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Investment Prospectus : General assessment and perspectives Cabo Verde

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ECOWAS SUSTAINABLE ENERGY WEEK

“Towards a Viable and Robust Energy Market in the ECOWAS Region” 17 - 19 October 2016

Project funded by the European Union EuropeAid/Development Cooperation Instrument DCI-ENV/2013/335-152

Analysis of renewable energy and energy efficiency policies

• National Strategy (NREAP, NEEAP, SE4ALL Action Agenda)

RENEWABLE ENERGY 2010 2020 2030

Renewable energy installed capacity in MW 2,4 MW 100 – 200 MW 150 – 300 MW

Percentage of renewable energy installed capacity 2,40% 100,00% 100,00%

Total generation from renewable energy in GWh 4,1 GWh 485,2 GWh 760,2 GWh

Total penetration of renewable energy in electricity production 1,20% 100,00% 100,00%

Improved cookstoves: measured relatively to the percentage of the population that uses firewood ND 15,70% 3,20%

Use of alternative modern cooking fuels (mostly LNG) - percentage of the population 70,20% 76,60% 91,30%

Percentage of new residences (new single-family households) with solar thermal systems ND 100,00% 100,00%

- Health centers, maternities, canteens and boarding schools (new) with solar thermal systems as percentage of the total ND 100,00% 100,00%

- New agri-food industries (water pre-heating) with solar thermal systems as percentage of the total ND 100,00% 100,00%

- Hotels (new) with solar thermal systems as percentage of the total ND 100,00% 100,00%

ENERGY EFFICIENCY Targets

Goal 2030 - 20,0% of final energy demand compared to the base scenario

Specific targets

10,0% reduction in the consumption of diesel, gasoline, petrol and jet A-1 in 2030

compared to the base scenario;

20,0% reduction in the electricity consumption in 2030 compared to the base scenario;

Reduction of technical and total losses to about 8,0%;

Reduction of the number of families using firewood (to approximately 2% in urban areas

and 10% in rural areas) and ending of the use of three-rock cookstoves

Regulatory framework in place

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CURRENT SITUATION

Energy policy

• Government energy strategy (2008); The strategic plan for renewable energy PESER was approved by resolution of the council of Ministers No. 7/2012 on December 9; NREAP, NEEAP and SE4ALL AA (2015).

Energy Law

• Law 13/VIII/2012: General protections for investors

• Law 26/VIII/2013: General fiscal incentives to investments, including for renewables

Ministerial implementation decrees

• Law Decree 14/2006: Organizational framework, role of stakeholders and tariff regulatory principles

• Law Decree 30/2006: Licensing procedures for IPPs and Auto Producers

• Law Decree 1/2011: Incentives for renewable energy development and special procedures for licensing renewable energy projects

ONGOING PROJECTS

• Legal, regulatory and administrative structure procedures preparation for launching new tenders.

• Grid Code.

• MASTER PLAN FOR THE ELECTRICITY SECTOR:

• the national authorities will have access to international know-how and expertise to the development of projection scenarios of the energy sector development and the necessary investments in line with the overall objectives of the national energy policy.

New Program of Governance

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BASIS FOR ENERGY POLICY

• The use, as far it is technically and economically feasible, alternative energy sources, particularly renewable and clean energy.

COMMITEMENTS

• Work to reduce the energy bill by at least 25% over the legislature.

• Ensure 100% coverage in terms of supply of energy and water throughout the country.

• Transform the sector of services related to renewable energy in a general industry jobs and exporter.

• Adopt a level of social tariffs for electricity and water.

• Promote a culture of optimization of energy demand.

• Reduce inefficiencies in the supply of energy.

• Qualify Regulation.

• Implement the “zero bureaucracy” in the energy sector.

MEASURES

• Promote wind energy on a large scale to the maximum penetration rate.

• Investing in the short term on solar photovoltaic for small and medium-scale projects, in the line with demand, particularly in remote areas, farms or streetlights.

• Encouraging the use of solar thermal for use in hotels, public buildings and schools.

• Using hybrid systems Diesel / Wind / Solar production of desalinated water.

