off-grid taskforce: summary of 2 meeting

OFF-GRID TASKFORCE: SUMMARY

OF 2ND MEETING SUMMARY DOCUMENT | Y1.04.08.15.ZMB

April 2018

2

ACRONYMS (1/2)

Ministry of Local Government

Ministry of Finance

Ministry of Agriculture

Ministry of National Development and Planning

African Development Bank

Africa Enterprise Challenge Fund

Cooperating Partner

Deparment of Energy

Energy Regulatory Board

Ministry of Labour and Social Security

Beyond the Grid Fund for Zambia

Electricity Service Access Project

European Union

Increased Access to Electricity and Renewable Energy Production

International Finance Corporation

Ministry of Community Development and Social Services

Ministry of Commerce Trade and Industry

Ministry of Foreign Affairs

Ministry of Energy

Department for International Development

Definition

MLG

MoF

MoA

MNDP

AfDB

AECF

CP

DoE

ERB

MLSS

BGFZ

ESAP

EU

IAEREP

IFC

MCDSS

MCTI

MoFA

MoE

DfID

Term

3

ACRONYMS (2/2)

United States Agency for International Development

Zambia Environmental Management Agency

Zambian Bureau of Standards

World Bank Group

Ministry of Information, Broadcasting Services

Office of the Vice President

Rural Electrification Agency

Renewable Energy and Energy Efficiency Partnership

Rural Finance Expansion Programme

Value-added Tax

Renewable Energy

Southern Africa Energy Program

Solar Home System

Solar Industry Association of Zambia

Swedish International Development Cooperation Agency

The Technical Education, Vocational and Entrepreneurship Training Authority

Terms of Reference

Zambia Revenue Authority

Zambia Renewable Energy Association

Renewable Energy Cooperation Program

Definition

USAID

ZEMA

ZABS

WB

MoIBS

OVP

REA

REEEP

RUFEP

VAT

RE

SAEP

SHS

SIAZ

SIDA

TEVETA

ToR

ZRA

ZARENA

RECP

Term

4

CONTENTS

▪ Structure of the taskforce

▪ Support to the taskforce

▪ Taskforce meeting summary

▪ Next steps for USAID SAEP

▪ Appendix A: Co-operating partner mapping

▪ Appendix B: Interviews and reports used to date

5

THE OFF-GRID TASKFORCE HAS ADOPTED

THREE PRIMARY OBJECTIVES

Taskforce objectives1:

1 Formally adapted on December 22nd 2017 during Taskforce Formation (meeting detail below)

SOURCE: Content presented to private-sector stakeholders by REEEP (March 23rd)

▪ To provide a focus for coordination and oversight of market related

initiatives and activities designed to raise the profile and increase the

potential of the Off-grid sector in Zambia and deliver increased energy

access, particularly in rural areas, in line with Government objectives

1

▪ To provide a hub for the exchange and dissemination of experience,

know-how and information sourced from programme implementation,

regulatory or policy developments

2

▪ To provide a forum in which participants from Government, other agencies,

Cooperating Partners, private sector companies and civil society can

jointly interpret data and information, identify challenges in the sector and

agree on follow-up actions to resolve them

3

CONTENT FROM REEEP

STRUCTURE OF THE TASKFORCE

6

REPORTING DIRECTLY TO GOVERNMENT STAKEHOLDERS

ENABLES THE TASKFORCE TO IMPLEMENT ITS PRIORITIES

▪ Chair: Vice President + Ministry of Energy, Ministry

of National Development and Planning, MOFA,

MCTI, MCDSS

▪ Chair: MOE + Office of the Vice President, MOF,

MNDP, MOFA, MCTI, MCDSS

▪ Permanent / Core Members

▪ Ad-hoc Members

▪ Dept. of Energy and Dept. of Planning & Information

▪ Agents Sponsored by cps: REEEP (2018) supported

by other consultants and CPs/CP Energy Group

Inter-

Ministerial

PSS Steering

Committee

Off-Grid

Taskforce

Secretariat

Rep

ort

ing

an

d

info

rmati

on

flo

wIm

ple

men

tin

g u

nit

CONTENT FROM REEEP

Taskforce structure:



7

TASKFORCE MEMBERSHIP ENSURES REPRESENTATION

ACROSS KEY PRIVATE AND PUBLIC-SECTOR STAKEHOLDERS AND

CIVIL SOCIETY

Taskforce members


Government members

▪ Chair: Permanent Secretary of the Ministry of Energy and 6 Permanent Members

▪ DOE, Office of the Vice President, REA, ERB, MoE, MNDP

Other ad-hoc members (e.g. civil society)

Ad-hoc government members as required

▪ MLG, MCDSS, ZABS, ZEMA, MoA, Others

Private-sector

▪ 1 representative from each of the following groups: ZARENA, SIAZ, bioenergy,

financing and mini-grids

Cooperating partners

▪ DfID, SIDA, EU, USAID, World Bank Group, AfDB

CONTENT FROM REEEP


8

CONTENTS







9

AHEAD OF THIS TASKFORCE MEETING, SAEP HAS SUPPORTED THE

SECRETARIAT IN PRIVATE AND PUBLIC SECTOR WORKSHOPS

SOURCE: Post-workshop wrap-up documents, interviews,

March 22nd,

2018

First Taskforce

meeting

Dec 22nd 2017

Formation of

Taskforce

March 23rd,

2018

Private-sector

workshop

April 10th, 2018

Public-sector

orientation

April 10th-17th, 2018

CP coordination

correspondence

April 19th, 2018

Taskforce kickoff

Key

outcomes/

decisions

▪ Terms of

Reference

reviewed, with

changes

recommended

(particularly

around core

membership)

