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Submitted By
Energy for Sustainable Development AFRICA, Ltd.
PO Box 76406 Nairobi
Telephone: 254-2-577942/575902
mhankins@esda.co.ke
PROJECT SUMMARY
Project Identifiers
1.
Building Sustainable Commercial
Dissemination Networks for Household
PV Systems in Eastern Africa;
2.
UNEP
Kenya: 30 August 94
Tanzania 17 April 96
Uganda 8 September 93
Ethiopia 5 April 94
Eritrea 24 April 95
5. Operational program/Short-term
measure:
Climate Change
4.
Country eligibility:
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
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 4
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
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 5
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.
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 6
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
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
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 9
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:
Indicators:
Project outcomes:
Indicators:
Team identified and in place to manage project
in each country. All contracts, ToRs and
agreements prepared.
Final work plan prepared.
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.
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
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.
TOTAL COST:
$20,350*
GEF Contribution $20,350*
TREDF Contribution
0
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 25
Company Contribution 0
*Not included in project budget
12. Estimated budget (in US$ 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)
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.
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 27
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.
Appropriate
Products
Financing
Product
Supplier
Awareness
Raising
Sales
Training
Importers/
Assemblers
Distributors
Linkages
Policy
Agents
Customers
Market
Study
Installation
Training
Price Reduction
Quality Control
$36,800
$11,000
$17,000
$8,800
$58850
$53,850
$0
$5,000
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
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
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 39
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
85
49
61
49
89
51
64
51
94
54
67
54
98
56
70
56
2010
103
59
74
59
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.
UNEP-GEF Medium Grant Proposal
Commercial Dissemination Networks for Household PV Systems
Page 41
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
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
165
94
118
94
10456
5975
7469
5975
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.
&
Cost: US$ 0
Alternative
Increment
$161850
$97600
$14800
Improved
linkages
between
international
suppliers
and
regional dealers.
Better
knowledge
among
companies about the role of PV in
rural electrification and about the
possibilities of PV and BOS as
profitable products.
Increased
knowledge
among
finance agencies and companies
of finance methodologies for PV in
rural areas
Better awareness among policy
makers of what is happening with
PV-based rural electrification in the
region.
A
shift
toward
harmonization in PV standards
and policy among East African
countries.
Cost: US$ 0
Technical
Assistance (Act E)
TOTAL COST:
$280,200
GEF Contribution
$211260
TREDF Contribution:
$0
Company Contribution:
$68940
brands.
Cost: US$ 0
TOTAL COST:
$81,440
GEF Contribution:
$75,000
TREDF Contribution:
$0
Company Contribution: $6440
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
TOTAL COST:
$400000
GEF Contribution: $0
TREDF Contribution: $400000
Company Contribution: $0
Global
Benefits
Environmental
No project.
Cost $0
TOTAL COST:
$334,740
GEF Contribution:
$334,740
TREDF Contribution:
$0
Company Contribution $0
Costs
Total:
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.
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
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
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
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.
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.
Finance agencies
Promotion agents,
community development
and energy NGOs.
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.
2.
3.
4.
5.
Workshop reports
6.
Inter-Country Exchange
Visits & International
Visits
7.
Awareness Raising
Campaigns
8.
Policy Workshops
9.
Finance Workshops
Semi-annual project
implementation reports
Documentation of GEF/UNEP
and Project coordination
supervision missions inspecting
field work
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
Annexes
Annex 1:
Annex 2:
Annex 3:
Annex 4:
Annex 5:
Annex 6:
Annex 7:
Annex 8:
Organization
Address
Mr. E. D. Haule
Technician
Eng. W. Kipondya
Director
F. N. Simfukwe
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
Mr. E. Indeche
Representative
Tunakopesha LTD.,
DSM
shs@idola.net.id
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
mchijo@yahoo.com
P. O. Box 35063, DSM
Tel. 2410410
kivaisi@hotmail.com
DSM
University Consultancy
Bureau
Nordplan
Mr. E. Sawe
Executive Director
TaTEDO,
P.O. Box 32794,DSM
Tel. 2700771
tatedo@raha.com
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.,
Name and
Designation
Private Companies
Dawit Maharay
Proprietor
Organisation
Address
DM Electrical Engineering
Asmara Solar
Samuel Berhane
Hailu Negusse
Import Export,
Commission Agent &
Business Consultant
Eritrea
International
Sergio Paladini
Damian
Borendorf/Marc
Italian Cooperation
European Union
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
124336/47/48
asmamb@asmamb.um.dk
Tel: 291 122302
swedcons@eol.com.er
Consulate of Sweden
Asmara
Kidane Tseggai
Director General
Mr. Zemerit
Ministry of Local
Government
Ministry of Information
Tadesse Beraki
Economist, Energy
Dept
Finance
Mr. Kifle
Asmara
Tel: 291 202550/48/49
The Manager
Asmara
The Manager
Commercial Bank of
Eritrea
Asmara
The Manager
Asmara
The Manager
Asmara
Uganda.
Name and Designation
Private Companies
Henry Nganwa
Managing Director
Organisation
Address
Johnson Irumba
Sales Manager
Herbert Winyi,
Marketing Manager
Richard Kanyike,
General Manager
Emmy Kimbowa
Chairman/CEO
Kithinji Musyoka
General Manager
Kamya Ezekiel,
Operations Mgr
International
Jim Finucane (Consultant)
World Bank
Paul Nteza
Program Assistant
Mukasa Joseph
Chairman
PROJECTS
UPPPRE
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)
Amber Hse.
P.O.Box 7270, Kampala
Tel: 256 41 257863
Fax: 256 41 230220
evelyn.upppre@infocom.co.ug
Amber Hse.
P.O.Box 7270, Kampala
Tel: 256 41 257863
Fax: 256 41 230220
Ministry
of
Finance,
Planning and Economic
Development
Philippe Simonis
GTZ Energy Advisor
GTZ/Ministry of Energy
and Mineral Development
Ethiopia
Name and Designation
Private Companies
Mulugeta Girma
Director
Organisation
Address
Solatec Trading
Solomon Degefu
Manager, RE
Lydetco P.L.C
Tadesse Tilahun
Chairman
Kassa W/senbet
General Manager
Carlo Pironti
Manager
Nigist Solomon
Mekuria /CERD
International
World Bank
African Development Bank
Pancrase Niyimbona
Energy affairs Officer
UNECA
GTZ
Ato Aseres
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
Ethiopian Society of
Mechanical Engineers
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