly, TREDF will carefully pre-select companies that have the necessary preconditions for being successful businesses, and sustain them by engaging them over a long
period.
A final concern is that quality of PV systems may degrade after the project is over due to
company desire to make sales and beat the competition. This is a legitimate concern. In Kenya,
PV system quality is a serious issue and in the market there are both cowboys who sell substandard equipment without regard for how consumers, as well as companies committed to
quality. In the end, customers make the choice between quality and price; the more consumers
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Energy for Sustainable Development, Africa


are informed, the more likely they are to make an informed choice. The objective of this project is
to (1) educate consumers in the target districts about PV system quality and (2) to work with the
suppliers that are committed to supplying quality systems. The project will encourage companies
to follow PV codes of practice where they have been established.
Stakeholder Involvement
During the PDF A formulation of the project stakeholder workshops were held in Kenya, Tanzania,
Uganda, Ethiopia and Eritrea to discuss the project and how different stakeholders would be
involved. Workshops included participants from the private sector (city PV companies, BOS
suppliers, agents), Government, non-government organizations involved with energy (these
would include consumer interest groups), GEF focal points (or their representative) interested
consultants, finance organizations and community organizations.
In each meeting the following activities took place (see summary notes in Annex 5,6 and 7):
Consensus was reached upon the major barriers to PV in the country and suggest
methodologies for overcoming them
How the project would be designed, its expected outcomes, objectives and activities,
Agreement was reached on priority concerns and expectations and the stakeholder
participation plan.
Target rural regions in which the project would be active were selected.
The stakeholders meetings identified similar barriers to PV industry growth. In Uganda and
Eritrea high prices and lack of financing facilities were seen to be the highest barrier, while in
Ethiopia and Tanzania other barriers ranked more highly (awareness, policy, commercial
infrastructure). Virtually all involved in the meetings agreed with the proposed approach of the
project.
Target regions were selected during the meetings based on regular incomes, high population
density, accessibility of district for businesses, low grid expansion rate, and demand for radio, TV
and light. In Uganda and Tanzania, stakeholders decided to choose districts that did not always
have receive projects (i.e. Arusha was seen as a choice with good potential, but too many
projects were done there so the project chose Iringa).
During the meetings and subsequent consultations, inputs were sought in the design of the
project in overcoming demand barriers, infrastructure barriers, product and service barriers.
During breakout sessions in these meetings (and later one-on-one meetings with companies),
practical ideas were solicited on how to best develop rural markets (see notes). These ideas
were used to develop the range of activities proposed, and, for each country, specific ideas will be
taken up when the project is executed.
The project will be managed by Energy for Sustainable Development, Africa, Ltd. from Nairobi
Kenya. Local consultants will manage activities in each of the participating countries. The central
secretariat of the project will be with Energy for Sustainable Development, Africa while each
country will have a secretariat (under the local consultant). These two offices will keep all project
stakeholders updated and involved with the project. For example, results of the market studies
will be provided to all interested stakeholders.

INCREMENTAL COST ASSESSMENT


To varying degrees, the Governments of Kenya, Uganda, Tanzania, Ethiopia and Eritrea have all
drafted rural electrification plans and are in the process of implementing them. All of the countries
are moving towards private-sector led rural electrification strategies that include use of
renewables and specifically PV technology where grid is not practical. Uganda, in particular, has
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Energy for Sustainable Development, Africa


re-oriented its plan to include renewable energy and PV in its strategy under the World Bankfunded Energy for Rural Transformation program. Tanzania (with WB ERT) and Ethiopia (with the
WB-assisted Energy Access Program) are also reviewing their rural electrification initiatives to
include PV, micro-hydro and other renewable energy sources. Kenya, which has not had World
Bank investment in its Rural Electrification sector for over a decade, has one of the most active
commercial PV SHS markets in the world.
However, PV sector activities in the above countries are occurring in relative isolation and
markets function independently of each other. Although Kenya does participate in the Uganda
and Tanzania markets, little information is exchanged across the borders. Neither projects nor
private sector companies are sharing information across borders.

Baseline Scenario
If things continue according to the existing situation, the PV and SHS markets in each of the
target countries will continue to grow slowly. Expansion of sales to rural areas will not take place
very quickly, as there is little connection between urban and isolated rural markets, and little
incentive to develop them.
Given the present small size of the markets (40-70 kWp/year) the business as usual baseline
would expect modest growth in the markets, though much of this growth would be in the
traditional donor-oriented market. As shown in the table below, growth in markets is likely to
continue to be little more than 5% per year.
Further, even the growth benefits that might be expected from major World Bank initiatives (such
as Energy for Rural Transformation) would be slower to accumulate because of the delays in
getting companies up to speed.
Table 1: Baseline Development of Market:
Country

Kenya
Uganda
Tanzania
Ethiopia
Eritrea

Present

500
70
40
50
40

2003

2004

2005

74
42
53
42

77
44
55
44

81
46
58
46

Estimated Sales (kWp/year)


2006
2007
2008
2009

85
49
61
49

89
51
64
51

94
54
67
54

98
56
70
56

2010

103
59
74
59

2011 Total Value of


PV Systems @
$10/Wp (000's/
$)

