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IMPRINT Editor:

Susann Stritzke (Smith School of Enterprise and the Environment / University of Oxford) Project Principal Investigator:

Vanesa Castan Broto (University of Sheffield) Contributions:

Long-Seng To (Loughborough University), Therese Rudebeck (University of Oxford), Elena Pierard (University of Oxford), Andrew Scott (Overseas Development Institute), Philipp Trotter (University of Bath), Nick Geddes (ESP Consulting), Andrea Micangeli (University of Rome) Photos:

Following pages: Kim Schumacher, Susann Stritzke, Andrea Micangeli Layout & Design:

Andrew McCarthy (Smith School of Enterprise and the Environment / University of Oxford) Smith School of Enterprise and the Environment / University of Oxford; 2018

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TABLE OF CONTENTS

INTRODUCTION.....................................................................................................................................................4

THEBRITISHACADEMYPROJECT‘UNINTENDEDIMPACTSOFLOWCARBONDEVELOPMENTSINAFRICA’...........................................................................................................................5

THERENEWABLEENERGYSECTORINZAMBIA:OVERVIEWANDOPPORTUNITIES..........6

'MAPPINGSYNERGIESANDTRADE-OFFSBETWEENENERGYANDTHESUSTAINABLEDEVELOPMENTGOALS'.....................................................................................................................................9

'POWERSYSTEMOPTIMISATIONINUGANDA:TRADINGOFFCOSTS,CARBONEMISSIONSANDSUB-NATIONALINEQUALITY'..................................................................................10

'THEOFFGRID-TRAININGACADEMYINEASTAFRICA'..................................................................12

'THEPOTENTIALROLEOFNGOsINFACILITATINGSUSTAINABLEELECTRIFICATION'13

THEROLEOFPPPsINTURNINGTHELIGHTSONINAFRICA.......................................................15

'THEECONOMICSOFREOFF-GRIDPROJECTSINAFRICAANDTHE‘MULTIUTILITY’CONCEPTASAFUTUREOPPORTUNITY’................................................................................................17

'LEARNINGLESSONSANDSTRATEGICIMPLICATIONSFROMFOUROFF-GRIDPROJECTSINAFRICA..............................................................................................................................................................19

'REPROJECTFINANCINGINAFRICA–CHALLENGESANDOPPORTUNITIES'......................21

'FROMAPILOTPROJECTTOAVIABLESCALABILITYOFTHEMINI-GRIDSINRURALAfrica'......................................................................................................................................................................23

'CONTEXTAS‘KINGMAKER’–AFRAMEWORKFORSUCCESS’.....................................................24

'SUSTAINABLEENERGYACCESSINMOZAMBIQUE'..........................................................................27

'ON-GRIDvs.OFF-GRID:RESULTSFROMTWORESEARCHPROJECTSONREIMPLEMENTATIONINSSA'...........................................................................................................................29

REFLECTIONSANDSUMMARY....................................................................................................................33

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INTRODUCTION Universal access to clean and affordable energy by 2030 is one of the goals of the United Nations' sustainable development agenda (SDG7). Technological improvements, falling costs for solar PV components, decentralized solutions, digital platforms and enhanced efforts by the private and public sectors have facilitated the implementation of renewable energy (RE). Rates of access to clean energy have improved dramatically, especially in Asia.1 As a result, the global electrification rate grew from 75% to 87% between 1996 and 2016.2 However, one in seven people globally still lack access to electricity.3 Electrification rates in Sub-Saharan Africa remain on a low level and it is estimated that 600 million people in the African continent have no regular access to electricity. There is also an enormous gap between rural and urban population in terms of electricity access. People in rural areas lack the opportunities that electrification provides both in terms of improving wellbeing and accessing livelihood opportunities. In urban areas, many sectors of the population which have physical access to the grid may not be able to access it because it is not affordable or because they face institutional constraints related to the conditions of habitation and land tenure. Achieving the SDG 7 in Africa depends on multiple factors including the political economy of resource extraction, financial models available, local market development, operational and maintenance questions, social preferences and practices, regulatory frameworks and institutional capacity. The workshop on "Practical Challenges of Sustainable Electrification in Africa“, organized by the Smith School of Enterprise and the Environment/University of Oxford and the Urban Institute of the University of Sheffield had the objective of developing a multi-dimensional perspective on electrification in Africa. The workshop adopted an interdisciplinary approach bringing together industry experts, researchers, policymakers and NGOs who engaged actively in the discussion of how the SDG 7 can be achieved for Africa. A panel of international experts shared their first-hand experience with regard to energy projects in Africa. This was followed with a strategic discussion including central learning lessons as well as future policy implications. The workshop revealed the realities of on-grid and off-grid electrification as experienced in ongoing projects and the potential to learn from existing initiatives. © Susann Stritzke, Vanesa Castan Broto

1 https://www.iea.org/access2017/ 2 Worldbank: www.data.worldbank.org 3 http://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-7-affordable-and-clean-energy.html

