Nana Asamoah-Manu Program Lead, Lighting Africa, Kenya

1. Great challenge. Great potential. Great Opportunity

2. The Lighting Africa/ Lighting Global Approach

3. The Lighting Global Quality Assurance Component

4. The Kenya Story. Progress through multi-pronged effort

Agenda

Over the next 15 years, Africa will rapidly surpass Asia to become the largest un-electrified market in the world

By 2030 roughly 1.3 billion people will remain un-electrified. With Africa’s unelectrified projected to grow to 700 million, gains made in other regions will be largely negated.

2009

2030

13

34 589

698

809 21

5

561

Un-electrified population, millions

4

Transformative technology in a dynamic market

5

“Off-grid solar” now delivers more: Lighting and beyond

8

Pico-PV (< 10Wp) SHS < 100 Wp

• Superior lighting vs. kerosene

• Cell-phone charging

• Multiple light points + cell-phone charging

• Also: TV, fans

Ten years ago, 40W solar panel powered: • Single 25 W incandescent bulb for

5 hours per day

Compared to 10 years ago, the same solar system can deliver a lot more energy services thanks to efficiency gains

9

Today, same 40W solar panel powers: • Four LED lights for 5 hours, and • Color TV for 4 hours, and • Phone charger for 3 hours, and • Radio for 6 hours

IFC/ WB program response

Driving the Market - The Lighting Africa Experience

11

Technology/business model advanceme

Prof

itabi

lity

Business Model Development

Catalyzing mainstream investment with

Financial Institutions CONSUMER EDUCATION

MARKET INTELLIGENCE

Proof of concept Maturity

BUSINESS SUPPORT

Break- even

Advisory services Investment

Addressing regulatory constraints

Catalyzing venture financing

12

Lighting Africa/ Global operates along the market transformation curve, focusing on specific market support/development activities …

QUALITY ASSURANCE

Catalyzing market development

Off-Grid Solar Energy Systems

• Cost-effective solution

• Variety of system types, prices, and quality levels

• Quality assurance needed to protect buyer interests and avoid market spoiling

Over the past five years, the off-grid solar market has been growing rapidly, ……and future projections look good.

Key Principles for Lighting Global QA

1) Ensure that products are durable and perform as advertised through rigorous testing

2) Publish results for products that meet the standards through the Lighting Global website to ensure transparency

3) Seek a reasonable balance between quality and affordability when setting standards

4) Maintain a predictable, stable framework so that stakeholders know what to expect

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Lighting Global QA Framework

Test methods and

standards

Testing, Verification, & Surveillance

Communicating Quality to

Market Stakeholder Engagement

Lighting Global Quality Assurance Primary Program Elements

Technical Specification 62257-9-5, Ed. 3.0

www.lightingglobal.org/products

Quality Standard

Consumer Awareness Campaigns ISO 17025

accreditation using ILAC affiliated organizations

Off-Grid Solar Sector

Governments

Development Agencies

Country Adoption of IEC TS 62257-9-5 and LG Quality Standards

ECOWAS Countries: Benin, Burkina Faso, Liberia, Gambia, Ghana, Guinea, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo, and Cape Verde.

Kenya Ethiopia

Countries that reference IEC TS 62257-9-5 and LGQA

ECOWAS has adopted QA standards that reference IEC TS 62257-9-5 and are similar to LG

QA (but not fully harmonized)

Tanzania

Pakistan, and Afghanistan have initiated adoption of harmonized

QA Pakistan Afghanistan

Lighting Global Quality Assurance Program Partners

Lighting Global QA Partners Lighting Global Test Laboratory Network

UNIVERSITY OF NAIROBI

2006 2008 2010 2012 2014 2016

Long-term Vision for Quality Assurance

IFC/World Bank

Initiated Lighting Africa

Program

Lighting Africa Quality Test

Method (LA-QTM) Developed by

Fraunhofer ISE

> 200 Off-Grid Products Tested

>70 Companies served

>20 Million Quality-Assured Products Sold

>25 Technical and Eco-Design Notes Published

Realized need for QA:

Started to develop test

method

IEC TS 62257-9-5, Ed. 2.0

Published

Lighting Asia

Launched

History: IFC and World Bank recognized the initial need for QA for off-grid solar back in 2007. The Lighting Global QA program has played a key role in off-grid solar market development and consumer protection. A harmonized international framework will help ensure future success.