▪ OVP took

decision that

Taskforce would

report to a

Committee of

Ministers chaired

by the Vice

President

▪ OVP letter

signed to

confirm above

▪ SAEP presented

assessment of

SHS and mini-grid

private sector

opportunities and

challenges2

▪ Representatives

for each of the 5

private sector

nominated1

▪ Private-sector

voted on top

taskforce priorities

▪ IFC and SAEP

presented on off-

grid market3

▪ Public sector

participants

mapped their

organizations’

potential support

role(s) against

top off-grid

priorities

▪ CPs aligned on

how they can

each support

different priority

areas

▪ ToR approved

▪ 4 short-term

priority items

determined

▪ List of medium-

term priority

items proposed

Session

objectives

▪ Review and

adopt of Terms

of Reference

▪ Define taskforce

structure and

reporting

mechanism

▪ Align on top

Taskforce

priorities

▪ Decide on how

private-sector

players will be

represented on the

taskforce

▪ Orient

participants on

off-grid market

and government’s

role in supporting

its expansion

▪ Syndicate top

priorities defined

by the private

sector

▪ Enable

cooperating

partners to

coordinate how

they will support

taskforce

priorities

▪ Adopt the Terms

of Reference

▪ Approve minutes

of prior meeting

▪ Determine short-

and medium-term

priorities with

clear next steps

SAEP attended session SAEP did not attend session, but provided inputs SAEP did not attend session, and provided no inputs

1 SIAZ, ZARENA, mini-grids, bioenergy, financing

2 Private sector workshop deliverable submitted with presentation material and key outcomes

3 Capability building and orientation session deliverable submitted with presentation material and key outcomes

SUPPORT TO THE TASKFORCE

10

Policy

framework

Consumer

protection and

awareness and

information

Access to

finance

Technical and

operational

support

WORKING OFF DFID’S ENERGY AFRICA COMPACT ACTIONS, SAEP

DEVELOPED A LIST OF 13 PROPOSED PRIORITY ACTIONS FOR

INTERVENTION BY THE TASKFORCE

SOURCE: DFID Energy Compact, SAEP analysis, press searches, CP project webpages

1 As identified by private-sector stakeholders on March 23rd Private-sector Workshop | 2 As identified by public-sector stakeholders on April 10th public-sector workshop

3 With SIDA support (USD 8.5 M grant) | 4 Potential support area for Commonwealth Governments | 5 Core emphasis on tech. standards to provide clarity and consistency for MG developers

Proposed off-grid taskforce action DFID Energy Compact action

b Create off-grid electrification taskforce Action 1

Status/progress

to-date

a Subsidize end-users, especially in low-density and low-income areas Proposed

a Conduct economic analysis on job creation and local content strategy Action 1

8 Support formation of industry association Action 6

11 Advance a wider range of financing products Action 8

b Provide direct financial support to SHS and mini-grid providers in the growth

phase (e.g., working capital)

Proposed

3 Streamline the mini-grid licensing procedure Proposed

2 Finalize renewable energy strategy Action 2

6 Provide support on enforcement of quality standards4 Action 4

9 Launch a “Go off-grid” national awareness building campaign Optional

12 Provide site identification tools integrating feasibility factors for SHS and mini-grid Proposed

13 Set-up off-grid specific vocational training programs to create a pool of skilled labor Optional

1 Develop clear targets for off-grid electrification Action 1

4 Establish a clear tariff setting framework for mini-grid developers including

government subsidies

Proposed

7 Develop scheme for quality certification Action 5

5 Develop consistent fiscal measures (e.g. VAT, duties) for the off-grid components Action 3Fiscal

measures

10 Provide regulatory and financial support to off-grid providers in the startup phase

(e.g., equity) to encourage the supply of off-grid solar products

Action 7Early market

entrance

CompleteIn progressNot started


11

SAEP HELPED TO SYNDICATE THESE PRIORITIES WITH KEY OFF-GRID

STAKEHOLDERS AHEAD OF THE APRIL 19TH MEETING

E-mail syndication to cooperating partners

(April 16th to 18th ) Forum

Stakeholders

engaged

Private-sector workshop (March 23rd)

Azuri

Vitalite

Sunny Money

Muhanya Solar Ltd

Fenix International

ID Solar

Onyx International

RUFEP

Kazang

Timbuktu Kafita

Biolife Energy Zambia (BEZ)

Welada Bioenergy Solutions

Emerging Cooking Solutions

Small Hydro Solutions (Zambia) Ltd

Greenheart Energy Group

Sustainable Energy and Environment

Standard Microgrid

Sigora Zambia

ENGIE Power Corner

Airtel

ZARENA

DfID

EU

SIDA

USAID

World Bank/ IFC

Public-sector orientation (April 10th)

Energy Regulatory Board

Ministry of Community Development

and Social Services

Ministry of Energy

Ministry of Finance

Ministry of National Development

Planning

Office of the Vice President

Rural Electrification Authority

Zambia Bureau of Standards

Zambia Environmental Management

Agency

Public-sector orientation (April 10th) Cooperating partners (April 16th to 18th) Private-sector

AfDB

Stakeholder has engaged/ participated in priority development Stakeholder has not engaged

SOURCE: Private-sector Workshop particpation (3/23); Public-sector Orientation participation (4/10); E-mail exchanges with CPs

A B C


12

THE PRIVATE SECTOR PRIORITIZED 4 ACTIONS AS A STARTING

POINT FOR THE TASKFORCE




Top private-sector priorities1 CompleteIn progressNot started

A


Policy

framework

Consumer

protection and

awareness and

information

Access to

finance

Technical and

operational

support

Proposed off-grid taskforce action DFID Energy Compact action

b Create off-grid electrification taskforce Action 1

Status/progress

to-date

a Subsidize end-users, especially in low-density and low-income areas Proposed

a Conduct economic analysis on job creation and local content strategy Action 1

8 Support formation of industry association Action 6

11 Advance a wider range of financing products Action 8

b Provide direct financial support to SHS and mini-grid providers in the growth

phase (e.g., working capital)