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THE BRITISH ACADEMY PROJECT ‘UNINTENDED IMPACTS OF LOW CARBON DEVELOPMENTS IN AFRICA’ The workshop was held as part of the project ‘Unintended impacts of low carbon developments in Africa.’ The objective of this project is to understand the unintended impacts of low carbon development in Africa, from a regional perspective. The project addresses Sustainable Development Goal 13 (Climate Action) and its interactions with SDG7 (Affordable Clean Energy). This project has been funded by the British Academy as part of the Sustainable Development Programme. The Sustainable Development Programme is one of the streams of funded of the UK’s £1.5 billion Global Challenges Research Fund (GCRF). The objective of the GCRF is to align research objectives with the UK’s aid priorities and the advancement of the UK’s Overseas Development Assistance priorities. The Sustainable Development Programme of the British Academy focuses on addressing challenges that emerge in relation to the Sustainable Development Goals. The project brings together two research teams funded separately through the Sustainable Development Programme. The project “Sustainable Energy Access in Mozambique: Socio-political factors in conflict-laden urban areas” (PI: Castán Broto, University of Sheffield) aims to understand the social and political conditions that constrain universal energy access in urban areas in Mozambique, focusing in the underlying conflicts related to energy provision. The project “Making Light Work” (PI: Alex Money, University of Oxford) evaluates the IFC’s Scaling Solar programme, and its capacity to improve digital inclusion. Both projects engage with SDG13 (Climate Action) as it interacts with other key goals, including SDG7 (Affordable and Clean Energy), SDG9 (Industry, Innovation and Infrastructure), and SDG11 (Sustainable Cities and Communities). Overall, two themes link these two projects: first, the need to find means for the alignment between climate change objectives and energy access objectives. While there are trade-offs between those two objectives, a strategic approach calls for a careful consideration of their synergies. Second, the need to follow questions of energy access through the whole supply chain, from the extraction of resources to the provision of energy to households. These two areas of interdisciplinary debate have facilitated the development of a collective intellectual project which culminated with this workshop. The project has concluded that low carbon projects are complex interventions with a number of co-benefits and unintended consequences. © Vanesa Castan Broto and Susann Strizke

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THE RENEWABLE ENERGY SECTOR IN ZAMBIA: OVERVIEW AND OPPORTUNITIES Ireen Chengo Mudenda, First Secretary of Trade, Zambia High

Commission

The Zambian energy sector faces a severe challenges. For example, a high degree of reliance on hydro-power creates shortages in energy supply especially during droughts. The country’s government has among its objectives to diversify the sources of energy generation as a means to increases access and improve reliability of supply for the Zambian populations. Most people in Zambia still uses traditional sources of fuel and energy such as firewood. Electricity access remains low, especially in rural areas where only 4% of the population have access to electricity. Currently renewable energy accounts for approx. 1% of the total energy matrix in Zambia. Hydropower and renewable energy sources (wind, solar PV, geothermal) are largely unexplored in Zambia. Zambia also presents favourable conditions for electricity generation from geothermal (80 hot springs in the country) and solar PV (due to 6-8 hours of sunshine per day). Overall, Zambia provides great opportunities for investment in renewable energy, especially solar PV. However, the implementation of energy projects based on these new sources faces a number of challenges, among them institutional barriers that prevent expanded provision of these type of projects which the presenter described as 'quite frustrating when there are such standing blocks and yet to know that your country needs much more energy'4. A number of PPP energy projects are currently underway such as the Scaling Solar Programme implemented by the IDC with assistance from IFC/ World Bank as transition advisers. Other projects underway include the upgrading of small hydro power plants by ZESCO, the installation of solar water pumping systems, solar heating systems, and solar home systems by the Zambian government as well as a programme that is aimed at procuring small- and medium sized RE projects (GetFit programme) which is supported by the German Kreditanstalt für Wiederaufbau (KfW). In addition to that, the Zambian government has launched a campaign to hand-out 5 million energy saving light-bulbs. The government implemented in 2017 a shift towards more cost-reflective energy tariffs and the decrease of subsidies of consumer tariffs with the overall objective of attracting private investment to the energy sector. The government has proposed various initiatives in the energy sector in an effort to make the right noises in the current context of international energy policy. However, Ireen Chengo emphasised that, despite these efforts, there are shortcomings in terms of delivering a long-term strategy. The policy framework in Zambia supports

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renewable energy systems only to a certain extent. Current challenges lie in the local technical know-how, the defining institutions that implement, manage and oversee these projects and their specific roles to avoid duplication and conflicts of interests. All these questions require targeted interventions from policy makers but ready-made solutions are not yet available. The proliferation of renewable projects projects provides hope. Zambian stakeholders and Zambian policymakers are increasingly interested in mini hydro and off-grid solutions for rural electrification. Providing electricity access by extending the national grid is not viable in every region. The government expects that in areas not covered by the grid, off-grid systems will enhance education, livelihood opportunities, sanitation, communication, and business as access to electricity will reduce the time and resources needed to fulfil basic energy needs. Discussing Zambia’s future energy strategy, Ms Chengo emphasized that a regional approach is a necessary element of this strategy. If Zambia improves and increases energy supply, the country could provide added-value for the whole region. Thus, a regional-approach is necessary. The current trade agreements in the region could provide the basis for a regional approach to energy access.

Azimoh, Chukwuma Leonard, Babu Sena Paul, and Charles Mbohwa. "Declining cost of renewable energy technology: An opportunity for increasing electricity access in sub-Saharan Africa." Electrical Power and Energy Conference (EPEC), 2017 IEEE. IEEE, 2017 Energy Regulation Board (ERB) Zambia. Energy Sector Report 2017. Lusaka, 2018 © Susann Stritzke

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'MAPPING SYNERGIES AND TRADE-OFFS BETWEEN ENERGY AND THE SUSTAINABLE DEVELOPMENT GOALS' Dr Long Seng To, Loughborough University

The 2030 Agenda for Sustainable Development —including 17 interconnected Sustainable Development Goals (SDGs) and 169 targets — is a global plan of action for people, planet and prosperity. SDG7 calls for action to ensure access to affordable, reliable, sustainable and modern energy for all. The research paper ‘Mapping synergies and trade-offs between energy and the Sustainable Development Goals’ represents a unique approach in mapping energy to all 169 targets of the Sustainable Development Goals. The authors undertook an iterative process to answer two questions: (A) Does the Target call for action in relation to energy systems? and (B) Is there published evidence of synergies or trade-offs between the Target, and decisions about energy systems in pursuit of SDG7? The analysis showed that 113 targets requiring actions to change energy systems, and that there was published evidence of relationships between 143 targets (143 synergies, 65 trade-offs) and efforts to achieve SDG7. Synergies and trade- offs exist in three key domains, where decisions about SDG7 affect humanity’s ability to: realize aspirations of greater welfare and well-being; build physical and social infrastructures for sustainable development; and achieve sustainable management of the natural environment. There is an urgent need to better organize, connect and extend this evidence, to help all actors work together to achieve sustainable development. Nerini, Francesco Fuso, et al. "Mapping synergies and trade-offs between energy and the Sustainable Development Goals." Nature Energy 3.1 (2018): 10 © Long-Seng To, Susann Stritzke