• The Unbundling of ELECTRA

REDUCE THE COST OF CONTEXT AND PROMOTE ECONOMIC EFFICIENCY

Pipelines of the IP

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Pipeline 1

• Production, transport and distribution (on-grid)

Pipeline 2

•Not connected to the grid(Mini-Grids and standalone systems)

Pipeline 3

•Bioenergy and sustainable cooking

Pipeline 4

• Energy Efficiency

Pipeline 5

• Enabling environment

Projects connected to the grid

• Identified needs • Presently there are no technical conditions to install more

medium/large scale on-grid renewable energy projects in major island (Santiago, São Vicente, Sal and Boavista)

• Only smaller islands have technical conditions to install new small scale on-grid renewable project

• Identified type of projects • No on-grid projects under development were identified yet

(Call for Projects still ongoing)

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Pipeline 1

• Production, transport and distribution (on-grid)

Projects not connected to the grid

• Identified needs • There are opportunities for off-grid projects in some rural

communities in Santiago and Santo Antão islands

• Identified type of projects • Some potential projects were already identified. Waiting for

details (Call for Projects still ongoing)

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Pipeline 2

•Not connected to the grid (Mini-Grids and standalone systems)

Projects of energy efficiency

• Identified needs • Eco-labeling system for Cape Verde

• Efficiency improvement for Public and Private Buildings

• Identified type of projects • Some potential projects were already identified. Waiting for

details (Call for Projects still ongoing)

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Pipeline 4

• Energy efficiency

Projects to improve enabling environment for energy investments

• Identified needs • Household Renewable Systems regulation development

(Micro-generation regulation) • Creation of conditions to increase the renewable energy

integration capacity in Cape Verde (storage projects and RE management systems)

• Creation of conditions to increase energy efficiency in Cape Verde

• Among others

• Identified type of projects • Some potential projects were already identified. Waiting for

details (Call for Projects still ongoing)

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Pipeline 5

• Enabling environment

Identified projects in the country (baseline)

# PROJECTS # MW

Wind Solar Hydro Biomass/MSW Hybrid Other Wind Solar Hydro Biomass/MSW Hybrid

Pipeline 1 19 12 4 0 1 0 108,42 27,285 125 0 2

Pipeline 2 0 0 0 0 0 0 0 0 0 0 0 Pipeline 3 0 0 0 2 0 0 0 0 0 7,5 0 Pipeline 4 - - - - - 0 - - - - -

Pipeline 5 - - - - - - - - - -

TOTAL

19 12 4 2 1 0 108 MW 27 MW 125 MW 8 MW 2 MW

38

270 MW

Pipeline 1 Generation, Transmission and Distribution (on-grid)

Pipeline 2 Off-Grid (Mini-grids and standalone systems)

Pipeline 3 Bioenergy and Cooking projects

Pipeline 4 Energy Efficiency

Pipeline 5 Enabling Environment

19

12

4 0 1

Pipeline (Projects)

Wind Solar Hydro Biomass/MSW Hybrid

108.42

27.285

125

0 2

Pipeline (MW)

Wind Solar Hydro Biomass/MSW Hybrid

Presented baseline projects are still not assessed nor validated!! Call for projects process is still ongoing and other projects will be surely added.

Cabo Verde - SE4All Investment Prospectus development status and next steps

• SE4ALL Investment Prospectus start date: 2016 June 29th

• First Mission: 2016 September 19th to 23rd • Project selection criteria definition

• Consultation meetings with Energy Sector relevant stakeholders (Regulatory Agency, Private Promoters, National Utility, Donors, …)

• Call for Projects (“Project Fiches”) launch: 2016 November 30th

• Deadline for “Project Fiches” submission: 2016 October 31st

• Project Fiches analysis and submitted projects assessment and evaluation

• Second Mission • Presentation and discussion of the suggested Investment Prospectus Pipelines

• Consultation and clarification meetings with project promoters (if/when needed)

• SE4ALL Investment Prospectus draft preparation

• SE4ALL Investment Prospectus review and validation (Government, ECREEE and AfDB Quality Circle Review)

• SE4ALL Investment Prospectus expected finish date: 2017 March 31st

Dynamics of the energy sector to unlock private investment in the country

ONGOING PROJECTS

• Legal, regulatory and administrative structure procedures preparation for launching new tenders

• MASTER PLAN FOR THE ELECTRICITY SECTOR

PRELIMINARY IDENTIFIED PROJECTS

• Household Renewable Systems regulation development (Micro-generation regulation)

• Creation of conditions to increase the renewable energy absorption capacity in Cabo Verde: • High-penetration Grid Management System for the major island of the Archipelago • Pumped storage solution to increase renewable energy penetration in Santiago island • Among others

• Creation of conditions to increase energy efficiency in Cape Verde: • Energy efficiency improvement project for Public Buildings • Energy efficiency Program for Private Sector • Among others

Obrigado

Merci

Thanks for your attention

10/24/2016

Contacts

M. Edson Mendes: Edson.Mendes@mtide.gov.cv