109
62
78
62

8105
4631
5789
4631

In the baseline case, it is estimated that the PV markets in the 4 target countries would be worth
approximately $23 million over the next ten years.
The GEF Alternative
With the GEF project, the private sectors in the countries would see the commercial potential of
the rural PV market and would quickly develop capacity to exploit that market. Given their
experience in the initial target regions, they would apply these lessons to other regions and build
their sales networks. Further, international companies would be more engaged with the region
because of linkages created by the project.
The cross-fertilization benefits of free and faster flow of information within the region would result
in more competition and lowered prices. Markets would grow faster because businesses will be
in a better position to deliver products. Consumers and dealers at the regional and district levels
will be better educated and have more capacity to choose and deliver products.
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As shown in the tables below, a doubling and tripling of the PV sales growth rate catalyzed by this
project would result in significantly larger market sizes over the next 10 years. An aggressive
program to work with the private sector could result in the total accumulated PV sales being
between $30 to $39 million. This is $7 to $16 million dollars more than the baseline case, a
number of times the GEF investment in this project.
Table 2: Accelerated Case 1
ACCELERATED CASE I (10% growth/year)
Country
Estimated
2003 2004 2005
Present Sales
(kWp/year)

2006

2007

2008

2009

2010

93
53
67
53

102
59
73
59

113
64
81
64

124
71
89
71

136
78
97
78

150
86
107
86

Table 3: Accelerated Case 2


ACCELERATED CASE II (15% growth/year)
Country
Estimated
2003 2004 2005
Present Sales
(kWp/year)

2006

2007

2008

2009

2010

122
70
87
70

141
80
101
80

162
93
116
93

186
106
133
106

214
122
153
122

Kenya
Uganda
Tanzania
Ethiopia
Eritrea

Kenya
Uganda
Tanzania
Ethiopia
Eritrea

500
70
40
50
40

500
70
40
50
40

77
44
55
44

81
46
58
46

85
48
61
48

93
53
66
53

106
61
76
61

2011 Total Value of


PV Systems
@ $10/Wp
(000's/$)

165
94
118
94

10456
5975
7469
5975

2011 Total Value of


PV Systems
@ $10/Wp
(000's/$)

246
141
176
141

13513
7721
9652
7721

Although predicting exact numbers is a fuzzy process, it can be shown that similar catalyzing
activities in Kenya during the late 1980s and early 90s did cause Kenyas PV market to grow
rapidly. Between 1994 and 1999, commercial PV sales in Kenya increased by an average of
25% per year, and even in 2001 they are likely to have increased by 15% over the previous year.
Further, the project will leave companies in each country in a better position to work with
proposed World Bank or other GEF initiatives. Groundwork completed under this project will help
organize the industries in each country, mobilizing the interest of BOS, appliance companies,
local battery manufacturers and consumers. It will also prepare a group of companies to be
capitalized (possibly by SDC), enabling them to make faster returns on a large project.
Table 4 calculates the incremental costs of the project.

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Commercial Dissemination Networks for Household PV Systems
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Table 4: Incremental Cost Matrix


Project Activity
Baseline
Regional
Promotion Nationally based companies unaware
Activities and Information of wide selection of PV technologies
available.
Companies unaware of
Exchange
Project KO Meeting (Act B)

Country PV Trade Fair


Awareness Seminars (Act F)

&

Inter-Country Visits & Information


Exchange (Act G)
Finance Workshops (Act J)
Policy Workshops (Act I)

successful experiences with PV in


neighboring countries and worldwide.
International PV companies unaware of
local companies in Eritrea, Uganda,
Tanzania, Ethiopia.
International and local PV companies
do not understand PV markets or the
various GEF and bilateral PV programs
underway in the region
Local
companies
and
finance
organizations unaware of successful
finance experiences in the region and
worldwide.
Decision-makers from key Ministries
not fully sensitized to the role that PV
can play in rural electrification
programs.

Cost: US$ 0

Alternative

Increment

Organize trade fairs that are attended


by international PV companies, local
PV companies and major projects in
the region.
During meeting,
encourage companies to exchange
experiences with companies from the
region. Companies assist to link with
suppliers and sources of service and
equipment.

Better awareness of products


among local companies.

Organize study tours for companies,


decision-makers and finance groups to
countries that have successfully
implemented PV-based off-grid rural
electrification programs.
Organize finance workshops to
discuss finance experiences and
opportunities among companies and
finance agencies that are interested in
rural energy.
Organize policy workshops for key
Ministries to discuss the role of PV in
regional rural electrification projects, to
discuss regional project activities, and
methods to harmonize policy and
standards.
TOTAL COST:
GEF Contribution:
TREDF Contribution:
$49450
Company Contribution

$161850
$97600
$14800

Improved
linkages
between
international
suppliers
and
regional dealers.
Better
knowledge
among
companies about the role of PV in
rural electrification and about the
possibilities of PV and BOS as
profitable products.
Increased
knowledge
among
finance agencies and companies
of finance methodologies for PV in
rural areas
Better awareness among policy
makers of what is happening with
PV-based rural electrification in the
region.
A
shift
toward
harmonization in PV standards
and policy among East African
countries.

Incremental cost: US$ 161,850

Energy for Sustainable Development, Africa

Target District-Based Market Consumers in target districts (Iringa,


Kalangala, Rakai, Mendifera & Jimma)
Activities
Market Assessment in Target District
(Act C)
Awareness Raising Campaigns (H)

are not fully aware of the potential of


utilizing PV, as an alternative to
kerosene, to obtain safe and efficient
lighting/electricity services in off-grid
situations. Demand for PV develops
slowly.
The private sector will not seek to
develop
regional
agents,
sales
networks or technician support staff.
Kerosene and dry cells will continue to
be viewed as the only potential source
of lighting and power of off-grid
consumers in rural areas.

Conduct market assessments with the


private sector in the target districts to
identify the real cash and finance
market. Disseminate the results of
these market surveys with urban and
target-district based companies.
Raise awareness of vendors and sales
agents of the potential and actual
demand for PV systems and
appliances.
Formulate outreach programme in
each target district utilising multi-media
(radio, plays, print, video); organise
general awareness campaigns in
conjunction with the private sector.