Lighting Global works with CLASP, GOGLA, and other partners to create

a sustainable QA organization

Lighting Global

Launched

Government adoption of QA with reference to IEC and LG

Stds

LG QA Expands to SHS

kits

Lighting Global has expanded its QA framework to include solar home system kits

Rigorous and Harmonized QA Effort is Essential for Long Term Off-Grid Solar Success

Harmonized QA means: QA programs utilize

single set of (IEC) test methods and standards

Companies test their products once at a qualified lab and then can enter multiple markets

Sales of Quality Assured Off-

Grid Pico Solar Products in

Africa and Asia

Harmonization benefits companies, governments, & end-users by keeping costs low & allowing innovative products quick market entry

Lighting Africa

The Kenya story

District Electricity Lantern Tin Lamp Solar Total

NAIROBI 712,859 72% 128,173 13% 123,551 13% 992 0.1% 985,016

CENTRAL 383,076 31% 422,101 34% 367,069 30% 32,033 2.6% 1,224,742

COAST 220,503 30% 142,251 19% 340,281 47% 5,763 0.8% 731,199

EASTERN 146,328 11% 558,645 43% 447,687 35% 48,844 3.8% 1,284,838

NYANZA 94,018 8% 314,184 26% 751,889 63% 11,163 0.9% 1,188,287

NORTH EASTERN 17,642 6% 89,516 29% 63,579 20% 812 0.3% 312,661

RIFT VALLEY 365,205 17% 774,690 36% 686,871 32% 37,494 1.8% 2,137,136

WESTERN 50,109 6% 240,827 27% 592,199 66% 5,172 0.6% 904,075

KENYA 1,989,740 23% 2,670,387 30% 3,373,126 38% 142,273 1.6% 8,767,954

Household lighting data – Kenya (2009 Census)

District Electricity Lantern Tin Lamp Solar Total

NAIROBI - - - - -

CENTRAL 108,446 14.3% 318,036 42% 292,647 39% 28,101 3.7% 759,769

COAST 13,374 4.1% 65,904 20% 232,575 70% 4,668 1.4% 330,162

EASTERN 43,204 4.5% 423,285 44% 382,355 40% 41,551 4.3% 964,478

NYANZA 21,550 2.5% 221,415 26% 601,500 70% 8,593 1.0% 865,197

NORTH EASTERN 588 0.2% 68,753 28% 51,967 21% 458 0.2% 248,941

RIFT VALLEY 69,329 4.7% 569,673 38% 560,477 38% 30,734 2.1% 1,482,720

WESTERN 16,861 2.4% 180,547 25% 496,072 70% 4,307 0.6% 710,067

KENYA 273,352 5.1% 1,847,613 34% 2,617,593 49% 118,412 2.2% 5,361,334

Household lighting data – Rural areas (2009 Census)

A2F for manufacturers

A2F for importers

A2F for retailers/

consumers

..Key challenges in the sector… Low

consumer awareness

Different models of consumer awareness

Consumer education: Roadshow & Forum sessions

Awareness campaign - Integrated

radio

Forums

Roadshows SMS/ Other ATL

Retail/ Corporate/ Workshops

Significant progress in the Government of Kenya’s universal electrification

efforts

Acknowledging the exemplary performance of Kenya’s grid extension program @ 2017

0

10

20

30

40

50

60

70

2009 Q2 '16- Q1'17

Q3'17

23

55 70

% grid connected

Lighting Africa

And now the off-grid trend 2010 – 2016….