Proposed

3 Streamline the mini-grid licensing procedure Proposed

2 Finalize renewable energy strategy Action 2

6 Provide support on enforcement of quality standards4 Action 4

9 Launch a “Go off-grid” national awareness building campaign Optional

12 Provide site identification tools integrating feasibility factors for SHS and mini-grid Proposed

13 Set-up off-grid specific vocational training programs to create a pool of skilled labor Optional

1 Develop clear targets for off-grid electrification Action 1

4 Establish a clear tariff setting framework for mini-grid developers including

government subsidies

Proposed

7 Develop scheme for quality certification Action 5

5 Develop consistent fiscal measures (e.g. VAT, duties) for the off-grid components Action 3Fiscal

measures

10 Provide regulatory and financial support to off-grid providers in the startup phase

(e.g., equity) to encourage the supply of off-grid solar products

Action 7Early market

entrance

CompleteIn progressNot started

13

DURING THESE INTERACTIONS, SAEP HELPED TO MAP

CO-OPERATING PARTNER SUPPORT AND GOVERNMENT

IMPLEMENTERS AGAINST THE PROPOSED ACTIONS




Policy

framework

Consumer

protection and

awareness and

information

Access to

finance

Technical and

operational

support

Fiscal

measures

Early market

entrance

ZABS; ERB

Ministry of Energy; MoIBS

Status/

progress

to-date

Optional

DFID Energy

Compact

action

Proposed

Action 1

Action 1

Action 6

Action 7

Proposed

Action 8

Proposed

Action 3

Action 2

Action 4

Proposed

Optional

Action 1

Proposed

Action 5

Proposed off-grid taskforce action

a Subsidize end-users, especially in low-density and low-

income areas

a Conduct economic analysis on job creation and local

content strategy

b Create off-grid electrification taskforce

8 Support formation of industry association

10 Provide regulatory and financial support to off-grid providers

in the startup phase (e.g., equity) to encourage the supply of

off-grid solar products

b Provide direct financial support to SHS and mini-grid

providers in the growth phase (e.g., working capital)

11 Advance a wider range of financing products

3 Streamline the mini-grid licensing procedure

5 Develop consistent fiscal measures (e.g. VAT, duties) for the

off-grid components

2 Finalize renewable energy strategy

Provide support on enforcement of quality standards46

9 Launch a “Go off-grid” national awareness building campaign

Provide site identification tools integrating feasibility factors

for SHS and mini-grid12

13 Set-up off-grid specific vocational training programs to create

a pool of skilled labor

1 Develop clear targets for off-grid electrification

4 Establish a clear tariff setting framework for mini-grid

developers including government subsidies

7 Develop scheme for quality certification

Public-sector organizations

that should implement2

Ministry of Energy

Office of Vice President

MLSS; Ministry of Commerce

MoF; Ministry of Energy


ERB; ZEMA

ZRA; MoF; Ministry of Energy

Ministry of Energy


Ministry of Higher Education;

TEVETA

Ministry of Energy

ERB; Ministry of Energy

ZABS; ERB

IFC: standards harmonization5; EU: IAEREP

EU: RE Portfolio (potential support area)

Other supporting projects

DfID: subsidy analysis (potential support area)

SIDA/ REEEP: Secretariat

USAID: SAEP

EU: RECP; SIDA: BGFZ, Energy for Agriculture

USAID: SAEP ; IFC: online information portal

EU: IAEREP, ElectriFi; SIDA: BGFZ; WB: ESAP;

DFID: AECF/ REACT, CDC, InfracoAfrica, Green Inv.

IFC: regulatory and legal review; EU: IAEREP

DfID: fiscal analysis

EU: IAEREP; UNDP

WB: ESAP; IFC: market assessment; USTDA

EU: IAEREP

EU: RE Portfolio; WB: ESAP3; USAID: SAEP

EU: IAEREP

IFC: standards harmonization5; EU: IAEREP

Top private-sector priorities1

Complete

In progress

Not startedB

C


14

CONTENTS







15

THE APRIL 19TH TASKFORCE MEETING WAS ATTENDED BY

PARTICIPANTS FROM ACROSS 15 ORGANIZATIONS

SOURCE: USAID attendee meeting notes, debrief meeting with REEEP

TASKFORCE MEETING SUMMARY

In attendance Apologies received

Cooperating partners

▪ Department for International Development

▪ European Union

▪ Swedish International Development Agency

▪ United States Agency for International Development

▪ African Development Bank

▪ World Bank Group

Secretariat▪ Department of Energy

▪ Renewable Energy and Energy Efficiency Program

▪ N/A

Consultants ▪ Kuungana Consulting ▪ N/A

Government

▪ Office of the Vice President

▪ Ministry of Community

Development and Social

Services

▪ Department of Energy

▪ Energy Regulation Board

▪ Ministry of Finance

▪ Rural Electrification

Authority

▪ Zambian Bureau of

Standards

▪ Zambian Revenue

Authority

Private-sector

▪ Bioenergy representative

▪ Financing representative

▪ Mini-grid representative

▪ Solar Industry Association of Zambia

▪ Zambian Renewable Energy Association

▪ None

16

KEY DECISIONS INCLUDED THE APPROVAL OF THE TERMS OF

REFERENCE, AND THE PROPOSED FORMATION OF A SUB-

COMMITTEE TO TACKLE FISCAL EXEMPTIONS (1/2)


1 Private sector representative stated that this is the third collective effort of the Permanent Secretary to get the government to address these concerns, and no action has been taken to date.

