NAMA Design Rural Electrification with Renewable Energy in The Gambia

17TH TO 19TH AUGUST, 2015NAMA REGIONAL WORKSHOP, KIGALI, RWANDA

MINISTRY OF ENERGY

Saidou MS Badjie, Ministry of Energysaidoumsbadjie@yahoo.com / saidoumsbadjie@gmail.com

NAMA Design Rural Electrification with Renewable Energy in The Gambia

MINISTRY OF ENERGY

Content

1 Introduction to Rural Electrification with Renewable Energy Nationally Appropriate Mitigation Actions 2 Rural Electrification in The Gambia 3 Policy Background4 NAMA Objectives5 NAMA Ventures6 Capacity Development 7 NAMA Financial Requirements and Mechanisms 8 NAMA Implementation Structure 9 Measuring, Reporting and Verification 10 Conclusion

MINISTRY OF ENERGY

Rural Electrification with Renewable Energy in The Gambia

Electricity Challenges Several challenges burden The Gambia’s electricity subsector such as: High tariffs due to its dependence on fossil fuel generation, poor operational efficiency and heavy electricity losses due to its ageing transmission and distribution infrastructure (Ministry of Energy, 2014). Lack of access to electricity also hinders social development and hinders the delivery of health care and education services in the country. The Gambia is confronted with both infrastructural and financial constraints in providing grid connectivity to rural and remote areas. Electricity in the country is quite expensive. Regional benchmarks stated that electricity tariffs in The Gambia are quite high for both residential and commercial users and therefore should be reduced and make it affordable to improve livelihood.

MINISTRY OF ENERGY

Background GambiaDemographics: Smallest country in mainland Africa and is 15 – 80 km wide and about 400 km long

(Napa, 2007). Area of approximately 113,000 km2 (SOE, 2010). located between 13.79° and 16.82° West Longitude and within 13° North latitude

(SOE, 2010). Population of: 1,883,051 (July 2013)

Power Generation and Supply (Pre 2005) Monopoly on Power generation, transmission and distribution by NAWEC

(National Water and Electricity Company). NAWEC maintains Kotu Power Station (25.3 MW – peak load) as the major generating

power house supported by a number of stand-alone power stations in the major provincial towns (6 mini – grids).

MINISTRY OF ENERGY

Electrification rate across regions in The Gambia

Regions Electrification Rate

Banjul 92%

West Coast Region 22%

Upper river Region 14%

Lower river Region 12%

Central river Region 7%

North bank region 6%

Policy Background

National Energy Policy The National Energy Policy was launched in June 2005 and defines broad policy objectives and strategies, including those for rural electrification and renewable energy. increasing the adequacy, accessibility and reliability of electricity, reducing the cost of electricity, encouraging private sector participation, providing energy security and promoting rural development. The new energy policy revised in in 2014 highlights the importance of energy in meeting Sustainable Development goals. For instance, energy access can assist in achieving the goal of eradicating extreme poverty and hunger through: The Policy prioritizes rural electrification and promotes the use of renewable energy resources such as wind and solar for electricity generation, particularly in the rural areas. The Policy includes a target of achieving at least 30% renewable energy generation capacity by 2018.Renewable Energy Law 2013: The Renewable Energy Law was enacted to streamline process of application and permission for renewable energy projects, assure quality of technical systems and capacity of the technical teams. Incentives are also given in the law for Renewable Energy projects. The Electricity Act 2004 was enacted to further promote the participation of the private sector in the electricity market and to regulate the sector to ensure consumers receive better services as well as ensure that operators operate with optimal efficiency. Besides, there is an Electricity Strategy recommending that The Gambia to meet over 50% of demand of renewable electricity by 2030 Public Utilities Regulatory Authority (PURA) have developed Feed in Tariff Model with specifications oncertification of Renewable Energy Plants and range of accepted generation capacity

MINISTRY OF ENERGY

5 NAMA objectives1. Increase the generation and overall share of renewable

energy (electricity) 2. Reduce GHG emissions in the power generation sector,

based on a business-as-usual and suppressed demand scenarios

3. Increase rural population’s access to affordable, sustainable and reliable electricity supply

4. Encourage an increase in rural community income generation, and improve rural livelihoods

5. Increase the level of private sector participation within the power sector in The Gambia

Current Energy use in Rural Areas

Kerosene lighting Fossil fuel based

generators for economic activities

Fossil fuel based generators for

residential purposes

Proposed solutionImplementation of NAMA using Renewable Energy sources for rural electrification which will increased rural electrification and will be financed through a variety of means Consumer payments National budget Nationwide electricity

surcharge International partners

Two-phase implementation plan

PHASE 1

Establishing:RE - Micro GridsRE - Community Energy CentersRural Productivity ZonesRE Operational Subsidy FundMain NAMA building blocksReduced Taxation MeasuresCapacity Development