Increased awareness of the public


at large in the potential of PV to
meet their basic electricity needs.
Development of local private
sector interest in sales of PV and
PV appliances.
Links developed between national
and target district vendors.
Increased availability of PV in
regional outlets. Lowered prices
to consumers.
Confidence among consumers
and PV sellers in the ability of PV
to meet basic lighting and power
requirements.

Install PV systems in key sites where


market is likely to build.

Cost: US$ 0

Technical
Assistance (Act E)

Training Agents involved in supply of PV and

Training of Trainers, Technician and


Sales Training

TOTAL COST:
$280,200
GEF Contribution
$211260
TREDF Contribution:
$0
Company Contribution:
$68940

Marketing and sales capacity for PV


systems will remain at rudimentary
levels in target areas.

Training of trainers held developed for


basic technicians and sales people.
Technical
curriculum
teaches
vendors/technicians to properly size,
install, maintain and repair PV
systems. ToT held with attendees
from key private sector organizations
from each country.

Technical training does not take place

Technical training courses held for

battery systems in target areas will


continue to be unable to properly size,
install or maintain systems.

Incremental cost: US$ 280,200

Local vendors and technicians are


able to assist consumers in
properly sizing, installing,
maintaining and repairing PV
systems.
Sales people are able to more
effectively market systems
through coordinated campaigns
with national and international

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Energy for Sustainable Development, Africa

in the target areas.

participating sales people, vendors in


the target areas.

brands.

Cost: US$ 0

TOTAL COST:
$81,440
GEF Contribution:
$75,000
TREDF Contribution:
$0
Company Contribution: $6440

Incremental cost: US$ 81,440

TREDF invests an additional $400000


in client companies. They are
provided with opportunities to build
linkages upward (i.e. with
international companies), laterally (i.e.
with regional companies) and
downward (i.e. into rural market
areas) in ways that are presently not
being done.

Companies have greater


confidence in PV as a product.

Business
Planning TREDF invests as in its existing plan
Assistance and Loans (Act and covers the cost of its staff time.
D)
Business Planning Assistance

Urban companies do not interact with


others in the region or get an
international view of market
opportunities.
Urban companies do not have support
to develop linkages to rural markets.
Growth of sales does not penetrate
rural areas as fast.

Cost: US$ 62640 (existing costs)

Client companies are introduced to


successful financing methods, and
attempts are made to pilot viable
finance strategies with willing PV
companies, finance groups and
NGOs.

Companies gain experience


developing market chains into
high potential target areas
Companies have much greater
knowledge of products and
marketing techniques.
Companies develop their own
finance strategies based on
experiences outside their country.
Incremental cost: US$337360

TOTAL COST:
$400000
GEF Contribution: $0
TREDF Contribution: $400000
Company Contribution: $0

Local & Benefits

750 rural households will continue


using kerosene and open fires for their
lighting needs. Each household will
spend an average of US$ 120/year on
kerosene and dry cells. This will result
in emissions of green house gases into
the atmosphere as well as pollution

Consumers have opportunity to


purchase PV systems and
components due to project activities
in region (as described)

There will be decreases in the


number of people suffering from
respiratory and eye problems
related to poor indoor air quality.

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Energy for Sustainable Development, Africa

from particulate and discarded


batteries as mentioned in the text,
There will be slow and very limited
development and utilisation of PV
energy in the target regions.

Global
Benefits

Environmental

Project Management Costs

Emissions of green house gases into


the atmosphere

Low GHG emitting technology market


is accelerated

No project.

Project is managed and implemented.

Cost $0

TOTAL COST:
$334,740
GEF Contribution:
$334,740
TREDF Contribution:
$0
Company Contribution $0

Costs

Incremental costs $334,740

Total:

Total: US$ 62,640

US$ 718,600 (GEF)


US$ 449,450 (TREDF)
US$ 90,180
(Companies)
_____________
Total:
US$ 1,258,230

Over 260 tonnes of CO2 will be


avoided annually in the target
regions after 2 years. This is
likely to increase to 3000 tonnes
per year in the target regions if
the market grows as it has
elsewhere. There is likely to be
spill over effect in other regions of
the involved countries, resulting in
a much higher amount of CO2
being avoided.
Project successfully meets
objectives

Total: US$ 1,195,590

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IMPLEMENTATION PLAN
Energy for Sustainable Development, Africa will carry out the project in conjunction with selected
local consultants in each country. A project steering committee will be formed to guide the
project. It will include representatives of Triodos Renewable Energy Development Fund, country
representatives from the PV private sector, project management and Government officials.
Specifically, the committee will include:
ESDA/ESD project management (2 members)
Triodos Renewable Energy Development Fund appointed member (1 member)
GEF UNEP (if viable and useful)
3 representatives selected from the target country private sector (to be chosen at
commencement of project)
3 representatives from Government in the target countries and Kenya (to be chosen upon
commencement of project)
NB All countries will be represented in the combined membership.
The steering committee will receive quarterly reports of project progress and will be copied all
monitoring and evaluation outputs. A full-time manager based at ESDA in Nairobi will carry out
day-to-day project management. This manager will delegate work to consultants in each country.
Consultants in each country will be chosen based on competitive tender. The project will be
carried out over a 24-month period (see Implementation Schedule below).
Project activities will follow a logical sequence (see project descriptions).