Agenda item

Terms of Reference

(TOR)

Minutes

Fiscal analysis

presentation

What was presented

▪ Adjusted TOR

▪ Minutes from March 22nd

meeting

▪ DfID-commissioned “Analysis

of the economic effects of

fiscal policy options for off-grid

technologies in Zambia” by

Kuungana Advisory with two

major strands:

– Redrafting statutory

instruments is required

– New policy needs to be

complemented with

increased consistency of

enforcement at customs

Next steps / actions

▪ N/A – complete

▪ N/A – complete

▪ Workshop to be hosted on

specifics of the statutory

instruments (likely attended

by MOF, ZRA, private

sector)

▪ See sub-committee next

step below

Response(s) by taskforce group

▪ TOR approved with cosmetic

changes

▪ Minutes approved with

cosmetic changes

▪ Direct questions by private

sector representatives to

Ministry of Finance and

Zambian Revenue Authority on

whether #1 and #2 would be

implemented.1 There was

concern that a 2019 timeline is

too long to wait and will result in

no action.

– MOF were to attend

session with Kuungana to

understand specific details

further.

– ZRA representative said

limited action could be

taken without legislative

policy changes


17

KEY DECISIONS INCLUDED THE APPROVAL OF THE TOR AND 1ST

MEETING MINUTES, AND THE PROPOSED FORMATION OF A SUB-

COMMITTEE TO TACKLE FISCAL EXEMPTIONS (2/2)


1 Private sector representative stated that this is the third collective effort of the Permanent Secretary to get the government to address these concerns, and no action has been taken to date.

Priori-

ties and

next

steps

Short-

term

priorities

▪ Four areas proposed:

1. Redrafting current statutory

instruments

2. Operationalising these

instruments more

consistently at customs

3. Improving mini-grid

regulation (improving tariff-

setting)

4. Developing a strategy for

the bioenergy sub-sector

▪ Sub-committees to be

formed around each priority

area

– DfID, SAEP, MOF and

ZRA to form part of joint

sub-committee to

address #1 and #2

▪ Priorities to be finalized

after 1 month (by 18 May

2018)

▪ No opposition to proposed

areas of priority

▪ Ssuggestion to form sub-

committees around each

priority area

▪ Request by Chair to have a one

month no-objection period,

during which taskforce

members can submit feedback.

After this period, priorities

would be considered endorsed

Next

meeting

and AOB

▪ Date TBD – most likely end of

August 2018

▪ Date and venue to be sent

to taskforce members

▪ PR strategy to be

developed and

implemented to

communicate taskforce

activities to the public

▪ None

Medium-

term

priorities

▪ Some SAEP-identified barriers

(consumer finance, go-off-grid

campaign, vocational training)

were listed

▪ Priorities to be finalized

after 1 month

(by 18 May 2018)

▪ No clear next steps for

medium-term priorities

▪ None


Agenda item What was presented Next steps / actionsResponse(s) by taskforce group

18

CONTENTS







19

SAEP HAS ALIGNED ITS SUPPORT TO FOCUS ON PRIORITY AREAS

WHERE FEWER COOPERATING PARTNERS ARE CURRENTLY ACTIVE

SOURCE: Team analysis

SHS-SPECIFIC PATH TO IMPACT

SHS –

SIAZ

support

SHS –

off-grid

taskforce

support

Proposed SAEP support Core issue

Other cooperating

partner support

Salesforce

effectiveness

▪ Targeted bootcamp training for sales agents

across SHS companies

Sales ability and persistence of

agents could be improved to

increase sales (esp. PAYG)

▪ N/A

Tax and duty

exemption policy

& enforcement

▪ Re-drafting of statutory instruments (with DfID)

▪ Zambian Revenue Authority and customs

workshop (with DfID)

Tax and duty exemptions (SIs)

are inconsistently applied to

imported products

▪ DfID – fiscal impact

of exemptions

analysis

Consumer

affordability

▪ Affordability ‘gap’ analysis for off-grid

technology

▪ Off-grid taskforce program mgmt. support to

follow-up on CP & govt financing commitments

for consumer uptake of SHS

SHS prices high relative to rural

household income, and with

higher share of cost per

connection borne by consumer

relative to grid connection

▪ DfID – proposed

subsidy analysis

Off-grid targets

in elec. plan

▪ Handover of model to World Bank and

supporting consultant, including follow-up

support as needed

National targets do not include

explicit off-grid share

▪ World Bank –

National Electri-

fication Strategy

Debt finance (for

developers)

▪ Mapping of current cooperating partner finance

commitments for off-grid taskforce private

sector representatives

▪ Off-grid taskforce program mgmt. support to

follow-up on and disseminate financing

opportunities

▪ Explore the development of financing

mechanisms to support the reduction of high

interest costs

SHS providers lack affordable

(debt) finance to operate at

desired scale and are not

always aware when new funding

windows will become available

from cooperating partners

▪ EU – ElectriFi, REA

fund

▪ SIDA/USAID –

Beyond the Grid

Ongoing support

to SIAZ for scale-

up

▪ Regular attendance at SIAZ meetings (monthly

basis), program support including dashboards

to create transparency over progress, and

content support on cross-cutting challenges

SIAZ in early stages of

development, with scope to

improve and systematize

internal processes

▪ N/A

Route-to-market

▪ Route-to-market prioritization & direct support to

companies (e.g., common logistics platform

leveraging geospatial model)

Low density and limited

distribution network drive up

costs

▪ N/A

15

4

3

5

6

1

17

10

11

20

PROPOSED WORKPLAN THROUGH TO SEPTEMBER# Task number

Mar Apr May Jun Jul Aug Sep

19. 26. 02. 09. 16. 23. 30. 07. 14. 21. 28. 04. 11. 18. 25. 02. 09. 16. 23. 30. 06. 13. 20. 27. 03. 10. 17. 24.