PHASE 2

Establishing:RE - Displacement SystemsRE - Independent Power ProducerRE Loan FacilityStrengthened Feed-in-TariffCapacity Development

20302016

2023

Phase 1 Ventures Implementation of venture types with 2

different distribution methods:

1. Solar renewable energy community energy centres (RE-CEC) Charging and distributing electricity via

batteries supplied to households

2. Solar renewable energy micro-grids (RE-MG) Low voltage micro-grid, which directly

distributes single-phase AC power to each household

Both of these ventures types have as their backbone a Rural Productivity Zones (RPZs)

Phase 1 ventures: RPZ

Distribution via RE-CEC or RE-MG model

Solar Power Generation

RPZ Community Store/ Energy Shop (CEC model): meet

basic community shopping needs

50 households connected: 2 energy

efficient lights, 1 radio, 1 mobile

charger

Industrial Shed

& Irrigation Station: sewing

machines, motors,

mills, water pump to

irrigate up to 15 ha

Technology Centre:

computer, printer, mobile chargers, TV Clinic

Diesel gen-set back-up

Phase 2 ventures1. Renewable energy at existing rural mini-grids, or displacement systems

(RE-DIS) Installation of six solar PV generation systems at existing diesel power

generation facilities at regional mini-grids

2. Renewable energy independent power producer (RE-IPP) Installation of large-scale

solar PV system adjacent to the existing diesel generation facilities by IPPs

Venture business models

Phase 1: Public private partnership (PPP) Public partner has title / ownership of the assets (generation and

distribution system) Private party operates, maintains, and manages the Energy Service

Providers (ESP) services Bidding process to select private partner

Phase 2: Full private sector Private company will invest equity and take on debt to cover both

the development and implementation costs of a RE-IPP venture

Phase 1 Capacity Development: Institutional Regulation and policy updating Documentation: creating templates required for data collection, etc Staffing:

NAMA Coordinating Authority hiring of international and national staff

Establishment of all governance bodies

Phase 1 Capacity Development: Training & Marketing Trainings of different stakeholders:

NAMA Coordinating Authority national staff Trustee & Financial Institutions Public sector Private sector

Marketing e.g. Launch events NAMA website Radio campaign Newspapers

Private Sector• NAMA opportunities• Business plan

development• Rural electrification• RE opportunities &

challenges• RE technicalities

Financial Institutions• NAMA opportunities• Rural electrification• RE opportunities &

challenges• RE in The Gambia• Innovative financial

mechanisms

Community• Rural electrification

using RE• Consumer

technicalities• RPZ opportunities• Entrepreneurship

Trainings

Financial Mechanisms (1/2) 2 sources of finance

National International

Various mechanisms of financing Budget allocation (national)

From taxes / surcharges (e.g. national electricity surcharge) or national budget items allocated for specific purposes

Reduced national taxation (national) Build upon the tax holidays included in the Investment and Export Promotion

Agency Act Consumer payment schemes (national)

Pre-payment is preferred scheme

Financial Mechanisms (2/2)

Direct investment grants (international) Operations Subsidy Funds (international & national)

Provides subsidies to ventures Loan facility

Revolving Loan Fund Loan Credit Programme

Indicative Costs of NAMA (1/2)

N

NAMA Venture Investments Phase 1 RE-CEC Implemented (#) 8 RE-MG Implemented (#) 8 International Component (equity) (US$) 9,861,213 International Component (debt-credit) (US$) - National Gov Component (equity) (US$) - Private Sector (equity) (US$) - Phase 1 – Total (US$) 9,861,213 Phase 2 RE-DIS Implemented (#) 6 RE-IPP Implemented (#) 1 International Component (equity) (US$) - International Component (debt-credit) (US$) 13,122,669 National Gov Component (equity) (US$) - Private Sector (equity) (US$) 5,624,001 Phase 2 – Total (US$) 18,746,669 Venture Investments Total (US$) 28,607,882

MINISTRY OF ENERGYE

Indicative Costs of NAMA (2/2)