The first activity will be an East African meeting on PV for rural electrification that will involve
the project team as well as companies, project, international suppliers and promotion agents.
This will be followed by market assessment and survey activities in the target districts of each
country. Essentially, the project will attempt to focus the private sector on developing
linkages to than market.
Simultaneously, the project will work with interested businesses to help them develop
business plans for the target region and the country as a whole. Triodos Renewable Energy
Development Fund will work closely with their pre-selected group of partner companies.
Subsequent activities, including technical training, international PV company visits, policy and
finance workshops will be held as shown below.
Inter-country visits and information exchange will be an ongoing-activity. Over the course of
the project, Solarnet Kenya will produce 8 issues Solarnet magazine which will focus on
each country, and on particular issues such as finance, policy, technology and local
manufacture.
Awareness-raising campaigns and promotion will be carried out in the target districts as an
ongoing activity.

Table 4: Project Implementation


Activity

Country

Project KO Meeting

Kenya

Market Assessment
in Target District
Business Planning
Assistance
Technician and Sales
Training

ALL

Year 1
J/F

ALL
ALL

M/A

M/J

J/A

Year 2
S/O

N/D

J/F

M/A

M/J

J/A

S/O

N/D

Energy for Sustainable Development, Africa

International PV
Company Visits
Inter-Country Visits &
Information
Exchange
Awareness Raising
Campaigns
Policy Workshops

Uganda,
Tanzania
Kenya, Sri
Lanka,

Finance Workshops

Tanzania

Demos

ALL

ALL
Uganda

Monitoring and
Evaluation

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Project Institutional Framework


As shown below, the project will be managed by ESDA. The project actors are as follows:
The ESDA project team will manage the project. The project director will ensure that activities
occur on time; the position will also link with TREDF and the project steering committee. The

Project Institutional Framework


TREDF
TREDF
Business
Business
Support Team
Support Team

Steering
Steering
Committee
Committee

ESDA Project
ESDA Project
Director
Director

ESDA Field
ESDA Field
Manager
Manager
Solarnet
Solarnet
Information
Information
Exchange
Exchange

Loans &
Business
Support

Uganda
Uganda
Agent
Agent

Uganda PV
Uganda PV
Companies
Companies

Business
Rural
Outreach

Uganda
Uganda
Stakeholders
Stakeholders
ERT
& UPPPRE
ERT & UPPPRE
NGOs
NGOs
Government
Government
Promotion
agents
Promotion
agents
Finance
groups
Finance groups

Rakai/
Rakai/
Kalangala
Kalangala
Target
Target
Region
Region

Technical
Technical
Team
Team

Ethiopia
Ethiopia
Agent
Agent

Ethiopia PV
Ethiopia PV
Companies
Companies

Ethiopia
Ethiopia
Stakeholders
Stakeholders
Energy
Access
Energy Access
Prog
Prog
NGOs
NGOs
Government
Government
Promotion
Agents
Promotion
Agents
Finance
groups
Finance groups

Jimma
Jimma
Target
Target
Region
Region

Eritrea
Eritrea
Agent
Agent

Eritrea PV
Eritrea PV
Companies
Companies

Tanzania
Tanzania
Agent
Agent

Tanzania PV
Tanzania PV
Companies
Companies

Eritrea
Eritrea
Stakeholders
Stakeholders
Projects
Projects
NGOs
NGOs
Government
Government
Promotion
Agents
Promotion
Agents
Finance
groups
Finance groups

Mendifera
Mendifera
Target
Target
Region
Region

Tanzania
Tanzania
Stakeholders
Stakeholders
UNDP
GEF
UNDP GEF
SIDA
SIDA
NGOs
NGOs
Government
Government
Promotion
Agents
Promotion
Agents
Finance
groups
Finance groups

Iringa
Iringa
Target
Target
Region
Region

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field manager will manage the day-to-day tasking of the local country agents, the technical team
and the Solarnet promotional team.
Triodos Renewable Energy for Development Fund will be involved in its core business support
and loan activities. It will provide business assistance as requested and work with companies as
described in its corporate mission. As can be seen in the diagram, the TREDF support will be
staged so that companies can use the project to gain access to the markets that are being
identified in the target regions. Companies will be able to select which project resource they
prefer to take advantage of.
The local agents will have three primary roles in the project: First to meet with companies and
help them develop relationships with TREDF and the project. Secondly, they will develop
linkages with the downstream target district companies and consumers and manage the
promotional events that build demand for solar products. Thirdly, they will coordinate with the
local stakeholders and involve them in them in the activities such as training, promotion etc.
Local agents in each country will be selected on the basis of suitability, and are likely to be
independent consultants.

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Public Involvement Plan


For this project to succeed, there must be active involvement from a number of key stakeholders.
During the PDF A activities, stakeholders were consulted in each of the participating countries to
seek their input to the project, during full-day stakeholders meetings and during one-to-one
discussions with players. Representatives from industry, government, civil society and NGOs
attended the meetings.
During stakeholder meetings, attendees agreed on the major barriers to growth of the market
(some had been decided previously) and chose focus regions for the project to concentrate on.
Participants addressed demand barriers, infrastructure barriers and technology barriers in focus
group sessions. A variety of points were raised in meetings (see Annex 2 for stakeholder
reports), and different countries had different issues.
Examples of key issues included:

Uganda: How would the project avoid duplication of the UPPPRE project?

Tanzania: Selection of an area that is not oversubscribed with development assistance was
an issue.

Kenya: How could the Kenya private sector assist the development of other markets?

Ethiopia: How can the project build awareness and lower prices for the rural market?