Implementation support

Implementa-

tion support

Customised analysis for private sector &

ongoing support to other stakeholders

▪ Route to market

▪ Salesforce effectiveness

Model

public

release

Barrier resolution 2: fiscal

exemptions and

enforcement

▪ Support to REEEP on meeting preparation

▪ Consolidating next steps between taskforce meetings

Barrier resolution 1:

Consumer

financing

Model

com-

plete

▪ Go Solar campaign

▪ Route to market

▪ Quality standards

▪ Content support on priority

initiatives

16-Apr-2018

30-Apr-2018

04-Jun-2018

30-Apr-2018

28-Sep-2018

20-Aug-2018

27-Aug-201830-Mar-2018

30-Jul-201830-Apr-2018

29-Jun-2018

Activity

Off-grid taskforce

Enabling environment support

▪ Program management support

Geospatial model

SHS Expansion Program

Operational support

to companies via SIAZ

▪ SIAZ program management

and initiative tracking

▪ SIAZ content support

09-Apr-2018

OC 4

OC2: Workshop with ZESCO on geospatial connections opportunity (TBD)

1 2 3

54

98 10

11

6 7

12

PROPOSED WORKPLAN

a

b

c

21

Apr May Jun Jul

16 23 30 7 14 21 28 4 11 18 25 2 9

▪ Provide content support on as-needed basis to

SIAZ members (e.g., consumer affordability survey

industry best practices)

▪ Connect SIAZ and members to relevant

stakeholders to de-bottleneck issues

Activity

Model email to SHS players/ uploaded on SIAZ dropbox

▪ Make model publicly available Press

release shared

▪ Continue project management support to SIAZ,

including on initiatives from SHS Program

▪ Share model with SHS players

▪ Generate customized geospatial

results as needed, for SHS players

Model overview presented at SIAZ

Geospatial

model

SIAZ

initiative

tracking

and project

manage-

ment

support

SIAZ

content

support on

priority

initiatives

WORKPLAN DEEP-DIVE: SHS EXPANSION PROGRAM

NEXT STEPS FOR SAEP

a

22

WORKPLAN DEEPDIVE: CONSUMER FINANCING

Apr May Jun

23 30 7 14 21 28 4 24 25 26

▪ Align on ‘zones’ of priority areas for SHS expansion

Engage relevant stakeholders

Conduct text-based survey (for ~1,000 respondents)

Design text-based and qualitative survey questionnaire

Develop list of target regions

from SHS discussions

Sign contract with

preferred vendorProcure vendor for text-based surveys

Conduct qualitative surveys in targeted regions

Finalize report on consumer financing (demand side)Analyze collected data

and synthesize findings

▪ Quantify cost implications for serving each ‘zone’

from SHS provider perspective

Date

Identify

potential financing partners

PS with key SHS players

▪ Develop appropriate financing mechanisms,

and relevant financiers (e.g., private lenders,

government, co-operating partners)

Working

session #2

with DFID

▪ Quantify affordability gap for consumers

(by income group and location)

▪ Approach financiers, co-operating partners

and government with pilot proposal

▪ Develop consumer financing pilot proposal

(collaborating with DfID) Working

session #1

with DFID

Consumer

affordability

Consumer

financing:

supply side

Consumer

financing:

pilot

NEXT STEPS FOR SAEP

Financing

mechanisms

b

23

Apr May Jun Jul

16 23 30 7 14 21 28 4 11 18 25 2 9

OGTF Secretariat▪ Determine partnership support model (DfID, SAEP)

▪ Finalise report with SI recommendations Kuungana (DfID)

▪ Confirm proposed SI revisions and align with MoF

07-May-2018

15-Jun-2018

SAEP - Archie

▪ Track CfP through Cabinet & budget discussions

DfID/SAEP (Secretariat)

SAEP - Archie

▪ Align recommendations with all stakeholders

(private sector, ZRA, MoF, MoE)

11-Jul-2018

DfID/SAEP - Archie

SAEP - Archie

▪ Understand ‘most affected’ customs sites

▪ Submit SI revisions under MoF “call for proposals”) DfID/SAEP (Archie)

▪ Host information session for private sector

SAEP - Archie

Owner (support)Activity

▪ Host capacity building workshop with ZRA

Exemption

policy (i.e.

SI re-

drafting)

Enforce-

ment

WORKPLAN DEEPDIVE: FISCAL EXEMPTIONS AND ENFORCEMENT

NEXT STEPS FOR SAEP

c

24

CONTENTS








▪ SAEP support to date

▪ Next steps for SAEP

25

Development partners working in the off-grid sector

SOURCE: Press search, interviews

▪ Development

partner programs

provide various

forms of assistance:

policy

recommendations,

technical

assistance,

financing and

capacity building

▪ The off-grid

taskforce will

provide valuable

input to the policy

framework

▪ Most programs are

not linked

to an explicit set of

target connections1

1 SIDA's Beyond the Grid program is an exception with specific targets for assisted companies

A NUMBER OF DEVELOPMENT PARTNER PROGRAMS ARE

SUPPORTING THE SCALE-UP OF OFF-GRID ELECTRIFICATION

APPENDIX A: CO-OPERATING PARTNER MAPPING

26

Donor name

FinancingFPolicy supportP Other technical assistanceTA Capacity buildingC

Description

AfDB

EU

DFID1

Program name Support type

Renewable Energy Financing ▪ Provide blended financing for IPPs working

Solar PV and small hydro

TA F

ElectriFi – Zambia window ▪ Provide risk-based financing to projects F

Renewable Energy

Cooperation Program2

(RECP)

