'Clean energy for all The implementa4on of Scaling Solar in Zambia - - PowerPoint PPT Presentation

'Clean energy for all’

The implementa4on of Scaling Solar in Zambia

• Dr. Susann Stritzke

Research Associate Renewable Energy WASD Conference, London, 04/12/2017

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WHO WE ARE

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Established in 2008 through the generosity by Sir Mar4n Smith and his family, aGached to the School of Geography at the University of Oxford We believe that to address climate change and environmental

sustainability, it is essenNal to bring business into the conversaNon

We seek to apply impacAul research to develop innova4ve solu4ons for the challenges facing humanity and the modern firm Project: ‚Making light Work’ - funded by the BriNsh Academy to evaluate success factors for the implementaNon of Scaling Solar – a programme developed by the World Bank

ENERGY SITUATION IN ZAMBIA

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Zambia

Electricity Profile

31%

Access to electricity

2 GW

Installed capacity (+/-)

83%

Hydro- power Government of Zambia (GRZ): Universal electricity access for all Zambians by 2030 99% State-owned generaNon, transmission & distribuNon (Zesco)

ENERGY SITUATION IN ZAMBIA

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Low electrifica4on rate Hydro dependency - Climate change Power deficit (est. 2016: 600-1000 MW) Private investment in the power sector (IPPs) is yet very limited High financing costs

SCALING SOLAR

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Programme designed by World Bank/IFC to facilitate privately-funded on-grid photovoltaic (PV) energy projects Offers a range of World Bank resources & services in a “one-stop shop” package to governments (advisory services, standardized contracts, stapled offer of financing, guarantees and insurance...) Goal: Nme- and cost-efficient implementaNon of uNlity scale solar pv projects Procurement process: selecNon of developers through reverse energy aucNon First rolled-out in Zambia; further implementaNon in Ethiopia, Senegal and other countries in SSA planned

SCALING SOLAR IN ZAMBIA

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• First solar PPP in Zambia
• Launched 2015 - iniNated afer a direcNve by the Zambian President Edgar

Lungu to the Zambian Industrial Development CorporaNon (IDC) to procure

600MW of solar power in order to overcome the naNonal energy crisis

• Projects have been prepared and aucNoned by Industrial Development

Corpora4on Zambia (IDC, 100% SOE) in cooperaNon with IFC

• Round I: 2 solar PV projects tendered (52 MW/34 MW)
• Tariffs achieved considered to be benchmark in the region

(6 US$ct, Neon/First Solar & 7,8 US$ct per kWh, ENEL Green Power)

• Bidders were not involved in project development

SCALING SOLAR IN ZAMBIA

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The World Bank. (2017). Project appraisal document on a proposed IDA guarantee (...) and on a proposed IFC financing (...) to Bangweulu Power Company

• ltd. for the West Lunga Scaling Solar energy project. Retrieved from <hGp://documents.worldbank.org/curated/en/974771487473237766/pdf/

PAD-01302017.pdf>

CURRENT PROJECT STATUS

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✓ ✓ ✓ ⌛

🤸

• Projects are currently approx. 10 months delayed

CRITICAL SUCCESS FACTORS

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Adequate risk alloca4on & sharing

Scaling Solar: risk management & credit enhancement package Poli4cal risk insurance provided & par4al risk guarantees

Experienced & solid private sector par4cipants

Scaling Solar: comprehensive technical, financial & legal criteria for bidders set by RFQ process Bidders must demonstrate substan4al experience in developing, construc4ng &

• pera4ng PV

power plants

Poli4cal support

Scaling Solar: presiden4al direc4ve & structure of IDC (SOE); high poli4cal urgency

Public & community support

Scaling Solar: stakeholder consulta4ons - no immediate

• pposi4on

Transparent procurement

Scaling Solar: high degree of transparency, selec4on of bidders based on an auc4on scheme, all bids announced

Research: Main CSFs for the planning & implementa4on phase of PPPs*

*Osei-Kyei, R., and Chan, A. P. C. (2015), "Review of studies on the criNcal success factors for public-private partnership (PPP) projects from 1990 to 2013", Interna'onal Journal of Project Management, Vol. 33 No. 6, pp. 1335–46

✓ ✓ ✓ ✓ ✓

?