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'POWER SYSTEM OPTIMISATION IN UGANDA: TRADING OFF COSTS, CARBON EMISSIONS AND SUB-NATIONAL INEQUALITY' Philipp Trotter, University of Bath

Widespread energy poverty in sub-Saharan Africa is one of the greatest challenges for reaching UN SDG7. Addressing this challenge requires incorporating the macro level determinants of energy systems in Africa which are of financial, technological, environmental, social and political nature into a mid- and long-term strategy. The study developed and presented by Philipp Trotter focused on electrification and inequality in Uganda. The major problem for him is that energy investments are urgently needed in areas where profits are difficult to make - especially in rural Africa which suffers from a very low electrification rate. Until today, only few initiatives exist that focus on providing electricity to those rural areas in Sub-Saharan that need it most. Thus, energy planning studies need to include these vulnerable communities with the lowest electrification rates. In Uganda, there are severe inequalities with regard to electricity access. Northern areas display the lowest electrification rates in the country. The target of the Ugandan government is to achieve similar electrification and consumption levels in the country as South Africa. This will require an annual growth of installed capacity by 25% between 2018 and 2040. The talk presented a novel electrification planning optimisation approach tailored towards African case examples. It adds the crucial social dimension of sub-national electrification inequality salient in African electrification to conventional cost and environmental objectives. The model

quantifies different grid and off-grid generation and transmission infrastructure requirements associated with the optimal trade-offs between minimising system cost and sub-national electrification inequality. The model is the first energy planning optimisation applied to Uganda. Uganda’s national electrification rate is 18%, the urban versus electrification inequality ratio is over 600%. Grid-

connected as well as off-grid technology options are included in the model. Several demand scenarios until 2040 were modelled to analyse the different requirements that follow from

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Figure 1: Least-cost capacity (conservative demand scenario)

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Figure 2: Least-cost capacity (ambitious demand scenario)

Uganda’s energy system targets by 2040 from the governmental Vision 2040 policy. Network infrastructure, cost data, all supply potentials, as well as demand data are modelled spatially explicit using GIS software. The optimisation is solved with CPLEX. The results indicate that due to their abundance and falling costs, renewable energy generation dominate Uganda’s future electricity mix. Hydro and solar thermal are the main least-cost sources of electricity in a conservative and an ambitious demand scenario, respectively (Figure 1 and 2). Furthermore, there exists a sharp trade-off between minimising cost and minimising electrification inequality. In the least-cost solution, the model considers that fully electrified areas where some infrastructure is already present before tackling un-electrified areas. Such operation would further increase sub-national inequalities in until 2030 vis-à-vis today. A mix of grid extension and off-grid solutions on a large-scale is found to be the cost-minimal inequality mitigation strategy in Uganda and can also provide opportunities to enhance the local content of energy projects in the future. Rapid electrification plans may paradoxically exacerbate inequality. Dr Trotter also reflected on Uganda's ambition of installing 24 GW of nuclear power in the next two decades which was questioned as a sustainable solution by the presenter i.a. due to the high investment costs, the absence of experience with mining Uganda's uranium resources at scale and the general high-risk profile of this technology. A cost-effective solution instead might be solar-thermal energy which should be further explored. Trotter, Philipp A., and Roy Maconachie. "Populism, post-truth politics and the failure to deceive the public in Uganda’s energy debate." Energy Research & Social Science (2018) Trotter, Philipp A., and Sabah Abdullah. "Re-focusing foreign involvement in sub-Saharan Africa's power sector on sustainable development." Energy for Sustainable Development 44 (2018): 139-146 Trotter, Philipp A., Marcelle C. McManus, and Roy Maconachie. "Electricity planning and implementation in sub-Saharan Africa: A systematic review." Renewable and Sustainable Energy Reviews74 (2017): 1189-1209 © Philipp Trotter, Susann Stritzke

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'THE OFF GRID-TRAINING ACADEMY IN EAST AFRICA' Prof Andrea Micangeli, University of Rome

The Field Studies for Mini Grid Optimisation (FS4MGO) Research Group and the learning lessons from the Micro-grid training academy in East Africa, both led by Prof Micangeli, illustrate how the deployment and optimisation of RE micro-grids can be supported through local training measures and on-site data collection. Mini-grids have been deployed in developing countries over the last years and this experience has generated a wide technical knowledge basis for further developing mini-grids in other locations. However, mini-grids have not yet been deployed at large scale or made a substantial contribution to increase energy access in Sub-Saharan Africa. The current two main challenges for the successful widespread implementation of mini-grids in Sub-Saharan Africa are (1) uncertainties with regard to the energy demand and (2) limited local capacity to install and maintain these solutions. To tackle these challenges, FS4MGO focuses on capacity building and mapping community demand in order to build a comprehensive database to use as the basis for grid optimization. This approach is based on comprehensive onsite data collection at village level in order to obtain realistic figures of energy consumption and costs. The research team collects data on energy generation, the infrastructure of the community and consumption data of hybrid mini-grids (genset/solar PV or mini-hydro combinations). The project then generates load and consumption profiles for the optimization of installed mini-grids and the design of new projects. An important challenge is the volatility in demand, especially between harvesting- and non-harvesting seasons in rural communities that heavily depend on agriculture. Addressing and managing these demand profiles is a longer-term process which requires cultural awareness and a strong communal footprint. Micangeli, Andrea, et al. "Energy Production Analysis and Optimization of Mini-Grid in Remote Areas: The Case Study of Habaswein, Kenya." Energies 10.12 (2017): 2041. © Susann Stritzke, Andrea Micangeli