▪ Facilitate private-sector cooperation,

supports access to finance and innovation

and skills development in Africa

CTAP

Clean Energy Program/ Africa

Energy Compact

▪ Provide policy support to create the enabling

environment for SHS scale-up

TAP

Africa Enterprise Challenge

Fund

▪ Invest in enterprises active in the SHS

markets

F

New Deal on Energy

for Africa

▪ Provide policy, financing and capacity

building to reach universal access by 2025

CTAP F

1 DFID has additional forms of support not exclusively focused on energy (i.e. Financial Sector Deepening supports PAYG for SHS and CDC Group invests in on and off-grid providers)

2 Supported by multiple European governments (incl. Austria, Finland, Germany, Italy, Netherlands and Sweden)

F

▪ Provide policy and technical support to GRZ

and skills development to all incl. private

sector

▪ Support GRZ on mini-grid smart subsidies

▪ Fund demo project on RE mini-grids based

on PPP business models

CTAP FIncreased Access to

Electricity and Renewable

Energy Production (IAEREP)

DEVELOPMENT PARTNERS’ MAJOR FOCUS IS ON PROVIDING

FINANCING AND TECHNICAL ASSISTANCE TO THE SECTOR (1/2)

PRELIMINARY

TA

SOURCE: Cooperating Partners' Matrix on Projects focusing on Access (last update: 13 March 2018), Press search, project websites and documentation, interviews


27SOURCE: Cooperating Partners' Matrix on Projects focusing on Access (last update: 13 March 2018), Press search, project websites and documentation, interviews

PRELIMINARY

1 Component C focuses on capacity building for on-grid and off-grid

Donor name Description

UNDP

Program name Support type

China-Zambia South-South

Cooperation on Renewable

Energy Technology Transfer

▪ Improve energy access and living conditions

in rural Zambia through South-South

Cooperation and supporting tech deployment

Electricity Service Access

Project (ESAP) –

Components B and C

▪ Support GRZ on mini-grid smart subsidies

and financing mini-grid pilots

▪ Develop National Electrification Strategy1

(including GIS least cost electrification plan)

▪ Support capacity building and project

implementation

Beyond the Grid for Zambia

(BGFZ)

▪ As detailed above for SIDA F

Southern Africa Energy

Program

▪ Provide support to increase MW and

connections in 11 SADC countries

CTAP

USTDA and USADF funding ▪ Provide financial support to mini-grid

developers through specific grants

TA F

World

Bank

U.S.

Govern-

ment and

USAID


TAP

CTAP F

DEVELOPMENT PARTNERS’ MAJOR FOCUS IS ON PROVIDING

FINANCING AND TECHNICAL ASSISTANCE TO THE SECTOR (2/2)

SIDA Beyond the Grid Fund for

Zambia (BGfZ)

▪ Support off-grid providers to deliver 1 million

connections using clean energy solutions

F

Power Africa ▪ Several projects in Zambia (incl. technical

assistance to the MoE and the regulator to

develop RE feed-In tariff)

CTAP


28

AFRICAN DEVELOPMENT BANK: NEW DEAL ON ENERGY

FOR AFRICA

Duration10 Years (2016-2025)

Budget

▪ USD 12 B from AfDB

▪ Additional USD 45 – 50 B of co-

financing

Supported

agencies

African governments, private-sector actors,

bilateral and multilateral energy sector

initiatives

Cooperating

agencies

Several

Off-grid focus areaAll technologies

Target impact

(All Africa)

▪ Increase on-grid generation capacity by

160 GW by 2025

▪ 130 M new on-grid connections by 2025

▪ 75 M new off-grid connections

▪ Increase access to clean cooking energy

for 130 M households

Program

pillars

The program is founded on seven

strategic themes:

i. Establish an enabling policy

environment

ii. Enable utility companies for success

iii. Increase the number of bankable

energy projects

iv. Increase the funding pool to deliver

new projects

v. Support ‘bottom of the pyramid’

energy access programs

vi. Accelerate major regional projects

and drive integration

vii. Rolling out waves of country-wide

energy ‘transformations

Program

description

▪ The project is a partnership-driven effort

to achieve universal access to energy

across the continent by 2025

▪ The AfDB is working with several

stakeholders to develop a

Transformative Partnership on Energy

for Africa a platform for public-private

partnerships for innovative financing

in Africa’s energy sector.

SOURCE: Project brochure AfDB Link; Project strategy document Link

Support type


Program Overview1

CTAP F

1 Includes Africa-wide project details


https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/Brochure_New_Deal_2_red.pdf

https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/Bank_s_strategy_for_New_Energy_on_Energy_for_Africa_EN.pdf

29

DFID: CLEAN ENERGY PROGRAM/AFRICA

ENERGY COMPACT

Duration

Actions in the Compact agreement to be

implemented over a 5 year timeframe (to

be determined)

Budget

Varies (Funding available from a range of

DFID energy programs to support the

implementation of the Energy Africa

Compact1)

Supported

agencies

REA, Office for Promoting Private Power

Investment (OPPPI), ERB, ZABS

Cooperating

agencies

Energy Africa, Zambia Development

Agency, Ministry of Energy

Off-grid focus areaAll technologies (some emphasis on SHS)

Program

descriptionTarget impact

(Zambia)

Universal energy access by 2030

▪ The compact seeks to

accelerate expansion of the

SHS market

▪ It is a voluntary action plan

(detailed below) between Energy

Africa partners, DFID and the

Government of Zambia on policy

actions and support needed to

accelerate the SHS market

Major actions

1. Develop off-grid targets, create

off-grid task force and conduct

economic analysis on job creation

2. Finalize RE strategy

3. Extend tax exemptions to SHS

products

4. Provide capacity support to ZBS/

ERB

5. Develop scheme for certifying

SHS installers

6. Establish the Solar Association

7. Encourage supply of off-grid solar

products

8. Support financing products for

SHS

SOURCE: DFID Energy Africa Compact

Support type


Program Overview

1 Example- DFID's Africa Clean Energy programme (ACE) which will support SHS markets in Africa (£43m, 2016-21) shared between 14 countries inc. Zambia. This will fund: 1) TA 2) Finance for

