'Cleanenergyforall’Theimplementa4onofScalingSolarinZambia

Dr.SusannStritzkeResearchAssociateRenewableEnergyWASDConference,London,04/12/2017

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WHO WE ARE

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Establishedin2008throughthegenerositybySirMar4nSmithandhisfamily,aGachedtotheSchoolofGeographyattheUniversityofOxfordWebelievethattoaddressclimatechangeandenvironmentalsustainability,itisessenNaltobringbusinessintotheconversaNonWeseektoapplyimpacAulresearchtodevelopinnova4vesolu4onsforthechallengesfacinghumanityandthemodernfirmProject:‚MakinglightWork’-fundedbytheBriNshAcademytoevaluatesuccessfactorsfortheimplementaNonofScalingSolar–aprogrammedevelopedbytheWorldBank

ENERGY SITUATION IN ZAMBIA

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ZambiaElectricityProfile

31%Accesstoelectricity

2GWInstalledcapacity(+/-)

83%Hydro-power

GovernmentofZambia(GRZ):UniversalelectricityaccessforallZambiansby2030

99%State-ownedgeneraNon,transmission&distribuNon(Zesco)

ENERGY SITUATION IN ZAMBIA

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Lowelectrifica4onrate

Hydrodependency-Climatechange

Powerdeficit(est.2016:600-1000MW)

Privateinvestmentinthepowersector(IPPs)isyetverylimited

Highfinancingcosts

SCALING SOLAR

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ProgrammedesignedbyWorldBank/IFCtofacilitateprivately-fundedon-gridphotovoltaic(PV)energyprojects

OffersarangeofWorldBankresources&servicesina“one-stopshop”packagetogovernments(advisoryservices,standardizedcontracts,stapledofferoffinancing,guaranteesandinsurance...)

Goal:Nme-andcost-efficientimplementaNonofuNlityscalesolarpvprojects

Procurementprocess:selecNonofdevelopersthroughreverseenergyaucNon

Firstrolled-outinZambia;furtherimplementaNoninEthiopia,SenegalandothercountriesinSSAplanned

SCALING SOLAR IN ZAMBIA

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•  FirstsolarPPPinZambia

•  Launched2015-iniNatedaferadirecNvebytheZambianPresidentEdgar

LungutotheZambianIndustrialDevelopmentCorporaNon(IDC)toprocure600MWofsolarpowerinordertoovercomethenaNonalenergycrisis

•  ProjectshavebeenpreparedandaucNonedbyIndustrialDevelopmentCorpora4onZambia(IDC,100%SOE)incooperaNonwithIFC

•  RoundI:2solarPVprojectstendered(52MW/34MW)

•  Tariffsachievedconsideredtobebenchmarkintheregion(6US$ct,Neon/FirstSolar&7,8US$ctperkWh,ENELGreenPower)

•  Bidderswerenotinvolvedinprojectdevelopment

SCALING SOLAR IN ZAMBIA

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TheWorldBank.(2017).ProjectappraisaldocumentonaproposedIDAguarantee(...)andonaproposedIFCfinancing(...)toBangweuluPowerCompanyltd.fortheWestLungaScalingSolarenergyproject.Retrievedfrom<hGp://documents.worldbank.org/curated/en/974771487473237766/pdf/PAD-01302017.pdf>

CURRENT PROJECT STATUS

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✓✓✓⌛🤷#Projectsarecurrentlyapprox.10monthsdelayed

CRITICAL SUCCESS FACTORS

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Adequateriskalloca4on&sharing

ScalingSolar:riskmanagement&

creditenhancement

package

Poli4calriskinsurance

provided&par4alriskguarantees

Experienced&solid

privatesectorpar4cipants

ScalingSolar:comprehensive

technical,financial&legalcriteriaforbidderssetbyRFQ

process

Biddersmustdemonstratesubstan4alexperienceindeveloping,

construc4ng&opera4ngPVpowerplants

Poli4calsupport

ScalingSolar:presiden4aldirec4ve&

structureofIDC(SOE);high

poli4calurgency

Public&communitysupport

ScalingSolar:stakeholder

consulta4ons-noimmediateopposi4on

Transparentprocurement

ScalingSolar:highdegreeof

transparency,selec4onof

biddersbasedonanauc4on

scheme,allbidsannounced

Research:MainCSFsfortheplanning&implementa4onphaseofPPPs*

*Osei-Kyei,R.,andChan,A.P.C.(2015),"ReviewofstudiesonthecriNcalsuccessfactorsforpublic-privatepartnership(PPP)projectsfrom1990to2013",Interna'onalJournalofProjectManagement,Vol.33No.6,pp.1335–46