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'THE POTENTIAL ROLE OF NGOs IN FACILITATING SUSTAINABLE ELECTRIFICATION' Dr Lucy Stevens, Senior Policy and Practice Adviser, Practical Action

Dr Stevens focused on the role of NGOs in sustainable electrification. Overall, the role of NGOs is changing from concrete project delivery to an increased strategic role in supporting the longer-term development and adaptation of energy strategies in developing countries. A major reason for this change is the recognition that NGOs tend to work at project scales which are too small in order to create a significant impact given the challenges of low electrification rates in Africa.Projects supported and implemented by NGOs are often not financially sustainable because these NGOs are not permanently present to supervise the operation of their projects. In addition, NGO-led projects tend to be isolated from other energy projects and not connected to the wider energy systems in the countries where they have been rolled-out. Strategic solutions to address energy challenges in developing countries require a wider system that incorporates NGOs and policymakers who could together support those efforts which through policy changes and practical adjustments to delivery practices. NGOs can play a significant role in this process by being both grounded and influential in terms of influencing global narratives, convening and facilitating sustainable energy strategies. NGOs can also push boundaries of what could be achieved further and help setting the agenda. For example, energy access is not only a question of providing household electricity, it also concerns the service level of energy supply which means that the quality and reliability of the supply and service are central issues for the local population and especially for commercial customers who are significantly impacted by low service reliability. NGOs can influence and change the perspective of national planners and policymakers with regard to sustainable energy. NGOs can also shift attention away from the dominant focus on the supply of energy towards emerging issues including capacity building, unlocking markets and building long-term relationships among different stakeholder groups. NGOs can play a role in building the trust between these different partners, pushing the boundaries of agenda-setting policy making processes and perform as an effective and independent partner during the stages of project implementation. NGOs can influence global narratives through delivering evidence and doing advocacy and they have indeed already change the narrative from expanding electricity grid systems to inclusive energy for all. And NGOs can help mainstreaming overlooked aspects of energy access such as providing clean energy for cooking and gender awareness. 'Not reaching the last mile', 'not tapping potential of women’s

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engagement’ and the loss of political will which can lead to a ‘temporary’ or second class solution are risks that NGOs have contributed to understand. Building of trust and relationships, enhancing the knowledge of the energy customer situation and the forecast of their demand as well as the highlighting productive uses of energy in its surrounding are all essential for aspects of energy projects that NGOs have highlighted.

Bringing learning together on community engagement in mini grids: • Addressing affordability up-front costs, appliances

• Tools for choosing promising sub-sectors

• Role mini-grid companies in productive uses, example of PowerHive in Kenya (dairy, poultry)

• Options of ownership models for sustainability

• Rules that steer but allow innovation (South Africa vs Nepal)

Practical Action Poor People's Energy Outlook 2016: National Energy Access Planning from the Bottom Up. Practical Action Publishing, 2016 © Susann Stritzke

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THE ROLE OF PPPs IN TURNING THE LIGHTS ON IN AFRICA

Prof Allam Ahmed, University of Sussex

Prof Ahmed advocated Public Private Partnerships for electrification. The lack of access to clean energy and the dependency on traditional fuels bear significant risks for the population in developing countries. According to the United Nations, by 2030, the estimated number of deaths linked to traditional fuels will likely be greater than those individually from malaria, HIV/AIDS and tuberculosis which underscores the necessity of finding more sustainable forms of energy supply. Sustainable energy solutions are urgently needed in regions that lack access to energy. The costs of RE strategies are falling and there is increased investment in RE in developing countries. According to Prof Ahmed, the biggest benefits for Public-Private-Partnerships (PPPs) in Africa are improving access to electricity and enhancing local and social development among African nations. The central questions that arise are whether and how has Africa benefitted from those global trends in RE sector. What are the challenges still facing most African countries and how can African governments incorporate the critical role of private sector/PPPs in their development strategies in RE in Africa? There is a serious data deficiency which prevents countries and organisations to develop efficient strategies based on previous experiences and to systematically evaluate the impact of their work. 'The access to electricity is fundamental to development and a key driver for SSA’s economic growth.'5 However, a majority of countries are still experiencing power shortages, and two out of three households, or close to 600 million people, have no electricity at all. If the if underlying reasons preventing Africans from achieving wider access to reliable and affordable electricity are not addressed, economic growth on the continent will slow down, keeping millions trapped in poverty. There is a great need for mobilizing financial resources to expand local energy services delivery in the developing world. According to Prof Ahmed, pro-poor public-private partnerships are one of the best mechanisms to supplement and overcome government budgetary constraints for widening access to energy services, especially to the poor, because they can allocate project-risks between the public and private sector.6

The World Bank defines PPPs as a 'long-term contract between a private party and a government agency, for providing a public asset or service, in which the private party bears

5 Makhtar Diop, Vice President, Africa Region - World Bank 6 Sovacool, B. K. (2012) “Expanding renewable energy access with pro-poor public private partnerships in the developing world”, Energy Strategy Reviews 1 (2013) 181-192.

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significant risk and management responsibility'7 and RE PPPs are underway in Africa for example in Morocco, South Africa, Mozambique, Nigeria, Zambia, Kenya or Mali. By implementing PPPs in Africa a number of policy implications (See figure) . African countries display a high diversity and their cultural as well as socio-economic features must be taken into consideration: a single solution will not fit all.