Eritrea: How could the project help companies in awareness raising, promotion and
coordination of sales?
Issues raised by participants were recorded and assimilated into the project plan. They will also
be re-visited during project initiation planning. Roles of the various stakeholders were discussed
in the meetings. It was agreed that the primary focus of the project would be on the private sector
and on raising awareness among consumers.
A mature industry involves a number of players, ranging from commercial importers to secondary
town-based sellers to NGO promoters to Government regulators to technology consumers. In the
process of building a PV supply chain, these players all have a role to play. Table 5 lays out how
the various players will be involved in the project.
A key function of this project is to share information about PV and rural electrification with all of
the players in the region. Intra-country visits, policy meetings and finance meetings will all play
some role in this. As well, the Solarnet magazine will be used to disseminate information about
the project, and about solar PV in general to stakeholders in the project. All stakeholders will be
sent quarterly copies of the Solarnet magazine. Over the course of the project, the magazine will
feature articles about each country, and about relevant topics. All stakeholders in the project will
be provided with a 2-year subscription to the magazine.
NB. A full list of stakeholders appears below.

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Table 5 Project Actors


Stakeholder
PV importing companies

Smaller solar companies


and independent
technicians, especially
those based in the target
districts.

Balance of systems and


appliance suppliers.

Government energy
departments.

Consumers

Relevance to Project
This is the key group of players, as
the sustainability of the project will
depend on their continued
involvement in the business after
the project close. These companies
already exist and have been
identified and short-listed.
Such companies will not necessarily
be involved exclusively in solar
energy --- they may be consumer
electronic shops, electrical spares
shops, free lance electricians, etc.
But they reach the rural markets.

Groups such as battery companies,


television/consumer electronics
distributors and local electronic part
manufacturers have a role to play in
the PV SHS market.
Energy officials have, in the past,
tended to focus on grid-based
approaches when considering rural
energy. In many East African and
Horn countries, Government
departments have had little access
to information about PV in rural
electrification, and, hence have not
incorporated PV into planning.
The ultimate beneficiaries of PV
systems are consumers that use
them.

Finance agencies

Financiers can help consumers


overcome high initial cost of PV
systems

Promotion agents,
community development
and energy NGOs.

These groups can help reach rural


target groups by enabling the
project to use their existing networks

How they will be involved


Primary project beneficiaries.
Will be involved in most
activities.

The success of the project will


be largely dependent on its
ability to entice such
businesses to incorporate
solar electricity into their
existing portfolio of products
and services. Many of these
stakeholders will be identified
during the course of the
project.
The project will show them
how PV can help them
develop sales of their products
to the rural market.
This project will select key
government policy makers and
planners, involve them in
activities, and keep them up to
date about regional PV
developments. They will be
involved in the policy
workshops.
This project, through
promotion and awareness
raising campaigns in rural
areas, will seek to raise
awareness among consumers
of PV technologies at district
levels and seek to help them
better understand the
technology.
The project will seek to interest
finance groups (at the national
and district level) in supporting
PV for rural development.
Attempts will be made to link
finance agencies with
international financiers (i.e.
TREDF).
NGO and community-based
development agencies will be
engaged during promotional

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Energy for Sustainable Development, Africa

and methods of outreach.


International PV
companies

PV products come from international


companies

PV and Rural Energy


Projects.

Major Projects involved in PV


extension work. I.e. Uganda
UPPPRE, Uganda ERT, PSOM
Tanzania, UNDP Tanzania, Energy
Access Program Ethiopia

and awareness-raising
activities.
The project will help them gain
a better understanding of
regional markets and enable
them to plan better regional
sales campaigns
The project will build on the
activities of these projects by
helping them reach into target
districts and by helping them
learn from experiences of
neighboring countries.

MONITORING AND EVALUATION PLAN


Monitoring and evaluation of the project will be carried out as an integral part of the project. The
project management team at ESDA will prepare monthly progress reports that will be assembled
into semi-annual progress reports. The project steering committee will meet 5 times over the
course of the project (i.e. at project commencement again after six months, at the project midterm, after 6 months, and again at the end of the project). During steering committee meetings,
progress reports will be carefully evaluated. They will then be forwarded to UNEP. At the end of
the project a final report will be compiled, and submitted to the project steering committee for final
review. All GEF and co-financing disbursements will be contingent on the project team meeting
minimum outputs and documenting these outputs in progress reports.
It is expected that UNEP would conduct their own review of the project some time after the
interim report is prepared. The project management will unit will follow the established
GEF/UNEP reporting and monitoring procedure (see M&E Annex).
Project success will gauged against the targeted output indicators already described (see Project
Outcomes and M&E Annex). Indicators can be categorized into three general types. The first
includes reports of activities carried out including workshop reports, market assessments, training
activity reports, documentation of exchange visits, etc. These reports will be compiled as
annexes into interim reports. The second type of indicator includes variables such as numbers of
actors (i.e. importers, dealers, etc.) and volumes or numbers of systems sold or disseminated.
This data will be monitored by local consultants and the project management and compared to
baseline figures. These data will be included in each interim report. Finally, the third type of
indicator will be the amount of financing support provided by TREDF to identified companies.
This information will be provided (on a confidential basis) to the steering committee of the project.
(TREDF prefers that its loan portfolio information be kept confidential). These will be evaluated
against project, national, regional, and GEF operational program objectives relevant to the
project.
Altogether, four interim reports and one final report will be prepared for the project. These will be
prepared by the ESDA management team with the assistance of the country consultants. As
mentioned above, meetings of the steering committee will regularly assess progress of the
project. Should there be a need to modify planned activities, such modifications will be proposed
to UNEP's GEF office. In steering committee meetings, a record will be made of the next 6month planned activities.
Reports, indicators (as described above, without TREDF loan information) and management
plans will be shared with and reviewed by national project teams (consultants, Government
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energy offices and companies), and by the steering committee at project mid-term and upon
project completion.