✓

✓

✓

✓

✓

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FINDINGS ZAMBIA

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4.PublicandcommunitysupportNumberfourintherankingoftheCSFsidenNfiedbyOsei-KyeiandChan(2015)relatestopublicandcommunitysupportfortheimplementaNonofPPPprojectsaspublicopposiNoncandelayPPPprojects,forexamplewithregardtolandacquisiNon(ibid).TheScalingSolarprogrammeisaimedatpromoNngpublicandcommunitysupportfortheprojectsofroundonebyfacilitaNngmeeNngswithlocalcommuniNesimmediatelyaffectedbytheimplementaNonoftheproject,forexamplebyrelocaNonmeasures,andbroaderpublicconsultaNons.TheseconsultaNons,whichrevealedmainlyconcernswithregardtocommunitybenefitsoftheprojectbutnoimmediateopposiNon,resultedinastakeholderengagementplan(SEP)forthosegroupsthatarecloselyaffectedbytheprojectandthecommitmentofthedevelopertoestablishaCommunityDevelopmentPlantoaddressresidualsocialrisksbyprovidingcommunity-levelbenefits(Neoen,2016).5.TransparentprocurementAfifhmajorCSFforimplemenNngPPPprojectsisthetransparencyoftheprocurementprocess,whichprovidestraceabilityofoutcomesoftheselecNonprocessthatcanbeachievedthroughopennessandcommunicaNonamongstakeholdersandthepublic(Liet.al.,2005).AlackoftransparencycanresultinpublicopposiNontowardstheimplementaNonofaprojectwhichinturncancausedelays(Osei-KyeiandChan,2015).TheanalysisoftheprocurementprocessduringroundoneoftheScalingSolarProgrammeinZambia,whichwasatwostageprocess,revealsahighdegreeoftransparency.AllrelevantinformaNonincludingtheselecNoncriteriaandthenamesofthepre-qualifiedbidderswaspublishedduringstageonewhichcomprisedtheRFQ.ThesecondstageoftheprocessentailedanRFPprocessandtheselecNonofthewinningbidderswasbasedonanaucNonscheme.Accordingly,thetwoprojectsofroundonewereawardedtothelowestbiddersandtheirposiNoningamongallcompeNngbidsoftheprocesswaspublished.ThediscussionshowsthatthedesignandtheapproachoftheScalingSolarprogrammecouldlargelymiNgatethefivemostcentralrisksthatwereidenNfiedbystudieswithregardtotheimplementaNonofPPPprojectsandthusonlyprovidealimitedexplanatoryapproachforthecurrentdelayoftheimplementaNonofScalingSolarroundoneinZambiaisexperiencing.6.Publicstakeholderalignmentandins'tu'onalcapacityStakeholderinterviewswithregardtothecurrentstatusoftheimplementaNonphaseofScalingSolarroundoneinZambiareveal,thatthecurrentdelayismainlyaquesNonofgovernmentalstakeholderalignmentamongthosebodies,whichfacilitatetheimplementaNonoftheprogrammeinZambia.ThepersistenceofunresolvedissuesandpreviouscoordinaNonprocessesamongpublicstakeholders,e.g.withregardtotheprojectsitewhichwasallocatedbythegovernmentortheenergypolicyframework,impactthefinancialcloseoftheprojectwhichhasnotyetbeenachieved.TheseissuesaremainlyrootedinthecomplexityofsuchaPPPandthenumberofstakeholdersinvolved(stakeholderalignment).TheyarealsorelatedtolimitaNonsintermsofinsNtuNonalcapacityamongthepublicstakeholdersinimplemenNngthefirstlarge-scalesolarpvprojectsduetoalackofunderstandingofthespecificrequirementsthatsuchadevelopmentimposes,forexamplewithrespecttotheprojectsite,orspecificregulatoryissues.

Publicstakeholderalignmentandins4tu4onalcapacity

CurrentdelaymainlyaquesNonofgovernmentalstakeholderalignmentamongthosebodies,whichfacilitatetheimplementaNonoftheprogrammeinZambia:

•  Persistenceofunresolvedissues&lackofpreviouscoordinaNonprocessesamongpublicstakeholders

•  RootedinthecomplexityofsuchaPPP&thenumberofstakeholdersinvolved(stakeholderalignment)

•  LimitaNonsintermsofinsNtuNonalcapacityamongthepublicstakeholdersinimplemenNngthefirstlarge-scalesolarpvprojectinZambia-lackofunderstandingofthespecificrequirementsthatsuchadevelopmentimposes,forexamplewithrespecttotheprojectsite,orspecificregulatoryissues(grid-code).

