MINISTRY OF ENERGY NAMA Design Rural Electrification with

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MINISTRY OF ENERGY NAMA Design Rural Electrification with Renewable Energy in The Gambia 17

MINISTRY OF ENERGY NAMA Design Rural Electrification with Renewable Energy in The Gambia 17 TH TO 19 TH AUGUST, 2015 NAMA REGIONAL WORKSHOP, KIGALI, RWANDA Saidou MS Badjie, Ministry of Energy [email protected] com / [email protected] com

NAMA Design Rural Electrification with Renewable Energy in The Gambia MINISTRY OF ENERGY

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

Content 1 Introduction to Rural Electrification with Renewable Energy Nationally Appropriate Mitigation Actions 2 Rural Electrification in The Gambia 3 Policy Background 4 NAMA Objectives 5 NAMA Ventures 6 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

Rural Electrification with Renewable Energy in The Gambia Electricity Challenges Several challenges burden The Gambia’s electricity subsector such as: Ø 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). ØLack of access to electricity also hinders social development and hinders the delivery of health care and education services in the country. Ø The Gambia is confronted with both infrastructural and financial constraints in providing grid connectivity to rural and remote areas. Ø 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 Gambia Demographics: Smallest country in mainland Africa and is 15 – 80 km

Background Gambia Demographics: Smallest country in mainland Africa and is 15 – 80 km wide and about 400 km long (Napa, 2007). Area of approximately 113, 000 km 2 (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

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

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 on certification of Renewable Energy Plants and range of accepted generation capacity MINISTRY OF ENERGY

5 NAMA objectives 1. Increase the generation and overall share of renewable energy (electricity)

5 NAMA objectives 1. 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

Current Energy use in Rural Areas Kerosene lighting Fossil fuel based generators for economic activities Fossil fuel based generators for residential purposes

Proposed solution Implementation of NAMA using Renewable Energy sources for rural electrification which will

Proposed solution Implementation 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 2016 2023 PHASE 1 Establishing: RE - Micro Grids RE -

Two-phase implementation plan 2016 2023 PHASE 1 Establishing: RE - Micro Grids RE - Community Energy Centers Rural Productivity Zones RE Operational Subsidy Fund Main NAMA building blocks Reduced Taxation Measures Capacity Development PHASE 2 Establishing: RE - Displacement Systems RE - Independent Power Producer RE Loan Facility Strengthened Feed-in-Tariff Capacity Development 2030

Phase 1 Ventures Implementation of venture types with 2 different distribution methods: 1. Solar

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 Community Store/ Energy Shop (CEC model): meet basic community shopping

Phase 1 ventures: RPZ Community Store/ Energy Shop (CEC model): meet basic community shopping needs Industrial Shed & Irrigation Station: sewing machines, motors, mills, water pump to irrigate up to 15 ha Technology Centre: computer, printer, mobile chargers, TV Diesel gen-set back-up Solar Power Generation 50 households connected: 2 energy efficient lights, 1 radio, 1 mobile charger Clinic Distribution via RE-CEC or RE-MG model

Phase 2 ventures 1. Renewable energy at existing rural mini-grids, or displacement systems (RE-DIS)

Phase 2 ventures 1. Renewable energy at existing rural mini-grids, or displacement systems (RE-DIS) Ø 2. Installation of six solar PV generation systems at existing diesel power generation facilities at regional mini-grids Renewable energy independent power producer (RE-IPP) Ø 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 /

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

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

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

Trainings Private Sector Financial Institutions • NAMA opportunities • Business plan development • Rural

Trainings Private Sector Financial Institutions • NAMA opportunities • Business plan development • Rural electrification • RE opportunities & challenges • RE technicalities • NAMA opportunities • Rural electrification • RE opportunities & challenges • RE in The Gambia • Innovative financial mechanisms Community • Rural electrification using RE • Consumer technicalities • RPZ opportunities • Entrepreneurship

Financial Mechanisms (1/2) q q 2 sources of finance National International Various mechanisms of

Financial Mechanisms (1/2) q q 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

Financial Mechanisms (2/2) Direct investment grants (international) Operations Subsidy Funds (international & national) Provides subsidies to ventures Loan facility Revolving Loan Fund Credit Programme

Indicative Costs of NAMA (1/2) NAMA Venture Investments Phase 1 RE-CEC Implemented (#) 8

Indicative Costs of NAMA (1/2) 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$) Phase 2 – Total (US$) 5, 624, 001 18, 746, 669 Venture Investments Total (US$) 28, 607, 882 MINISTRY OF ENERGYE

Indicative Costs of NAMA (2/2) NAMA Venture O&M Costs Phase 1 National Gov Component

Indicative Costs of NAMA (2/2) 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$) 2, 209, 728 International Extension and Expansion Funds (US$) National Extension and Expansion Funds (US$) Phase 1 – Total (US$) 1, 030, 400 836, 267 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 Target Indicator Reduce

Summary of NAMA Targets for GHG Emissions Reductions and Sustainable Development Target Indicator Reduce GHG emissions Target emissions reductions of 12, 748 t. CO 2 from Phase 1 ventures over the 15 year venture lifetime and 109, 937 t. CO 2 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 MINISTRY OF ENERGY

NAMA Governance Coordinating Authority • Oversee day to day NAMA operations • Technical advisor

NAMA Governance Coordinating 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 Venture Approval Expert Group • Provide strategic vision • Final say in financial allocation • Part-time national and international partner representatives • 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 Schedule

Phase 1 Implementation Schedule

Phase 2 Implementation Schedule

Phase 2 Implementation Schedule

MRV Approach q NAMA GHG accounting and monitoring is build on the CDM Small-scale

MRV Approach q 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). q 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 MRV reporting Auditor

NAMA Coordinating Authority ESPs Consumers MRV reporting Auditor

ESPs NAMA Coordinating Authority Governance reporting structure NAMA Approval Committee Domestic Financiers Trustee International

ESPs NAMA Coordinating Authority Governance reporting structure NAMA Approval Committee Domestic Financiers Trustee International Financiers

Conclusion NAMA offers opportunity for large-scale emissions reductions and sustainable development benefits which lead

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

THANK YOU FOR YOUR AUDIENCE

THANK YOU FOR YOUR AUDIENCE