SHS businesses 3) Support for private investment into the sector

TAP F


30

DFID: AFRICA ENTERPRISE CHALLENGE FUND

DurationOngoing (commenced 2012)

Budget

▪ Total investment portfolio of USD 10 M

▪ Funding to businesses ranges from

USD 0.25 M to USD 1.5 M

Supported

agencies

Private-sector actors in SHS market

Cooperating

agencies

Africa Enterprise Challenge Fund (AECF);

Several European governments,

Consultative Group to Assist the Poor and

IFAD

Off-grid focus areaSHS, mini/ microgrids, power generation

through all renewable energy sources

Target impact

(All Africa)

Drive innovation in companies having the

potential to build off-grid stand - alone solar

household systems, affordable to people

and businesses in rural areasProgram

description

Primary objectives

▪ Support low-cost sources of

renewable energy

▪ Increase access to end-user

financing for clean energy

▪ The program invests in

enterprises active in the SHS

market or have a strategic

orientation towards these

markets

▪ The fund provides catalytic

funding as grants or zero

interest loans to private sector

businesses that have a positive

impact on rural poor in Sub-

Saharan Africa

SOURCE: Project website- Link

Support type


Program Overview1

F

1 Includes Africa-wide project details


https://www.aecfafrica.org/portfolio/renewable-energy

31

EUROPEAN UNION: INCREASED ACCESS TO ELECTRICITY AND

RENEWABLE ENERGY PRODUCTION (IAEREP)

SOURCE: CP Activities matrix; Discussion with EU Delegation (Mar 2018)


1 EU seconded a long-term advisors managing a pool of short term experts for project preparation and management support

Program Overview

Primary objectives

▪ Support public institutions to

develop regulatory framework

for renewable energy

▪ Provide capacity building to

public and private sector to

deploy RE solutions

▪ Support off-grid RE projects in

rural areas. Call for proposals

to demonstrate sustainable

PPP business models in RE

mini-grid development

(primarily hydro, solar PV and

hybrid systems)

Program

description

▪ The project is the EU’s portfolio

of support in the Zambian off-

grid sector using the 3 pillars

(detailed below)

Support type CTAP F

Target impact

(Zambia)

▪ Additional > 50,000 rural households

and >500 businesses with access to off-

grid electricity

Budget

▪ EU provides EUR 40 M (investment

grant to private sector: EUR 25 million)

▪ Private-sector co-financing expected to

reach > USD 25 M

Supported

agencies

▪ Private-sector (financing)

▪ Public-sector (regulatory and capacity

building support incl. ERB and REA1)

Cooperating

agencies

▪ Several

Duration

▪ 7 years (2016-2022)

Off-grid focus area

▪ Mini-grids powered by hydro or

solar/hybrid PPP


32

ELECTRIFI – ZAMBIA WINDOW


1 In the form of development finance, debt, quasi-equity, equity and guarantees

Duration

2017-2024

Budget

▪ EUR 40 M

▪ Individual project funding ranges from

USD 0.5 to 10 M1

Supported

agencies

Private-sector actors

Cooperating

agencies

Various Development Finance Institutions

Off-grid focus areaAll technologies

Program

description

Support type F

Target impact

(Zambia)

To increase access to reliable and

sustainable energy, with a focus on rural

areas in emerging and developing

countries

Primary objectives

Contribute to the growth of viable

businesses and projects that

create new connections to

reliable and sustainable energy

The project supports private

sector investments to bring

access to clean energy in

underserved areas in Zambia

Activity in Zambia

Elaboration of country Investment

strategy. Call expected to be open

in the second part of 2018

SOURCE: Project website- link

Program Overview


https://www.africa-eu-renewables.org/_funds/electrifi/

33

EUROPEAN UNION: RENEWABLE ENERGY COOPERATION

PROGRAM (RECP) FinancingFPolicy supportP Other technical assistanceTA Capacity buildingC

1 Includes grants, repayable grants, results-based financing, debt, equity, quasi-equity, guarantees, mezzanine capital

Duration

10 years (2011-2020)

Target impact

(Zambia)

▪ 10,000 MW of hydropower facilities

▪ 5,000 MW of wind power capacity

▪ 500 MW of solar energy capacity

▪ Tripling capacity of other renewables

Budget

▪ Nearly 40 funding instruments1 across

African economies ranging between

USD 0.1- 50 M

▪ Total financing need > ~ EUR 20 B

Supported

agencies▪ Several private agencies across Africa

▪ REA in Zambia (detailed below)

Cooperating

agencies

Several (incl. Austrian, Finnish, German

Italian, and Dutch ministries); GIZ

implementing

Off-grid focus areaAll renewable technologies

Primary objectives

(1) Increase access to energy

(2) Improve security of energy

supply

(3) Protect the environment

Program

description

▪ The RECP is a multi-donor

program that supports the

development of markets for

renewable energy in Africa

▪ This includes the provision of

information on energy markets,

identification of project

opportunities, matchmaking

between project developers,

technology suppliers, and service

providers for joint project and

business development and

facilitating access to finance

Activity in Zambia

Evaluating investee companies in

Zambia (to-date, 1 company has

reached final stage)

Support type CTAP

SOURCE: RECP Strategy 2020; Discussion with EU Delegation (Mar 2018)

Program Overview (includes Africa-wide project support)


34

SIDA AND USAID (POWER AFRICA): BEYOND THE GRID FUND

FOR ZAMBIA (BGFZ) FinancingFPolicy supportP Other technical assistanceTA Capacity buildingC