FINDINGS ZAMBIA

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Public stakeholder alignment and ins4tu4onal capacity

Current delay mainly a quesNon of governmental stakeholder alignment among those bodies, which facilitate the implementaNon

• f the programme in Zambia:
• Persistence of unresolved issues & lack of previous

coordinaNon processes among public stakeholders

• Rooted in the complexity of such a PPP & the number of

stakeholders involved (stakeholder alignment)

• LimitaNons in terms of insNtuNonal capacity among the public

stakeholders in implemenNng the first large-scale solar pv project in Zambia - lack of understanding of the specific requirements that such a development imposes, for example with respect to the project site, or specific regulatory issues (grid-code).

Public Sector

Speed vs. Prepara4on: Public stakeholder alignment and insNtuNonal capacity building at pre-implementaNon stage ‘Neutral’ coordina4on: interrelaNonships between procurer & SPV shareholders > potenNal conflict of interest > independent unit coordinaNng the process (PPP Unit)

Private Sector

Conserva4veness vs. Risk appe4te: Consider data accuracy as a potenNal risk-factor and include ‘error’ margins in the bidding strategy; calculate Nme delay

‘Clean Energy for All’

Big vs. Small: ReconsideraNon of uNlity scale energy projects as soluNon to achieve SDGs - Focus on the strategic implementaNon of decentralized small and medium scale RE projects and the regulatory framework that enables successful project development in the on-grid (e.g. net-metering) and off-grid sector

LEARNING LESSONS

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Thank You!

susann.stritzke@smithschool.ox.ac.uk

LITERATURE

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Osei-Kyei, R., and Chan, A. P. C. (2015), "Review of studies on the criNcal success factors for public- private partnership (PPP) projects from 1990 to 2013", Interna'onal Journal of Project Management, Vol. 33 No. 6, pp. 1335–46. Rockart, J. F. (1982), "The changing role of the informaNon systems execuNve: A criNcal success factors perspecNve", Sloan School of Management, pp. 3–13

• 5. CONCLUSION

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LEARNING LESSONS

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Government / Public Actors

• Speed vs. Prepara4on: Public stakeholder alignment and insNtuNonal capacity building at pre-

implementaNon stage ‘Neutral’ coordina4on: interrelaNonships between procurer & SPV shareholders> potenNal conflict of interest might affect levels of trust among stakeholders > independent unit coordinaNng the process (PPP Unit)

Private Actors/ Developers

• Conserva4veness vs. Risk appe4te: Consider data accuracy as a potenNal risk-factor and include

‘error’ margins in the bidding strategy; calculate Nme delay

ImplementaNon

• f the SDGs
• Big vs. Small: ReconsideraNon of uNlity scale energy projects; Focus on the strategic

implementaNon of decentralized small and medium scale RE projects and the regulatory framework that enables successful project development in the on-grid (e.g. net-metering) and

• ff-grid sector

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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-Saharan Africa Botswana Ghana Kenya Malawi Niger South Africa Zambia Zimbabwe Rural electrificaNon rate Urban electrificaNon rate NaNonal electrificaNon rate %

hGp://www.worldenergyoutlook.org

Energy access: urban vs. rural areas

17 hGp://data.worldbank.org

2000 4000 6000 8000 10000 12000 14000 Niger Ethiopia Nigeria Congo, Rep. Ghana Mozambique Sub-Saharan Africa Zimbabwe Zambia Namibia Botswana East Asia & Pacific South Africa European Union United States kWh

Electric power consump4on (kWh per capita) 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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Cri4cal Success Factors (CSFs) for Public Private Partnerships CSFs = ‘key areas of ac4vity necessary to be focused to ensure compe44ve performance towards an organisa4on’s strategic goals' (Rockart, 1982) Empirical research iden4fied different CSFs for different stages of PPP projects Study iden4fied 5 main CSFs for the planning & implementa4on phase of PPPs (Osei-Kyei & Chan, 2015)