solar energy : a means of survival within …...2018/10/03 · rural and peri-urban households...

YEMENSOLAR ENERGY : A MEANS OF SURVIVAL WITHIN

CONFLICTOctober 03, 2018

1. Background Information

Yemen : Mopic – Shuaib Alzaghir1

2 Sources: WB Yemen DNA (2017)

Damage to critical electricity infrastructure in Taiz

Trucks carrying diesel fuel are blockaded from Bayhan

The lack of electricity is becoming a

binding constraint for critical service

facilities

Water,

Sanitation

& Hygiene

Health Education Food

supply

The impact on rural and peri-urban

areas is particularly acute due to:

High vulnerability even pre-

conflict

Reliance on agriculture for

livelihoods

Fuel scarcity

Context: The impacts of the collapse of public electricity services

have been devastating

Yemen : Mopic – Shuaib Alzaghir

3

Context: Solar power has emerged as a key coping mechanism for

better-off households, farmers and businesses

Solar panels for residential use for sale in Sana’a

Small household systems in Sana’aSolar irrigation in Hadramawt

• Booming solar local market across

the country, with access to PV

systems reaching around 50% of

households in rural areas and 75%

in urban areas, translating over

one billions USD

• Private sector driven investment

in PV systems for residential

sector alone over the past five

years, with huge untapped

potential in many other sectors.

Sources: WB Yemen DNA (2017), RCREEE 2017Yemen : Mopic – Shuaib Alzaghir

2. Sectors Assessment in Yemen

4

Eight sectors have been

investigated, of which five sectors

were prioritized based on a defined

set of criteria

Source: RCREEE 2017Yemen : Mopic – Shuaib Alzaghir

POTENTIAL MARKET IN THE PRIORITIZED SECTORS

• All these sectors are Currently benefiting from Development Partners & Private sector investment support to scaling up Solar PV in Yemen.

• Research shows that the technical potential of solar PV market in varioussectors in Yemen could trigger a multibillion market, sustaining the PV businessfor at least two decades to come.

• Additional benefits would be the large job creation potential (solar PV suppliers,technical experts, capacity building, maintenance and operation, etc.) and theconsolidation of the sector’s value chain.

5 Yemen : Mopic – Shuaib Alzaghir

3. Challenge: Solar still remains unaffordable for many, especially outside of

urban centers and for critical service facilities in WASH, health, education, etc.

6

Affordability a barrier for many rural households, health, WASH and education

Quality of products & aftersales service a concern

Access to finance key barrier along supply chain

Different Development Partners provide financing and technical assistance to

expand reach and sustainability of solar market in Yemen


4. FINANCING MECHANISMS OF PV PROJECTS

• Private Savings

• Potential banks/MFIs already executed some solar PV projects

• Small Enterprise Development Fund (SEDF):

• Local Donations for Solar PV Systems

• Business Models By Development Partners

7


UNDP Business Model

8

World Bank Model of Financing: IDA grant that aims to expand access to

electricity and electricity-dependent services in Yemen through distributed

solar solutions

9

Improve access to electricity in rural and peri-urban areas within

the Republic of Yemen

Project

development

objective

Beneficiaries

Activities

Subcomponent 1.2:

Restoring Electricity

Supply to Critical Services

Facilities

Subcomponent 1.1:

Providing Basic

Electricity Supply to

Households

Component 1: Financing for Off-grid Solar (42$M)

Subcomponent 2.3:

Market

development

Component 2: Market

Development (8$M)

1,200 critical service facilities

in rural and peri-urban areas

200,000 rural

and peri-uban

households

Solar value

chain

$


Principles: The Project supports private-sector driven delivery of

infrastructure, building on the mechanisms that are already working

The project builds on the following five principles:

1. Decentralized service delivery model for post-conflict context, drawing on experience

from similar projects done in FCV or low access countries

2. Building on supply chains and institutions that have proven resilient in conflict

(financial sector and entrepreneurs)

3. Building on the reach of the local private sector supply chain to cover all of Yemen

4. Collaborating with UN partners that are active on the ground and building on

experience from previous IDA-UN projects

5. Creating a scalable model that can be expanded to include other FIs and other sectors

10 Yemen : Mopic – Shuaib Alzaghir

Implementation arrangements: UNOPS is implementing agency of the

project and engages MFIs and solar contractors to reach beneficiaries

11

WB suspended its operations in

Yemen in early 2015

With escalation of conflict, security

situation, the World Bank can no

longer ensure adequate oversight of

its projects in Yemen

UN Office of Project Services (UNOPS)

provides on-the-ground implementation

Maintained and expanded local presence in

Yemen

Leverage and work with existing, private-

sector driven solar value chain

Incredible resilience during conflict –

particularly micro-finance institutions

(MFIs)

Private sector has large geographical reach

Goal is to crowd-in, not replace, private

finance


Implementation arrangements: UNOPS is implementing agency of the

project and engages MFIs and solar contractors to reach beneficiaries

12

World Bank

UNOPS

(implementing agency)

Local partners

IDA grant

EngagesRural and peri-

urban households

Solar for critical

service facilities

Microfinance

institutions

Technical

service

providers

Solar supply

chain

Other local

stakeholders

Solar equipment,

finance and technical

assistance

Beneficiaries of general

market strengthening

$


Project component 1.1 will help MFIs set up subsidized financing windows for

household-scale solar to provide basic electricity service to households

13

Problem Solution

• Provide partial grants

• Establish financing channelsAffordability constraints and no access to debt

Unavailability of quality solar kits (private sector has not

focused on this segment)Introduce high-quality pico-solar products into the

market

Financing

Grant

World Bank

UNOPS

MFIs

in collaboration with retailers

IDA grant

Solar importers

Beneficiary

contribution

Rural and peri-

urban households

Equipment


Project component 1.2 will provide solar systems to rural health clinics and

schools on a grant basis to restore electricity access to critical services

14

Problem Solution

Public service facilities have no means of financing solar

systems

Grant-based provision of solar systems initially focused on

health clinics and schools

Inclusion of rural water and electricity corporations at a

later stage

“Mainstreaming” of aftersales services and quality standards

Procurement Solar systems and

service providers

Solar systems

and services

World Bank

UNOPS

IDA grant

Health clinics,

schools, and so on

Beneficiaries


Project component 2 will provide capacity building and technical

assistance to strengthen the commercial solar market

15* Conditional on risk assessment & PSW approval

Problem Solution

Low quality of products and lack of after-sales services

Limited awareness of solar solutions

Limited access to debt for

Firms in solar value chain

Potential solar PV users (farmers, households,

businesses)

Technical assistance and capacity building to firms

along solar value chain

Technical standard definition and dissemination in

cooperation with local institutions

Awareness campaigns

Procurement Technical Service

ProvidersUNOPS

Market Development

Communication,

Third-party

monitoring,

technical services

Solar supply chain

and MFIs

Project

implementation

and market

support

World Bank

IDA grant

Solar for critical

service facilities

Beneficiaries of general

market strengthening

Rural and peri-urban

households


Thank you! شكرا ً

solar energy : a means of survival within …...2018/10/03 · rural and peri-urban households...

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