PublicSector

Speedvs.Prepara4on:PublicstakeholderalignmentandinsNtuNonalcapacitybuildingatpre-implementaNonstage‘Neutral’coordina4on:interrelaNonshipsbetweenprocurer&SPVshareholders>potenNalconflictofinterest>independentunitcoordinaNngtheprocess(PPPUnit)

PrivateSector

Conserva4venessvs.Riskappe4te:ConsiderdataaccuracyasapotenNalrisk-factorandinclude‘error’marginsinthebiddingstrategy;calculateNmedelay

‘CleanEnergyforAll’

Bigvs.Small:ReconsideraNonofuNlityscaleenergyprojectsassoluNontoachieveSDGs-FocusonthestrategicimplementaNonofdecentralizedsmallandmediumscaleREprojectsandtheregulatoryframeworkthatenablessuccessfulprojectdevelopmentintheon-grid(e.g.net-metering)andoff-gridsector

LEARNING LESSONS

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ThankYou!susann.stritzke@smithschool.ox.ac.uk

LITERATURE

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Osei-Kyei,R.,andChan,A.P.C.(2015),"ReviewofstudiesonthecriNcalsuccessfactorsforpublic-privatepartnership(PPP)projectsfrom1990to2013",Interna'onalJournalofProjectManagement,Vol.33No.6,pp.1335–46.Rockart,J.F.(1982),"ThechangingroleoftheinformaNonsystemsexecuNve:AcriNcalsuccessfactorsperspecNve",SloanSchoolofManagement,pp.3–13

5. CONCLUSION

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LEARNING LESSONS

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Government/PublicActors

• Speedvs.Prepara4on:PublicstakeholderalignmentandinsNtuNonalcapacitybuildingatpre-implementaNonstage‘Neutral’coordina4on:interrelaNonshipsbetweenprocurer&SPVshareholders>potenNalconflictofinterestmightaffectlevelsoftrustamongstakeholders>independentunitcoordinaNngtheprocess(PPPUnit)

PrivateActors/Developers

• Conserva4venessvs.Riskappe4te:ConsiderdataaccuracyasapotenNalrisk-factorandinclude‘error’marginsinthebiddingstrategy;calculateNmedelay

ImplementaNonoftheSDGs

• Bigvs.Small:ReconsideraNonofuNlityscaleenergyprojects;FocusonthestrategicimplementaNonofdecentralizedsmallandmediumscaleREprojectsandtheregulatoryframeworkthatenablessuccessfulprojectdevelopmentintheon-grid(e.g.net-metering)andoff-gridsector

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1. MAPPING THE ENERGY CHALLENGES IN SUB-SAHARAN AFRICA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Sub-SaharanAfrica

Botswana

Ghana

Kenya

Malawi

Niger

SouthAfrica

Zambia

Zimbabwe

RuralelectrificaNonrate

UrbanelectrificaNonrate

NaNonalelectrificaNonrate%

hGp://www.worldenergyoutlook.org

Energyaccess:urbanvs.ruralareas

17hGp://data.worldbank.org

0 2000 4000 6000 8000 10000 12000 14000

Niger

Ethiopia

Nigeria

Congo,Rep.

Ghana

Mozambique

Sub-SaharanAfrica

Zimbabwe

Zambia

Namibia

Botswana

EastAsia&Pacific

SouthAfrica

EuropeanUnion

UnitedStates

kWh

Electricpowerconsump4on(kWhpercapita)2014

1. MAPPING THE ENERGY CHALLENGES IN SUB-SAHARAN AFRICA

THE ELECTRICAL GRID

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ENERGY DEMAND VS. SUPPLY IN ZAMBIA

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3. CRITICAL SUCCESS FACTORS

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Cri4calSuccessFactors(CSFs)forPublicPrivatePartnerships

CSFs=‘keyareasofac4vitynecessarytobefocusedtoensurecompe44veperformancetowardsanorganisa4on’sstrategicgoals'(Rockart,1982)

Empiricalresearchiden4fieddifferentCSFsfordifferentstagesofPPPprojects

Studyiden4fied5mainCSFsfortheplanning&implementa4onphaseofPPPs(Osei-Kyei&Chan,2015)