1 Additional funds raised through co-financing; an additional 16.9 MUSD are under negotiation

Duration

5 years (2016-2020)

Budget

▪ USD 11.5 M from BGFZ

▪ Additional USD 17.7 M by Energy

Service Companies1

Supported

agencies

▪ Energy Service Companies

Cooperating

agencies

USAID; REEEP (implementing agent)

Off-grid focus areaSHS; Mini-grid

Program

description

Support type F

SOURCE: Project Website- link

Target impact

(Zambia)

Providing market-based off-grid

electricity to 1M Zambians in rural/ peri-

urban areas

Primary objectives

Incentivize and catalyze market

entry and scale-up of market-

based solutions for off-grid

electricity provision to 1 M

Zambians in rural and peri-urban

areas by working with carefully

selected off-grid Energy Service

Providers (ESPs)

A results-based “impact

procurement” fund for “energy

service subscriptions” – pre-defined

long-term energy services to end

customers. The Fund does not

directly procure energy services on

behalf of customers. Instead, the

fund closes the “viability gap”

on a per-connection basis,

incentivizing rollout and scaling up

in areas that would not represent

viable markets for companies.

Program Overview


https://www.reeep.org/bgfz

35

USAID: SOUTHERN AFRICA ENERGY PROGRAM (SAEP)

Duration5 Years

Target impact

(11 countries in

Southern Africa)

Budget

USD 70 M

Supported

agencies

REA, Ministry of Energy

Cooperating

agencies

Deloitte, Another Option, CrossBoundary,

Worley Parsons

Off-grid focus areaSHS, Mini-grid

Support type

▪ 3,000 MWs of new power generation

▪ 1,000 MWs of new transmission capacity

▪ 3 M new connections

Program

description

Primary objectives

SAEP will address five key

constraints to energy sector

investment, including:

(1) Ineffective regulation, planning

and procurement for energy

(2) Low commercial viability of

utilities

(3) Limited regional harmonization

and cross border electricity

trade

(4) Lack of demonstrated and

scaled clean and renewable

energy technologies and

practices

(5) Weak institutional and human

resource capacity for energy

sector management.

The Southern Africa Energy

Program (SAEP) seeks to increase

investment in electricity supply and

access in Southern Africa by

strengthening the regional enabling

environment and facilitating

transactions


Program Overview

CTAP

SOURCE: SAEP Workplan


36

THE WORLD BANK: ELECTRICITY SERVICE ACCESS

PROJECT – OFF-GRID ACCESS EXPANSION (COMPONENT B)

Duration7 years (2017 to 2023)

Target impact

(Zambia)

Budget

5.9 MUSD for off-grid electricity expansion

(total project cost of ~ USD 37 M)

Supported

agencies

Government of Zambia, REA, ZESCO

Cooperating

agencies

SIDA (co-financing) Development Bank of

Zambia, MoE (oversight through Project

Steering Committee)

Off-grid focus areaMini-grid and SHS

Program

description

Support type

22,000 connections (both on and off-grid)

Primary objectives

Enable private-sector participation

in off-grid electrification

▪ The project will fund upstream

activities to enable private-

sector participation in the off-

grid market.

▪ Supporting activities include:

– Identifying and scoping off-

grid sites

– Helping the GRZ address

existing regulatory

impediments

– Building capacity at key

institutions

– Designing financial

mechanisms

▪ The component will also fund the

pilot of two finance mechanisms

to support private-sector

electrification through mini-grids

and SHS:

– Smart Grant Subsidy Facility

– Loan Facility

SOURCE: Electricity Service Access Project (Project Appraisal Document)


Program Overview

CTAP F


37

CONTENTS








▪ SAEP support to date

▪ Next steps for SAEP

38

Diagnostic

results are

as of April

2018

WE HAVE SYNTHESIZED INPUTS FROM 35 INTERVIEWS AND 10

REPORTS ACROSS THE OFF-GRID SECTOR

35 stakeholder interviews have been completed to date…

… supplemented by various

recent reports

4

8

7

35

16

PlannedCompleted Example recent reports

▪ ENEA 2016: Developing Mini-

grids in Zambia: How to build

sustainable and scalable

business models?

▪ World Bank 2017: Zambia,

electricity access project

▪ World Bank/ ESMAP/

SE4ALL 2017: State of

electricity access

▪ World Bank/IEA 2017: Global

tracking framework, progress

toward Sustainable Energy

▪ Lighting Global/World

Bank/ESMAP 2018: Off-Grid

Solar Market Trends Report

▪ RECP 2030 Strategy: Rural

electrification with renewable

energies in East Africa

▪ IRENA 2014: Mini-grid policy

toolkit

▪ Bloomberg new energy

finance report 2016

▪ AfDB: The Bank’s Strategy for

the New Deal on Energy for

Africa

▪ DFID: Africa Energy Compact

DFID

IFC

REEEP

USAID

AFDB

EU

SIDA

World Bank

Donor/DFI

Radian

Rent-to-Own

Solar Village

Standard Micro-grid

Sunray Power

Company

Sustain Power

Zengamina Power

Ltd

Fenix Intl

Suntech

Sunny Money

SupaMoto

Muhanya

Solar

Vitalite

Id Solar

Solutions

Smart Village

Greenheart

SHS & mini-

grid

providers in

Zambia

CrossBoundary

mKopa

SIAZ

ZARENA

Sunfunder

TomorrowVentures

Africa Enterprise

Challenge Fund

AHL Venture

Partners

Other

SOURCE: Interviews

Ministry of Energy

ZRA

ERB

REA

Government

agencies

ZABS

APPENDIX B: INTERVIEWS AND REPORTS USED TO DATE