Ahmed, Allam, ed. World sustainable development outlook 2007: knowledge management and sustainable development in the 21st century. Routledge, 2017 © Susann Stritzke, Allam Ahmed

7 World Bank Group (2014): Public Private Partnerships: Reference Guide, available online, page 17 (accessed 19 October 2017)

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'THE ECONOMICS OF RE OFF-GRID PROJECTS IN AFRICA AND THE ‘MULTI UTILITY’ CONCEPT AS A FUTURE OPPORTUNITY’ Nicholas Wrigley, CEO Winch Energy

The African continent suffers from very low rural electrification rates and despite increasing efforts to address this problem in the last years, the demand for off-grid energy solutions is increasing faster than the supply. One reason for that is that most governments in Sub-Saharan Africa, however, are still focused on investing in on-grid electrification allocating no or only very limited amounts from the national budget to rural electrification. Practitioners such as Nicholas Wrigley note that despite decreasing costs of solar PV installations over the last years, the cost of installing these systems in Africa is higher than those in Europe. In addition, the implementation of RE projects in Africa is very complex which is one of the reasons why off-grid solutions have yet not succeeded at scale. The emergence of RE markets in Africa, especially those of small- and medium-scale solutions, must be considered in a wider context. Mr Wrigley considered the case of Europe, a continent that has a much lower geographical spread and more favourable financing opportunities, where it took almost 15 years, a high level of subsidies and political will to implement RE projects at scale and for RE to reach a significant share in the overall energy mix. National financing options and investment in the African off-grid sector should be an essential part of national infrastructure planning since private investor loans will not lead to rural electrification at scale in the near future. More recent developments point in the opposite direction - the available capital provided by national banks seems to be decreasing for rural RE projects in Sub-Saharan Africa. The challenges for increased sustainable energy access must address the different factors that shape offgrid projects. Business models should be analysed, based on previous experiences and designed to produce bankable projects. Researchers can make an impact on policy-makers through an independent analysis of the current frameworks for RE projects and suggest future comprehensive strategies.

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The legislative and regulatory framework for off-grid electrification must be revised as it is often not suitable for off-grid projects. This revisions should take into account a national benchmarking of off-grid electricity tariffs in comparison to often heavily subsidised on-grid tariffs. WinchEnergy has implemented off-grid projects in countries like Mauritania or Chad and in every case, the projects had a massive positive impact on clean energy provision and local development, water supply, health and education. Joined and increased efforts are needed to bring prosperity to communities that are currently excluded from development and growth. © Susann Stritzke

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'LEARNING LESSONS AND STRATEGIC IMPLICATIONS FROM FOUR OFF-GRID PROJECTS IN AFRICA Tim Jackson, InfraCo Africa

InfraCo Africa is part of the Private Infrastructure Development Group (PIDG) and, while it is funded by governments and multilateral agencies, it operates as a private company. Investing in off-grid RE solutions in Sub-Saharan Africa presents serious risks: scarcity of available risk capital, limited local development teams, information gaps and asymmetries among local stakeholders, constrained host government capacities, corruption and vested interests and a first mover (dis)advantage for project companies that step in a yet nascent marketplace. These challenges are exacerbated in the poorest and most fragile sub-Saharan countries. InfraCo Africa's activities targets these challenges in this region. A number of key learning lessons can be drawn from the implementation of InfraCo's Minigrid developments in Tanzania, Uganda and Zambia. First, population density in specific areas determines the number of connections and the spread of a mini-grid, thus determining the efficiency of mini-grids compared to solar home systems (which might be a more viable solution in very widespread communities). Second, the regulatory environment (including the energy tariff system and grid connection regulations) has direct impact on the design (size/connection), bankability (tariff system/legal risk) and future prospects of the mini-grids. The tariff structure of the mini-grid itself is an essential aspect that must be considered in the planning phase including determining the connection fees, which households get connected at which rate and how much capital is available in the community to pay for energy consumption. This is directly related to the question of household take up and energy use versus added value through business creation and energy use. Technical aspects that are essential for the implementation of mini-grids in Africa are the systems power factor (which directly relates to the control for compatibility with invertors), the battery sizing and the overall internal capability required to manage the development and operation of the system in a community. Mr Jackson argued that helpful guidance for the roll-out of mini-grids in Africa and the development of electrification strategies in the region can be obtained looking at the lessons learnt from community energy schemes and the RE grid roll-out in Europe and North America and taking best practices from these projects into account.

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© Susann Stritzke

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'RE PROJECT FINANCING IN AFRICA – CHALLENGES AND OPPORTUNITIES' Dr Herta von Stiegel, Founder & Executive Chair, Ariya Capital Group

Financing RE projects in Sub-Saharan Africa has not yet reached a scale sufficient to ensure that current developments are on target to deliver the objectives of SDG 7. The financing gap for RE projects in Africa is currently about 65 bn USD per year according to the World Bank. Despite the limited external financing, investments from within Africa are scarce. International investors choose to invest their capital in Western stock-markets or real estate instead. In consequence, the financing gap in African energy infrastructure investment needs to be filled by local institutional investors, not just international donors. It is not about innovation, but rather, about the diversification and combination of energy projects with other solutions. Energy projects need to be delivered toward with agriculture or ICT projects. However, the financing requirements are very different for different projects depending on size and type of project. While bigger projects in cooperation with national utilities need high-volume, longer-term financing models, Independent Power Producers (IPPs) need smaller-scale, flexible solutions to implement RE projects at this level. RE project financing strategies must thus take into account that a variety of solutions is required to successfully implement and finance RE projects in Africa. Dr von Stiegel proposed focusing on three areas to deal with these challenges. The first area is utility scale RE projects where the main barrier is achieving bankability in the first stage. Specific innovative financing solutions exist that could ensure project implementation in the utility sector. The second are consists of the commercial and industrial sectors which rely on a stable power supply and could benefit from RE projects that are financed through corporate financing models for medium scale RE projects. This strategy would help reducing production losses due to load-shedding measures and power cuts. The third and most challenging sector is rural electrification. Public financing through development banks are options for these type of projects but the challenge is to reach a critical mass because these banks tend to finance projects with a total volume of above 10 million USD. Beside building a 'critical mass', mini-grid projects need a proper risk-mitigation strategy to attract financing within an improved regulatory framework to provide longer-term legal security. © Susann Stritzke