Table 6. Project Monitoring and Evaluation/ Project components


Project components
1.

2.

3.

4.
5.

Monitoring and evaluation

Meeting Reports/Paper Documents

Workshop reports

Training session reports

Inter-country visit reports

Data bases of companies and


Market Assessment in
individuals involved in PV
Target Regions of each
business in national and target
Country.
regions

Estimated PV sales records in


Business Opportunity
Awareness Raising and
target regions
Business Assistance
Records of awareness raising
activities

Project records of installed


Technician and Sales
systems
Training
Market assessment reports
International PV Company Attendance records at meetings
Visits & Product
Awareness Seminars
Meeting: PV and the Rural
East African Energy
Sector

6.

Inter-Country Exchange
Visits & International
Visits

7.

Awareness Raising
Campaigns

8.

Policy Workshops

9.

Finance Workshops

Official project reports

Semi-annual project
implementation reports

Documentation of GEF/UNEP
and Project coordination
supervision missions inspecting
field work

Critical Assumptions and Risks

The economic climate in each of the


countries will remain healthy
International PV companies remain
interested in the East African market
The climate is favorable for TREDF to
invest in companies
Companies will be interested in taking
equity loans from TREDF
Prices for PV equipment continue to
remain stable
Companies in the participating countries
and target regions will accept the
projects view that there is a large SHS
market in the target district
The various players (international,
national, district) will be willing to work
with the project and each other to
develop business linkages
The major projects (ERT Uganda, EAP
Ethiopia, UPPPRE, etc) will be willing to
work with the project

10. Awareness raising and


promotion

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Energy for Sustainable Development, Africa

BIBLIOGRAPHY
1. Acker, H. Richard, &Kammen, M. Daniel, The Quiet (Energy) Revolution: Analyzing the
dissemination of Photovoltaic Power Systems in Kenya. Draft, New Jersey, October
1994
2. Bess, Mike and Hankins Mark, Photovoltaic Power to the People: The Kenya Case.
UNDP/ESMAP, Washington DC, January 1994.
3. Cabraal, Anil/Cosgrove-Davies, Mac/Schaeffer, Loretta, World Bank Best Practices of
Photovoltaic Household Electrification Program, Lessons from Experiences in Selected
Countries, Washington DC August 1996
4. IGAD Regional Household Project No 7 ACP RPR 527: IGAD Eritrea PV Solar Home
System Market Study: The Potential for Commercial PV as a Complementary Tool for
Off-Grid Rural Electrification, Energy Alternative Africa Nairobi 2001
5. IGAD Regional Household Project No 7 ACP RPR 527: IGAD Ethiopia PV Solar Home
System Market Study: The Potential for Commercial PV as a Complementary Tool for
Off-Grid Rural Electrification, Energy Alternative Africa Nairobi 2001
6. IGAD Regional Household Project No 7 ACP RPR 527: Solar Photovoltaic Business
Opportunity Awareness workshop for Eritrea. Workshop Proceedings, Energy Alternative
Africa Nairobi 2001
7. Mbise H.(2002) Draft Report on Background Information on PV Technology in Tanzania.
Dar es Salaam 2002.
8. Musinga, Muli; Hankins, Mark; Hirsch, Danielle and de Schutter, Joop, Kenya PhotoVoltaic Rural Energy Project (KENPREP), Results of the 1997 Market Survey, Energy
Alternatives AFRICA, Kenya Rural Enterprise Program, Ecotec Resources BV, 1997
9. Samere H, Zemenfes T. (2001) Current Energy Utilization and Future Options in Rural
Areas. African Energy Policy Research Network, Eritrea.
10. World Bank UGANDA Energy for Rural Transformation Project: Project Appraisal
Document. Africa Regional Office, AFTEG. 2002
11. World Bank ESMAP, PV Electrification in Rural Kenya, A Survey of 410 Solar Home
Systems in 12 Districts: Final report. Washington, November 1997.
12. World Bank ESMAP: Uganda Rural Electrification Strategy Study, Washington. 1999

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Energy for Sustainable Development, Africa

Annexes
Annex 1:
Annex 2:
Annex 3:
Annex 4:
Annex 5:
Annex 6:
Annex 7:
Annex 8:

Stakeholder Contact List


Project Budget (see attached Excel file)
Country Summaries (see attached file)
Country Meeting Notes Tanzania
Country Meeting Notes Uganda
Country Meeting Notes Eritrea
Country Meeting Notes Ethiopia
SDG Brochure

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Annex 1: Stakeholder Contact List


Tanzania
Name and
Designation
Private Companies
Mr. F. Kibhisa
Managing Director

Organization

Address

Rex Investment Ltd.

Mr. E. D. Haule
Technician

Likungu Investments (T)


Ltd.

Mr. J. W. J. van der


Linden
Managing Director
Mr. B. Hanga
Electrical Engineer

Umeme Jua LTD,

Eng. W. Kipondya
Director

Fredka International LTD.

F. N. Simfukwe

Dynamic Control Systems Ltd.