Kenya Annualized sales for quality solar lanterns & kits

Kenya Annualized sales for quality solar lanterns & kits

Cumulative sales – Kenya in millions

0.02 0.05 0.08 0.14 0.20 0.35 0.69

0.98 1.36

1.95 2.23

2.71 3.09

3.62

Jan - Dec2009

June -Dec 2010

Jan - June2011

July - Dec2011

Jan - June2012

July - Dec2012

Jan - June2013

July - Dec2013

Jan - June2014

July - Dec2014

Jan - June2015

Jul - Dec2015

Jan - June2016

Jul - Dec2016

% age of sales in AFRICA by country

Kenya 25%

Tanzania 7% Ethiopia

15%

Nigeria 7%

Rest of Africa 46%

AFRICA Country Sales Jan - Jun 2016 Kenya

34%

Tanzania 11%

Ethiopia 16%

Nigeria 7%

Rest of Africa 32%

AFRICA Country Sales Jul - Dec 2016

The SE4all Methodology now guides impact measurement

Improved energy access Number of people reached with

improved energy systems. -Simply based on x5 multiplier

being average number of people per household

- It assumed same impact irrespective of product

specifications

Energy needs met (based on SE4All methodology) Number of people with Tier

1 and Tier 2 energy access currently, based on

the Sustainable Energy for All Tracking Framework.

•

RETAIL PENETRATION

•Current market penetration of solar lighting units is 21%. This is a four fold increase from 2009. Largely driven by finance, good product experience and consumer awareness

•1

• Retail stores (76%) are the main outlets carrying solar lighting products. •2

•Solar lanterns account for 79% of the products handled by retailers. Home systems (37%) are gaining traction across the supply chain due to the multiple lighting function •3

•PAYG solar home systems accounted for 12% of the products carried by suppliers. There is a growing demand for these products •4

n=8,167

SALES THROUGH OTHER CHANNELS Easy access to finance for solar has increased the use of

solar products. MFI’s leverage on “Merry Go Rounds” and “Group Investments” to push for Solar loans. TARGET CHANNELS

MFI’S

SACCO’S

PAYG

RETAILERS

BRAND

OWNERS

High penetration of mobile phones driving the use of solar lighting systems. 79%penetration*

Charging PAYG leveraging on

the penetration of mobile phones to push for solar

Consumer education on availability of quality

products is needed to push growth and encourage

adoption

Innovation & trendy designs encouraging adoption of products by consumers

Opportunity for further growth lies in partnerships; Corporates Chama’s, schools, trade exhibitions last Mile Entrepreneurs

to build capacity and effectively implement low distribution costs

Increased consumer awareness & availability of credit for consumers is driving adoption of

solar lamps by consumers * Ipsos survey 2015

CONSUMER INTERVIEWS

Largely driven by nature of products used by the respondents targeted in the survey (users of quality accredited product)

Consumer Satisfaction is high (96%)

1

Driven by increased need for lighting, good product experience and availability of credit/finance. Need to educate/increase consumer awareness on availability of solar loans/credit facilities

Consumer upscaling

3

Solar consumers mainly look out for price and product functionality when making purchase decisions for solar products

Price key for purchase decisions

2

• Children can study for longer hours & finish homework (66%)

• Households save money (51%) Savings used to feed household (68%) Pay tuition/school fees (53%)

Solar impact to consumers

4

Lighting Africa Expansion: Building on Kenya lessons

IFC Focus Countries: • Nigeria • Ethiopia • Tanzania • Kenya

* WB preparing K-OSAP $150m program for 14 underserved counties in Kenya

Project Context Objectives

And Scope

To increase access to energy services in 14 underserved counties of Kenya • $150 million allocation with FY17 delivery

• Targets Households, Communities, Water pumping

• Targets Capacity Building

Components and

Implementation

Allocation

K-OSAP Implementation arrangements • MoEP, REA, KPLC and WSTF will be

implementing agencies at the national level

• County Government Representatives will be part of steering and technical working group set up to oversee project design and implementation

• Project Implementation Team within MoEP

Allocation • Mini-grids $40m • Households $30m • Community Facilities $30m • Water Pumping $30m • Technical Assistance $15m • Carbon Finance $5m --------- $155m

K-OSAP will target 14 counties defined as “marginalized areas” by the CRA Implementation of National Electrification Strategy Investments identified by Geospatial Plan

K-OSAP components 1. Mini-grids 2. Standalone home systems for households 3. Standalone home systems for community facilities 4. Solar Water Pumping for drinking water 5. Technical Assistance (County Capacity Building,

Consumer Awareness, Cooking Solutions, Strategic Planning and Program Management Unit)

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Geographic focus

www.lightingafrica.org www.lightingglobal.org

Asanteni Sana