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THE AFRICAN LANDSCAPE Nearly 600 million people in Africa lack access to electricity Access to power is necessary for economic and human development Investment in the African power sector is required to increase access to and reliability of electricity

ARIYA STRATEGY Maximise impact and returns by:

• Powering the C&I sector • Working with utilities with the ability to execute complex power projects • Unlocking local institutional capital to invest in enabling infrastructure and

transfer skills to loca teams

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'FROM A PILOT PROJECT TO A VIABLE SCALABILITY OF THE MINI-GRIDS IN RURAL Africa' Bruno Lopes, RVE.Sol

The installation of RE mini-grid solutions in rural Africa faces several difficulties. According to RVE.Sol previous experience of micro-grid project in Kenya, three of the central issues for developers when planning and installing these systems are inaccurate consumer data provided by the community surveys during the planning stage of the project, uncertainties in energy demand and the agricultural seasonal fluctuations that have a direct impact on the purchase power of targeted consumers. To enhance the long-term success of micro-grids a success factor is accurate data collection during the planning stage. The system used by RVE.Sol takes into account the four key performance indicator of the micro-grid:

(1) energy consumption and peak power, (2) the average number of appliances per customer, (3) the daily usage of the appliances, and (4) the appliances' efficiency.

This data is the basis for designing the layout of the system and a tariff system to control demand through incentivizing energy consumption during off-peak times. The system should be adjustable to a growing future energy demand. A solution is developed by RVE.Sol is KUDURA, a sustainable multi-utility platform which can be adjusted to provide services like to clean water, electricity or agricultural applications.

© Susann Stritzke

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'CONTEXT AS ‘KINGMAKER’ – A FRAMEWORK FOR SUCCESS’ Nicholas Geddes, Senior Consultant at ESP Consulting

Ol Pejeta Conservancy (OPC) in Kenya protects 90,000 acres of land, and is the largest black rhino sanctuary in East Africa – it also protects the last two Northern White Rhinos in the world. OPC is a model of sustainable development, funded by donors and income from tourism and livestock. In 2016 it contributed taxes of US$1.74 million, employed 981 people and invested US$ 650,000 in local communities. To secure its long-term future OPC aims to be entirely financially self-sufficient and as such is exploring innovative ways to generate income and deliver cost savings – the development of clean, renewable energy for the conservancy and surrounding communities is one such opportunity. OPC currently relies on off-grid diesel generation, but in line with its environmental credentials is seeking to decarbonise it's entire energy generation. To do this it is developing a subsidiary business to decarbonise its consumption and extend these services to neighbouring conservancies and communities. Phase 1 will involve switching from diesel to solar driven water pumps, both for to meet its water demands and those of its surrounding communities. The implementation of this strategy has taken into account three research questions. These are:

1. How do the economics of solar PV pumps compare to diesel pumps? 2. What are the factors that impact adoption in other conservancies? 3. What are the factors that impact adoption in local communities?

Successful implementation requires not only the finance and technology to work, but perhaps most importantly, the local context to be properly understood and reflected in the investment. These three dimensions, technology, context and finance are interdependent and successful projects will understand and reflect the interactions between them to reduce risk and increase returns. For example, the reduction of the off-take risk can lower the cost of capital. The characteristics of Renewable Energy Technologies (RET) have a major impact on technology diffusion – high fixed costs and long asset lives require well designed end-user financing and operation and maintenance (O&M) arrangements. End-user characteristics in turn impact technology diffusion through the economic circumstances of customers, their cultural context and technical requirements. For example, in the Kenyan solar home system

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(SHS) market many farmers defaulted on contracts during the crop-sowing season when incomes were low. The country and regional characteristics also impact technology diffusion, for example through the existence or non-existence of O&M capabilities or physical infrastructure. These examples illustrate the importance of fully understanding the context into which a product or service is being absorbed and tailoring the product design appropriately. It is important that the product not only meets the underlying needs of the consumer, but that it reflects the absorptive capacity of the market – the more complex the product the higher must be the absorptive capacity of consumers and the wider economy. Two innovation frameworks can help practitioners develop a deeper understanding of the context into which they wish to diffuse a technology: (1) the diffusion of innovations framework; and (2) the innovation systems framework. The diffusion of the innovations framework tends to focus on the adopter or consumer perspective, seeking to understand consumer characteristics, how the product or services reflects them and the impact this may have on innovation diffusion. The innovation systems framework (2) takes a system-level perspective, seeking to understand the economic and social conditions and their impact on innovation diffusion.

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A hybrid approach has been developed to analyse both perspectives, by bringing together specific elements of each framework (e.g. relative advantage of the technology, compatibility with lifestyle, complexity, market structure etc.). This framework was applied to the OPC context and delivered the following insights:

• Whilst the life-cycle costs of RETs may be lower, consumers often demonstrate a “first-cost bias” and there is a perception that they can be more expensive and higher risk. As a result, a benefit uncertainty occurs. Experiences of failed projects and challenges estimating the fuel-costs of alternatives add to these problems.

• In some contexts the economic advantages of technologies do not materialise due to high transaction costs, poor design, expensive maintenance and unreliability. These are issues are often driven by a lack of skills in the local economy and highlight the importance of absorptive capacity.

• The long asset lives of RETs make adequate O&M arrangements vital to securing relative advantage over the course of an investment.

• Whilst a technology may be compatible with a person’s needs, the wider value proposition (e.g. contractual arrangements and flexibility) also need to be consistent with their lifestyle.

• Additional product complexity means the requisite skills and resources must be in place to maintain and operate technologies. A novel technology may not have the supporting infrastructure and this may inhibit successful diffusion.

