Increasing energy access for sustainable development in

Africa:

E-Parliament Climate and Energy Hearing

Njeri Wamukonya

17-20 Nov 2006

External Shocks have contributedto deepen Energy Poverty

Areas of Ongoing or Imminent Power Shortfalls in SSA

MAURITANIAMALI

SENEGAL

GUINEA BISSAU

GUINEA

SIERRA LEONE

LIBERIA

COTE D’IVOIRE

BURKINA FASO

GH

AN

A

TOGO

BE

NIN

NIGERIA

NIGERCHAD SUDAN

CA

MER

OO

N

CENTRAL AFRICAN REPUBLIC

ERITREA

ETHIOPIA

DJIBOUTI

SOM

ALIA

KENYA

UGANDADEMOCRATICREPUBLICOF CONGO

RWANDA

BURUNDICO

NG

OGABON

EQUATORIAL GUINEA

SAO TOME AND PRINCIPE

ANGOLA

NAMIBIA

BOTSWANA

ZAMBIA

TANZANIA

MALAWI

ZIMBABWE

MO

ZAM

BIQ

UE

SOUTH AFRICA

SWAZILAND

LESOTHO

MA

DA

GA

SC

AR

MAURITIUS

COMOROSMAYOTTE (Fr.)

SEYCHELLES

CAPE VERDE

GAMBIA

Main Cause or TriggerNatural Causes (Droughts)

Financial Shocks (Unaffordable Oil Prices)System Disrupted by Conflict/Other

23 out of 48 SSA countries are currently vulnerable

e Commerce and Renewable Energy

(eCARE)

Objectives

...to expand access to telecommunications for urban development

...to eliminate the energy barrier to telecoms access by utilizing renewable energy

solutions

Why would e-Care work?

Empirical evidence: Entrepreneur-run business centers (BCs) are providing, at affordable rates:

•Voice telephony

•Internet connectivity

•Online content

•Value-added services

RE-powered BCs being proposed under eCARE can serve 3,000 - 5,000 customers

Small entrepreneurs can reach urban and peri-urban customers

But: small entrepreneurs serving telecoms markets need...

•Start-up or growth capital

•Business support services

•Supportive regulatory and policy framework

•Reliable power supplies

•Network access

SELL: Voice telephony; Internet connectivity & content; Value-added services

Select Franchisees

Sell network access

Provide business support services to Franchisees

Oversee management of eCARE Fund

Build strategic relationships

Small entrepreneurs: Franchisees

eCARE Franchisor

/(Telecom regional offices/units)

Management Board

A franchise business structure makes it happen

Example of a standard franchisee package…

How eCARE works: Technology

Each franchisee package is an integrated unit comprising:

Battery Bank

InverterRegulator

PV Array

DC Lights

SubscriberUnit

MFS

Computers

PV Array Subscriber Unit

Lights

InverterRegulator

Battery bankComputers

Printer/copier/etc

Phones

Item Cost (USD)

Telephone (3) 45

Desk top computers (1) 500

Renewable energy equipment

7,500

Subscriber terminal 400

Furniture 70

Container/Housing 1,500

Total 10,015

How eCARE works: FinancingCost structure of a standard franchisee package:

-Equity: minimum 10%; $500

-Debt (micro-finance): $4500

-Subsidy/grant: $5000

Financing plan (Franchisee level):

eCARE Facility: A fund that will be used to:

Finance the debt portion of the financing plan

Guarantee financing/co-financing from local financial institutions

Subsidize value-added services for socially important groups such as school children, farmers, etc

Roles of partner financial instns (1)Provide co-financing to qualifying franchisees:

direct/indirect equity contribution; and/or Debt financing

Loan Administration

Loan recovery

Monitor and coordinate performance of Franchisee through daily/weekly receipt into Accounts.

Maintain system for the payment to Telecom on behalf of the Franchisee

Apex Bank:Supervise and coordinate activities of participating Banks

Roles of partner financial instns (2)

Roles of Telecom

Extension of infrastructure to serve Business Centre connectivity

Network operation and maintenance

Day to day management of the project

Roles of local partner

Entrepreneur identification and screening- in collaboration with participating financial institutionsEnterprise development services for entrepreneurs- focused on enabling entrepreneurs to develop value-added products and services (economies of scope) for sustainability

Participating in overall project management and strategic planning/implementation- specializing in renewable energy applications aspects

Roles of UNEP

Supporting project management

Fund-raising and facilitation of critical relations between eCARE and:- ICT and RE equipment providers- national and international sources of development finance

Promoting enabling policies for accelerated diffusion of ICT applications of RE in off-grid areas

What can parliamentarians do?

Encourage budgetary allocation across sectors

Asanteni Sana!

Karibuni!