P. O. Box4836
DSM.
Tel. 022-2180 109
fkibhisa@yahoo.com
P. O. Box 972, DSM,
Tel:22-2864443
liku-haule@yahoo.com
P. O. Box 26, DSM
Tel. 0741-455271
j.vanderlinden@umemejua.com
P. O. Box 9043,
DSM
Tel: 22-2 111269-72
hangabg@ar1.bp.com
P. O; Box 8080, DSM,
Tel. 022-2118438
fredka@fredka-tz.com
P.O. Box 63114, DSM
Tel: 022-2138398
P. O. Box 71358,
DSM.
Tel. 2421104
Gesco137@hotmail.com
P. O. box 32597, DSM
Tel. 0744-307440 or 0744 282563
allyilanga@yahoo.com

David Tubet
Marketing Manager

BP Tanzania LTD.,

GESCO LTD.,

Mr. A. H. R. Ilanga
Solar and radio
Communication
Engineer
Dr. S. Kawambwa
Senior Lecturer

Solar Energy (T) LTD.,

Mr. E. Indeche

Choride Exide Tanzania,

P. O. Box 35078 DSM


Tel. 2410376/0741-331995
ipi.udsm@ac.tz
Dar es Salaam

Representative

Tunakopesha LTD.,

DSM

World Bank ERT Program


(GEF PV component)
United Nations Industrial
Development Office

shs@idola.net.id

Tanzania Solar Energy


Association (TASEA)

P. O. Box 35046, DSM


Tel. 2410410.
mchijo@yahoo.com
P. O. Box 35046, DSM
Tel. 2410410.

International
Jim Finucane
(consultant)
Mr. V. Akim
National Program
Officer (Industrial
Development)
NGO
Dr. Cuthbert
Kimambo
Chairman
Dr. M. Chijoriga
Senior Lecturer

University Consultancy
Bureau

University Consultancy
Bureau

P. O. Box 9182,
DSM.
Tel: 22-2112527
Victor.akim@undp.org

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mchijo@yahoo.com
P. O. Box 35063, DSM
Tel. 2410410
kivaisi@hotmail.com
DSM

Prof. R.T. Kivaisi


Professor

University Consultancy
Bureau

Eng. Exaud Mushi

Nordplan

Mr. E. Sawe

Executive Director

TaTEDO,
P.O. Box 32794,DSM
Tel. 2700771
tatedo@raha.com

Ministry of Energy &


Minerals,

P. O. Box 2000, DSM


mwihava-mem@raha.com.

Ministry of Energy &


Minerals,
Tanzania Electricity Supply
Company (TANESCO)
UNDP Solar Project

P. O.Box 2000,
DSM
TANESCO
DSM
P. O. Box
DSM
katrin.lervik@undp.org

Government
Eng. N. C. Mwihava
Ag. Asst.
Commissioner for
Energy (Renewable
Energy)
Eng.Hosea Mbise
Engineer
Eng. Flora
Engineer
Katrin Lervik
Program Officer
Mr. A. R. Rajabu
Permanent secretary
Finance
Mr. N.T. J. Sigweto
Banker

Dept. of Environment
Vice Presidents Office

DSM

National Microfinance
Bank (NMB) LTD.,

P.O. Box 9213 DSM.


Tel: 22-2128146
ntjsigwejo@nmb.co.tz

Name and
Designation
Private Companies
Dawit Maharay
Proprietor

Organisation

Address

DM Electrical Engineering

Tekhle GhebreMedhin / Dieter


Hoppe

Asmara Solar

Samuel Berhane

Hydro Construction PLC

Hailu Negusse

Import Export,
Commission Agent &
Business Consultant

Meda Bahti Meskerem


PO BOX 5783. Asmara, Eritrea
Tel: 291 1 126737
Fax: 291 1 201534 or 122233
Asmara
Tel: 291 122616
siemans@eol.com.er
hannelore.hoppe@t-online.de
Asmara
Tel: 291 121818
hydro@gemel.com.er
Tel: 291 201334
Walta@gemel.com.er

Eritrea

International
Sergio Paladini
Damian
Borendorf/Marc

Italian Cooperation
European Union

Tel: 291 124563


Tel: 291 126566

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Stalmans
Emmanuel Ablo,
Resident
Representative
Vibeke Mortensen
Lis Truelson,
Honorary Consul &
SIDA liaison
Government
Samuel Baire
Director General
Energy Dept
Semere Habtetsin
Director Energy
Mgmt and Dev

World Bank

Tel: 291 124302 eablo@worldbank.org

Royal Danish Embassy

Tel:
291
124336/47/48
asmamb@asmamb.um.dk
Tel: 291 122302
swedcons@eol.com.er

Consulate of Sweden
Asmara

Ministry of Energy & Mines


Ministry of Energy & Mines

P.O.Box 5285, Asmara


Tel: 291 121541
samuel@ec1.doe.gov.er
P.O.Box 5285, Asmara
Tel: 291 121541
Fax: 291 1 127652
samere@ec1.doe.gov.er
Asmara
Tel: 291 117634
Asmara
Tel: 291 121301

Kidane Tseggai
Director General
Mr. Zemerit

Ministry of Local
Government
Ministry of Information

Tadesse Beraki
Economist, Energy
Dept
Finance
Mr. Kifle

Ministry of Energy & Mines

Rural Enterprise Unit

Asmara
Tel: 291 202550/48/49

The Manager

Investment Bank of Eritrea

Asmara

The Manager

Commercial Bank of
Eritrea

Asmara

The Manager

Housing and Commerce


Bank

Asmara

The Manager

ECDF (Min Loc Gov) 85


rural banks

Asmara

Uganda.
Name and Designation
Private Companies
Henry Nganwa
Managing Director

Organisation

Address

Incafex Solar Stystems

Plot 9 Bombo Rd. Kampala

Johnson Irumba
Sales Manager

Magric (U) Ltd.

Herbert Winyi,
Marketing Manager

Solar Energy for Africa,


Ltd.

103 Jinja Rd.


PO Box 3218 Kampala
Tel: 041 232100/ 259646/ 342513/
256220 Fax: 041 344606
magric@imul.com
Nitco House
PO Box 41544 Kampala
Tel: 041 250131 Fax: 041 250131

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Richard Kanyike,
General Manager

Solar Energy Uganda

Emmy Kimbowa
Chairman/CEO

Energy Systems Ltd.