The implementation of solar watered pumps as pilot projects at OPC has proven the technology and economics work. This research and the frameworks used to shape it have developed a much more granular understanding of the local context and this will be used to shape implementation to enhance the chances of successful diffusion of the solar water pumping technology at scale.

© Nicholas Geddes, Susann Stritzke

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'SUSTAINABLE ENERGY ACCESS IN MOZAMBIQUE' Prof Vanesa Castan Broto, University of Sheffield

The Sustainable Development Goal 7, of achieving universal access to sustainable energy, has pointed to the multiple dimensions of the global energy challenge. Figures published alongside the Sustainable Development Goals suggest that one in five people worldwide still lack access to electricity and three billion people rely on wood, coal, charcoal or animal waste for cooking and heating.

Mozambique is a sad reminder of this challenge. Rates of electrification remain low at 20.1% (5.7% in rural areas and 54.5% in urban areas). Most people depend on charcoal or biofuels for their energy supply. In some cities, especially Maputo, the electricity network has improved significantly in the last years. However, people having physical access to an electricity network may lack an appropriate supply of electricity because the supply is intermittent, because they cannot afford continuous supply, or because the form of supply does not match people’s needs. As prices of charcoal have increased, Liquefied Petroleum Gas has become a feasible alternative, but evidence of a transition to LPG in households is scant. The project Sustainable Energy Access in Mozambique (SEA-Mozambique), funded by the Sustainable Development Programme of the British Academy, has sought to develop a multi-level approach to understanding the barriers to energy access in Mozambique as a means to engage with the global energy access challenge. The project examined the political economy of energy supply, the territorial distribution of energy access and the everyday practices of energy provision and use in an attempt to move beyond supply-oriented approaches and demonstrate the complexities involved in delivering and using energy. Our research demonstrates how energy is integrated in complex infrastructure landscapes which are shaped by everyday practices as much as by complex strategic projects. In that sense, the deployment of political technologies of territorial and infrastructure control is uneven at best.

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The lessons from the Mozambique case are important. In our last paper on ‘Energy justice and sustainability transitions in Mozambique’ we have argued that “There is an imperative to develop energy justice theory fit to address the complex demands of a global energy transitions in poorer countries of the Global South. Delivering transformative change in contexts where energy systems are underdeveloped requires assessing energy justice principles from multiple situated perspectives, adjusted to the conditions that shape the possibilities for action.“ We make a call for a postcolonial perspective on energy access, one that puts ideas of territory and resource sovereignty at the centre of the debate. Castán Broto, Vanesa, et al. "Energy justice and sustainability transitions in Mozambique." Applied Energy 228 (2018): 645-655. Castán Broto, Vanesa. "Energy sovereignty and development planning: the case of Maputo, Mozambique." International Development Planning Review 39, no. 3 (2017): 229-248. Salazar, Diana, Vanesa Castán Broto, and Kevin Adams. "Urban Infrastructure and Energy Poverty in Maputo, Mozambique." Environmental Justice and Urban Resilience in the Global South. Palgrave Macmillan, New York, 2017. 259-276. © Vanesa Castan Broto

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'ON-GRID vs. OFF-GRID: RESULTS FROM TWO RESEARCH PROJECTS ON RE IMPLEMENTATION IN SSA' Dr Susann Stritzke, University of Oxford

Achieving the SDG 7 for Sub-Saharan Africa (SSA) requires two different approaches. The first must be tailored to close the gap between energy demand and supply which exists in most African countries due to a limited installed energy capacity, a lack of previous infrastructure investment and a growing energy demand and comprises on-grid renewable energy (RE) solutions. The second approach focuses on enhancing energy access for those people in SSA, mainly in rural areas, who currently lack regular access to electricity. Due to the vast geographical spread and a limited grid-infrastructure, this approach must strongly rely on RE off-grid solutions such as mini- and micro-grids or solar home systems. Two research projects funded by the British Academy did focus on different aspects of RE on-grid and off-grid solutions in SSA: 'Making Light work ' and Unintended impacts of low-carbon projects'. 1. 'Making Light Work (MLW)' The project led by the Smith School of Enterprise and the Environment (SSEE) in cooperation with the University of Cape Town comprised a holistic evaluation of success factors for the implementation of Scaling Solar in Zambia. The Scaling Solar programme is an initiative designed by the World Bank as a 'one-stop-shop' solution for governments in Africa to facilitate privately-funded on-grid photovoltaic (PV) energy projects. It has been set up as a public-private-partnership (PPP) comprising an auction-based government-led procurement and PV site-selection processes to achieve competitive tariffs and was first rolled out in Zambia in 2015. The programme was initiated after a directive to the Zambian Industrial Development Corporation (IDC) from the Zambian President Edgar Lungu to procure 600MW of solar power in order to overcome the national energy crisis and is of high political priority in Zambia. The hydro-dependent country suffered a serious shortage of electricity which resulted in regular power outages due to lower rainfall during the 2014/2015 rainy season. The first procurement round which comprised two solar PV power projects totalling an installed