N

NAMA Venture O&M Costs Phase 1 National Gov Component (subsidy) (US$) 6,629,183 International Component (subsidy) (US$) 2,339,824 Consumer Payments (US$) 2,209,728 International Extension and Expansion Funds (US$) 1,030,400 National Extension and Expansion Funds (US$) 836,267 Phase 1 – Total (US$) 13,045,401 Phase 2 National Gov Component (subsidy) (US$) 2,170,352 International Component (subsidy) (US$) - Consumer Payments (US$) 17,053,683 International Extension and Expansion Funds (US$) - National Extension and Expansion Funds (US$) - Phase 2 – Total (US$) 19,224,035 Venture O&M Costs Total (US$) 29,929,612

MINISTRY OF ENERGY

Summary of NAMA Targets for GHG Emissions Reductions and Sustainable Development

MINISTRY OF ENERGY

Target Indicator

Reduce GHG emissions Target emissions reductions of 12,748 tCO2 from Phase 1 ventures over the 15 year venture lifetime and 109,937 tCO2 from Phase 2 ventures over the 15 year venture.

Contribute to sustainable development 320 SMMEs created 320 new jobs for females, 320 new jobs for males 3,112 hrs of equipment use in the RPZ 800 households connected 20 public buildings connected

NAMA GovernanceCoordinating

Authority• Oversee day

to day NAMA operations

• Technical advisor

• Focal point for ESPs and other stakeholders

• Coordinate activities and MRV

• Full time national staff + international advisor

Approval Committee

• Provide strategic vision

• Final say in financial allocation

• Part-time national and international partner representatives

Venture Approval Expert

Group• Technical level

of experts • Overseeing

the processes to include new ESPs/ventures into the NAMA

• Part-time national and international representatives

Trustee

• Financial oversight of capital

• Directly allocates financial resources

• Accredited national/ regional/ international entity

Phase 1 Implementation SchedulePHASE 1 - STEP / YEAR 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Establishment of pre-Phase 1 conditions

0: Mandate for Operations & Venture Approval Process & Recruitment of Int. Advisors

1: Venture Screening and Feasibility Studies (RE-MG & RE-CEC)

2: Venture Approval 3a: Establish Operations Subsidy Fund

3a: Competitive Bidding for Implementation of Ventures

3b: Competitive Bidding for PPP

- First ventures construction &commissioning

4: Inclusion of new Individual Ventures (continual)

5a: Oversight of Implemented Ventures (continual)

5b: Approval for Subsidies (continual)

Phase 2 Implementation SchedulePHASE 2 - STEP / YEAR 7 8 9 10 11 12 13 14 15

Establishment of pre-Phase 2 conditions 6a: Feasibility Studies and Approval Ventures (RE-DIS)

6a: Feasibility Studies and Approval Ventures (RE-IPP)

6b: Establishment of RE Loan Facility and Strengthened FIT

7: Competitive Bidding for Ventures (RE-DIS) 7: Competitive Bidding for Ventures (RE-IPP) - First RE-DIS ventures implementation and commissioning

- First RE-IPP venture implementation and commissioning

MRV Approach

NAMA GHG accounting and monitoring is build on the CDM Small-scale Methodology: AMS-I.L.: Electrification of rural communities using renewable energy, Version 03.0. The baseline scenario assumes the use of fuel-based lighting systems, stand-alone power generators, and fossil fuel based mini-grids (UNFCCC, 2014).

In the Gambian situation, the application of suppressed demand translates into the baseline scenario being that all people have basic human needs met through the use of the fossil fuel technologies previously mentioned.

Phase 2 of the NAMA includes two different venture models which provide electricity to consumers who are already grid connected, either to diesel powered regional mini grids or to the GBA grid. Therefore, the baseline scenario for consumers connected to the regional mini grids is the use of electricity generated by diesel generators. The baseline scenario for consumers connected to the GBA grid is the use of electricity generated by the five thermal power plants connected to the GBA grid.

NAMA Coordinating Authority

ESPs

Consumers

Auditor

MRV reporting

NAMA Coordinating Authority

NAMA Approval Committee

Domestic Financiers

Trustee

International Financiers

Governance reporting structure

ESPs

Conclusion

NAMA offers opportunity for large-scale emissions reductions and sustainable development benefits which lead to transformative change

Variety of financial sources and mechanisms required Participation of numerous ministries/government agencies,

financial institutions and private sector is vital The design document provides NAMA design but national and

international partners must now be sought

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