E7/UNEP Rural Electrification Workshop Nairobi March 1-3, 2006 - PDF document

E7/UNEP Rural Electrification Workshop Nairobi March 1-3, 2006

Introduction The aim of this workshop was to enhance the capacity of local stakeholders in developing countries to undertake rural electrification projects with special emphasis on renewable energy applications. The Rural Electrification Workshop was successfully conducted in Nairobi (Kenya) at the beginning of March 2006. The workshop was attended by participants from 10 African countries and international institutions for a total of 50 participants (28 sponsored). The objectives of e7/UNEP Rural Electrification Rural Electrification Workshop included: - Identify the main challenges of rural electrification, based on a review of project experiences covering all stages of the cycle; - Review best practices and determine effective approaches by which to address the challenges of rural electrification in the local context; - Specify roles that e7 members and other stakeholders can play in ensuring that rural electrification projects are consistent with sustainability principles; and - Improve the ability of rural electrification project developers to develop project proposals that are eligible for e7 funding and/or technical support. In order to achieve the above mentioned objectives, the workshop was structured in a sequence of four major topics, which have been identified as crucial for rural electrification projects: - Project Identification; - Project Development, - Project Implementation, - Project Operation. As a workshop output a series of recommendations were identified and communicated to e7 members and participants at the World Bank's 'Energy Week', held in Washington DC in March. The Nairobi event was the second in a series of three being delivered in partnership with UNEP. e7-UNEP Rural Electrification Workshop 2/9

Workshop Major Recommendations • Representatives from Governments, Agencies, utilities, CBOs and NGOs, private sector : consultants, investors and operators, and international financing institutions met for three days of intense exchange of experience and discussions, under UNEP/e7 auspices • 13 countries, from EAC and SADC, as well as Senegal attended • In order to promote solutions for rural electrification, key to local development and MDG achievement, the workshop prepared the following recommendations to be presented by e7 and UNEP to the relevant forums, including World Bank Group Energy Week INSTITUTIONAL • Rural Electrification must be a priority in governments’ agendas, in order to increase production in rural areas. • An institutional, legal regulatory and fiscal framework should be defined and adequate budget funding should be available. • Each government should identify main institutions namely regulator, local governments, national utility, rural agency … and clarify responsibilities for each institution. • Planification process (grid-non grid)(rural agency-electric utility) To be implemented and updated • The government should have a long term vision of “rural electrification for economic development”, including a multi-sector approach associating the private sector, and mobilise the necessary means • Creation of a rural electrification agency is recommended to enhance the development of RE (planification, mobilization of finance). • Community capacity building and cross border and regional integration must be sought • Coordination of external donors is of paramount importance TECHNOLOGIES • Renewable sustainable energies including hybrid should be promoted • Proven technologies based on available resources (neutrality) and adequate to demand must be chosen • Design standards and normalized RE products, adapted and adaptable to the long term planning process, are to be implemented • Research institutions should be involved and centers of excellence for particular technologies should be supported. FINANCE • Need for capital subsidies, thus governments should continue to play a leading role in RE. • Development agencies (multilateral and bilateral) should provide the necessary subsidies • Resource assessment, project developments costs and capacity building should be also eligible for total or partial subsidies • Monitoring and evaluation of the project should also be taken into consideration • The barriers to local and small size commercial finance availability should be removed (guarantees, securities) • External donors and finance institutions should coordinate. BUSINESS MODEL • The business model should be financially viable and sustainable taking into account the previous recommended capital subsidies and alleviation of commercial bank barriers • The business model should be based on productive use. • Financial involvement of local stakeholders should be sought in implementation as well as the commercial aspect. • Working capital should be provided by line of credits. • Consumer installation cost should be included in the business plan e7-UNEP Rural Electrification Workshop 3/9

PRIVATE SECTOR INVOLVEMENT • Build confidence between private sector, government organization and communities. • Accept that RE should be a profitable business. • Incentives through finance and business models. • Open, transparent and fast track procedures for development subsidies, authorizations and investment funding • Data collection and adequate (GIS) mapping of existing infrastructures and housing should be made be made available for project developers. • Adequate allocation and mitigation of risks between acting stakeholders must be discussed and implemented DISSEMINATION OF INFORMATION • Access to success stories, good practice examples and exchange programs should be facilitated by multilateral agencies (UNEP, UE and other institutions) and should help their coordination. • Reliable data bank (including resource availability, current activities, training and exchange programs etc)and website, managed and maintained by existing structures (Ministries?) to be promoted • Legal framework necessary to ensure their maintenance and budget • Research institutions should be involved and centers of excellence for particular technologies should be supported CDM • Normal Carbon Fund procedures are too expensive • Pooling of projects to share transaction costs (small and large) (Example : UNDP MDG Carbon Facility) • All small scale Renewable Projects in Africa to be considered as a group for Carbon Fund • Local capacity building needed in the countries (local authorities) • Necessity of simplified methodologies (baselines) to be recognized by the CDM executive board • To promote all projects to the DNA (Designated National Authority) in each country before their international meeting in May 2006 in Germany e7-UNEP Rural Electrification Workshop 4/9

Programme DAY 1 (March 1, 2006) Workshop Registration 08.30 UNEP Gigiri Workshop Opening and Introduction 09.00 Welcome Mr Mwangi Kiunjuri Assistant Ministry of 09.15 UNEP & rural electrification Kenya 09.30 e7 and Rural Electrification, contribution to Zhija Wang, Officer in charge, Division of Sustainable Development and overview of Regional Co-operation, UNEP workshop approach and objectives of workshop e7 Conference Chair: Andy Riley, Scottish 09.50 Housekeeping Power e7 Conference Chair Session 1.1 – Scene Setting e7 Conference Chair 10.00 Session introduction - short summary of session e7 Conference Chair aims and introduction of presenters 10.10 Presentation 1 – Overview of situation and Mike Bess developments across region, drawing on Energy for Sustainable Development presenter’s experience + feedback from countries 10.40 Coffee Break Session 1.2 – Scene Setting (continued) 11.00 Presentation 2 – Highlighting issues identified Dr Njeri Wamukonya from invitee questionnaire UNEP 11.30 Open forum for participants to briefly highlight key e7 Conference Chair issues and concerns regarding rural electrification 12.00 Lunch Break 13.15 UN U NE EP P a an nd d G GE EF F f fo or r R Ru ur ra al l E El le ec ct tr ri if fi ic ca at ti io on n I In n A Af fr ri ic ca a Ca C at th he er ri in ne e V Va al ll le ee e- -S SP PO O Session 2.1 – RE Identification Session Chair: Ms. Justina Uisso Senior Research Officer, Ministry of Energy and Minerals, Tanzania 13.45 Identifying potential RE Projects - overview Jean Jaujay - EDF  with special focus on: institutional (policy) framework  also: regulatory issues, socio-economic aspects, planning, cross sector identification) 14.05 Case study: Lokhoho Madagascar Ms Pascale Bonzom (UNDP) and/or Dr Sascha Thielman (GTZ) 14.25 Case study: ASER Senegal Aliou Niang 14.45 Key issues and presentation of discussion topics Jean Jaujay - EDF - turning theory into practice (establish 3 discussion groups) 15.00 Discussion groups (3 off) Facilitators e7-UNEP Rural Electrification Workshop 5/9