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capacity of 73MW, secured winning bid prices of US$c 6.02/kWh and US$c 7.84/kWh which were among the world's lowest utility-scale solar PV feed-in tariffs at that time. The financial close and the implementation of both projects however was significantly delayed due to a number of institutional, legal and practical challenges. A central undertaking of the research project was to analyse these challenges from a PPP perspective, to illustrate critical success factors (CSFs) that have decisive influence on successful project implementation and to examine PPP framework developments in the country. Central findings of the analysis were that public stakeholder alignment and institutional capacity have been critical success factors for the implementation of Scaling Solar in Zambia. The existence of unresolved regulatory issues and lack of previous coordination processes among public stakeholders led to a significant delay of the project. Bureaucratic resistance and the persistence of certain institutional stakeholders to maintain the status quo of energy production in Zambia hampered the smooth implementation of Scaling Solar. Limitations in institutional capacity among the public stakeholders and lack of understanding of the specific requirements that such a development imposes since Scaling Solar represented the first major solar PV energy investment in Zambia stated a further challenge for the smooth project implementation. Despite the formal existence of a PPP framework in Zambia, Scaling Solar has been implemented outside this framework. A neutral coordination unit which has the capacity and the power to manage and oversee the implementation process effectively was absent. In addition to that, the specific shareholder structure of the Scaling Solar projects in Zambia bears a significant risk for conflict of interests and limits project oversight. A few learning lessons for future projects can be derived from this analysis. The first is that the implementation of PPP projects, especially when they comprise a new technology, is a complex process which requires preparatory processes to ensure public stakeholder alignment and institutional capacity building at pre-implementation stage. An estimated project timeline must take these processes into account. Secondly, interrelationships between the public procurer and the project shareholders can lead to conflicts of interest and intransparencies which in turn can jeopardize project efficiency and success. An independent, assertive unit coordinating the process (PPP Unit) can potentially counteract these threats but is often not yet part of the PPP implementation structure. 2. Unintended Impacts of Low Carbon Projects’ The joint research project between the SSEE and the University of Sheffield comprised an evaluation of off-grid solar PV projects in rural areas of Chad, Mauretania, Benin and Tanzania based on interviews with project developers. The research questions asked for positive or negative impacts that occurred during or after the projects were been installed which have not been anticipated or were primarily intended by the project developers. The

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evaluation was based on a review of 13 RE projects with a size between 8 – 50 kWp solar PV energy installed. These projects applied various operational models from universal energy access for villagers via subsidized connection fees to selected connections for consumers with a certain expected consumption volume. The evaluation of these projects revealed five main issues: (1) Quality of products & equipment: RE appliances are significant investments for rural households and they can bear the danger of becoming 'poverty trap' if the quality of the equipment is low. This can lead to system defaults and the expected added value generation through these investments cannot materialize. Thus it is advisable to implement certain quality standards and controls as well as a clear warranty or refund schemes which consumers are aware of. (2) Town planning: Experiences from Mauritania or Chad show that the electrification of villages and local communities can lead to a rapid increase in the local population. People from surrounding, yet unelectrified areas are moving into these villages. This in turn leads to an increased housing demand. Inconsistencies or the absence of comprehensive land registries limit town planning measures as well as the allocation of land to meet these demands and can cause local conflicts and the growth of unplanned settlements. It is therefore advisable for developers or electrification agencies, to take these potential developments into consideration and collaborate with local authorities such as councils or village headmen and develop a town planning strategy upfront. (3) Waste management: An increased access to electricity supply also creates an increased level of waste, for example from electric appliances or simply higher consumption levels due to local business growth. Most of the rural communities in SSA cannot rely on a waste management or disposal system and the introduction of a waste management system in cooperation with the developer and the community is advisable to avoid longer term environmental pollution. (4) Monitoring & evaluation: The review of the solar PV systems has revealed very different levels of system efficiencies. These are expressed through a wide range of people connected per kW installed or significant differences with regard to the installation cost per kWp installed among the systems for example. Although such benchmark parameters do not automatically allow a direct comparison of system efficiency due to different geographical or social circumstances, an independent monitoring and evaluation scheme is advisable especially for publicly funded projects.

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(5) Capacity building: A problem that has been mentioned by most developers is the local shortage of skilled workforce and technicians wich impacts the installation of the solar PV systems as well as long term operation and maintenance. An important approach to tackle these challenges are local capacity building and training programs which could be implemented cooperation with developers and educational institutions such as training institutes and universities.

Stritzke, Susann. "‘Clean energy for all’: the implementation of Scaling Solar in Zambia." World Journal of Science, Technology and Sustainable Development , Vol.15 iss.3, 2018, pp.214-225 © Susann Stritzke

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REFLECTIONS AND SUMMARY Andrew Scott, Senior Research Fellow, Overseas Development Institute

The discussion has illustrated again the high complexity of RE projects in developing countries. A recurring theme with this regard is a lack of data. This poses a challenge for macro-level demand forecasting, for practitioners and for understanding impacts. The evidence base for the benefits of electrification is certainly thin when it comes to quantifiable benefits that can be valued. Many of the benefits are intangible (e.g. security), but qualitative evidence is also limited, often anecdotal. Data is being increasingly collected, however. RVE.sol and the MicgroGrid Training Academy among others collect complex data about its customers’ electricity use. But this data is not always publicly available and it may be difficult to compare data across companies or projects. The discussion is often focused almost entirely on the delivery of access to electricity to people who do not have access. Understandably – there are 620 million people living without electricity in sub-Saharan Africa. But there are also many who do have access, especially in cities, and a large share of electricity consumption is taken by industrial and commercial, rather than residential, consumers. Planning and policy-making for off-grid electricity services needs to take account of – and be integrated with – planning for on-grid services. The question of subsidies and public financing of electrification is a central element of the discussion. Private sector mini-grid developers, for example, recognise the need for subsidies to get projects off the ground. The use of public finance in Europe and North America, to establish their national grids, was noted. The limited demand and incomes of the rural population without access to electricity do not offer the prospect of large commercial returns. Public finance is required to reduce risk and make projects more ‘bankable’, and in early stages of project development when risks are high. Building off-grid systems with a modular, expandable design allows them to respond to increased demand when it occurs.

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Much of the discussion highlighted the importance of developing electricity systems appropriate to local context. Much was also about outsiders – donors, planners and companies – coming to develop on- and off-grid electricity in African countries. This raised questions about their understanding of what is relevant to the local context (or the need for investment to develop this knowledge). If governments have been receiving poor advice about electrification policy, it has been from outsiders. Electrification in Africa does not need to follow the pattern of industrialised countries. But there is limited capability in most African countries to develop an indigenous approach. Capacity building, such as the University of Rome’s off-grid training academy, needs to extend from the technical and operational to the policy and planning. © Andrew Scott