Kithinji Musyoka
General Manager

Sollatek (U) Ltd.

Kamya Ezekiel,
Operations Mgr

UGA Solar Suppliers Ltd.

International
Jim Finucane (Consultant)
World Bank
Paul Nteza
Program Assistant
Mukasa Joseph
Chairman

PROJECTS
UPPPRE

Private Sector Foundation


(Handling Financial Part of
ERT)
Energy
for
Rural
Transformation
(World
Bank Project)
Government
Alessandra Sgobbi
Environmental Economist

Godfrey Turyahikayo
Commissioner of Energy

solar-sgu@africaonline.co.ug
Plot 14 Wilson St., Twese Building
P.O. Box 27392 Kampala
Tel: 041 250920 Fax: 041 232114
soenergy@africaonline.co.ug
Get-In House, 3 William St
PO Box 25928 Kampala
Tel/ Fax: 041 349055
kim_emmy2001@yahoo.co.uk
12 Wampewo Ave
PO Box 7742 Kampala
Tel: 041 349800 Fax: 041 342778
sollatek@swiftuganda.com
Chambers of Commerce Building Rm 9
Plot 12 Johnstone St.
PO Box 8535 Kampala
Tel: 041-344809
ugasolar@africaonline.co.ug
shs@idola.net.id

UNDP GEF/SGP

Uganda Renewable
Energy Assn.(UREA)

PO Box 7184 Kampala


Tel: 041 344801
Fax: 041 346454
gefsgp@infocom.co.ug
Amber House 2nd Floor Room B 201
PO Box 24577 Kampala
Tel: 041-349276, 344809
Fax: 041 349342
joshua-urea@utlonline.co.ug

Ministry of Energy and


Mineral Development

Amber Hse.
P.O.Box 7270, Kampala
Tel: 256 41 257863
Fax: 256 41 230220
evelyn.upppre@infocom.co.ug

Ministry of Energy and


Mineral Development

Amber Hse.
P.O.Box 7270, Kampala
Tel: 256 41 257863
Fax: 256 41 230220

Ministry
of
Finance,
Planning and Economic
Development

Finance Building, Nile Ave.


PO Box 8147, Kampala
Tel:041 234700/2/3 ext 216
Fax: 041 251793
socserve@africaonline.co.ug
Amber Hse.
P.O.Box 7270, Kampala
Tel: 256 41 257863

Ministry of Energy and


Mineral Development

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Philippe Simonis
GTZ Energy Advisor

GTZ/Ministry of Energy
and Mineral Development

Fax: 256 41 230220


evelyn.upppre@infocom.co.ug
Amber House Rm A205
PO Box 10346 Kampala
Tel: 041 234165 Fax : 041 234165
simonis@africaonline.co.ug

Ethiopia
Name and Designation
Private Companies
Mulugeta Girma
Director

Organisation

Address

Direct Solar Energy

Dr. Tesfaye Bayou


General Manager

Solatec Trading

Solomon Degefu
Manager, RE

Lydetco P.L.C

Tadesse Tilahun
Chairman
Kassa W/senbet
General Manager

Shell Ethiopia LTD.

Carlo Pironti
Manager

Nigist Solomon
Mekuria /CERD

Box 19244 Addis Ababa


Tel: 251-1-769476
Fax: 251-1-505302
Box 30792 Addis Ababa
Tel: 251-1-631467
Fax: 251-1-512219
tesfa_bayu@hotmail.com
Box 3593 Addis Ababa
Tel: 251-1-660267, 663189
Fax: 251-1-650767
lydet@telecom.net.et
Tel:251 1 653351
Fax:251 1 653321
Box 18134 Addis Ababa
Tel: 251 1 50382; 525490
Fax:251 1 525490
route@telecom.net.et
P.O Box 100692 Addis Ababa
Tel: 251 1 66826
cpironti@mind

International
World Bank
African Development Bank
Pancrase Niyimbona
Energy affairs Officer

Beta Electrical Control

UNECA

Hiwote Teshome / Trudy


Kdnemunde
HE Advisor
Government
Dr. Teketel Abebe
Lecturer
Alemayehu Negash

GTZ

Ato Aseres

Ethiopian Rural Energy


Development
and
promotion Center
Environmental
Protection Authority

Dr. Tewolde

Mekanisa
Box 3005 Addis Ababa
Tel: 251 1 443544; 513038
pniyimbo@uneca.org
P.O Box 5329 Addis Ababa
Tel: 251 1 516558

Addis Ababa University

Tel : 251 1 291673

Ethiopian Society of
Mechanical Engineers

Box 27613 Addis Ababa


Tel: 251 09-200968
ats@telecom.net.et
Tel: 251 1 510160

Tel: 251 1 627728


epa@telecom.net.et
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NGO
G/medhin
Head Renewable
Division
Johannes Abera
Finance
Woldoye Amehe
Director
Ato. Mendaye
PROJECTS
Hiwote Teshome

Energy

Selam Technical
Vocational Center

and

SCES

Association of Ethiopian
Microfinance Institute
Sidamo
Development
Corporation
GTZ HHE/protection of
Natural Resources

P.O Box 8075 Addis Ababa


Tel: 251 1 462807
davidr@telecom.net.et
Box 437 Awassa
Tel: 6200471

Box 30019 Addis Ababa


Tel:251 1 503830
aemfi@telecom.net.et
Awassa

Tel: 251 1 516558


Fax: 251 1 516558
biomass@telecom.net.et

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