Sector Wide Approach SWAp Organizing Planning Implementation and

Sector Wide Approach (SWAp) - Organizing, Planning, Implementation and Financing Universal Electricity Access Rwanda National Electrification Program Experience, lessons, implications Arun P. Sanghvi Consultant Workshop on Achieving Universal Electricity Access in Myanmar Naypyitaw, May 31 – June 1, 2013 master may 30 6 pm 1

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Organization of Presentation Ø Sector wide approach (SWAp) - What is a SWAp? architecture differs from other approaches used to plan, finance and implement development projects Ø Rwanda National Electrification program (NEP) - SWAp experience – – – National context and drivers SWAp building blocks Prospectus - from vision to Key policy and planning issues Implementation results to date implementation Ø Lessons – Implications for Myanmar 3

Government leadership and policies make the difference International experience Population without Access to Electricity and poverty prevalence (2008)

Anatomy of a SWAp organizing framework “Many Partners, One Team, One Plan” Ø Country-owned and led, results focused, longterm sector development program Ø Brings together development partners and other stakeholders to coordinate aid effectiveness within the sector Ø Implementation aligned with national development priorities and targets Ø Traditionally used to coordinate investments in schools and health clinics; but now being deployed effectively for scaling up electricity access nationwide (Rwanda, Kenya, Indonesia, SE 4 ALL) Ø Sustainable and predictable funding anchored by a least cost sector-wide investment plan for national electrification program; integrating technical, financial and implementation. Government Developmen t Partners Consumers Private Stakeholder s SWAp Stakeholders Sector Ministries Utility Regulatory Authority Local Government Shift from piecemeal aid delivery, project-by-project, donor-by-donor to programmatic, results-focused implementation framework 5

Rwanda National Electrification Program – clear vision and targets Post-conflict imperative for rapid scale up of productive infrastructure for powering accelerated growth and social sector services delivery, and meeting basic energy needs 6

Rwanda NEP SWAp – building blocks Ø July 2008 - Energy Sector Working Group (SWG) established. Mo. U signed - Ministers of Finance and Energy, and senior development partners Ø Bankable Prospectus prepared (2009) - high level information document anchored by : – Geospatial least-cost national rollout program 2010 -2030 (grid and off-grid) – Integrated with most effective renewable energy supply sources – Connection costs based on affordability – Explicit cost reduction strategy – Transparent and sustainable financing platform agreed jointly with development partners 7

Rwanda Prospectus Scope • Task 1: Rapid appraisal and readiness assessment (Sept – Oct. 2008) – institutional framework – key institutions – Technical, financial, policy, regulatory, capacity • Task 2: Geospatial least-cost grid roll-out + off-grid plan fro national electrification • Task 3: Review adequacy of bulk power supply system and investment requirements

Prospectus Scope …. Rwanda • Task 4: Sector financial analysis & projected financing (balance sheet, sources and uses of funds) – Investment and recurrent costs – Revenues from tariffs, efficiency improvements, utility self generation – Government equity transfers, other committed financing • Task 4: Draft Prospectus and first round Donor review (January 2009) • Task 5: Final Prospectus and Donor Financing Round Table to address financing gap (March 2009)

Geospatial least cost national electrification plan Grid extensions and rollout coordinated with off-grid complement • Physical plans and investment cost for increasing electricity access for households, health centres, administrative offices and schools, consistent with policy targets and with overall sector growth • Comprehensive GIS (Geographical Information System) data base - • Population density, economic activity areas, priority social institutions (health centers, schools, administrative offices) data from National Bureau of Statistics, National GIS Centre, MINALOC, MINEDUC, MINISANTE, MININFRA, ELGZ Digitization of existing and planned national electricity grid Affordability based on household income and expenditure data Supply options off-grid - Micro-hydro mini grids, diesel grids, solar home size systems, charging products

Total Connections • Current Electricity Network More than 60 per cent of population live within 5 km of existing network Population Coverage 110, 00 0 6% Social Connections Schools 21% Health centres 74% Admin offices 67%

Transitional off-grid areas shrink as grid rollout expands AFREAplanning Support for Energy Sector SWAps Rapid spatial platform utilized in Rwanda 12

• Population Density Source: CGIS-NUR, Ministry of Local Government – National ID Project, Ministry of Infrastructure, National Institute of Statistics, Rwanda

Health Centers • • 74 percent of health centers currently have access Sources: MINALOC, MININFRA, MINISANTE

Secondary Schools • • 21 percent of schools currently have access Sources: MINALOC, MININFRA, MINEDUC

Administrative Offices • • 67 percent of administrative offices currently have access Sources: MINALOC, MININFRA

Affordability of Electricity by District • Percent of population with expenditure of less than US$1. 25 per day • Source: EICV 2 Survey

GIS-Based Rapid Spatial Planning Platform Powerful Planning Tool for National Electrification Program Rollout to meet time bound targets 18

2009 Grid Program Total Connections Population Coverage 146, 969 7% Social Connections Schools 27% Health centres 82% Admin offices 69%

2010 Grid Program Total Connections Population Coverage 204, 397 10% Social Connections Schools 35% Health centres 88% Admin offices 83%

2011 Grid Program Total Connections Population Coverage 270, 380 13% Social Connections Schools 43% Health centres 93% Admin offices 92%

2012 Grid Program Total Connections Population Coverage 350, 000 16% Social Connections Schools 50% Health centres 100% Admin offices 100%

Total Connections Access Programme to 2020 Population Coverage 820, 00 0 36% Social Connections Schools 68% Health centres 100% Admin offices 100%

Spatial least cost national electrification rollout in Rwanda Support for Energy Sector SWAps grid and off-grid, AFREA 2009 -2020 24

Electricity access planning for national electrification SWAp - sector-wide national electrification planning platform - Spatial least-cost national grid (and off-grid complement) integrated rollout investment & implementation plan proved to be extremely effective: • Seen as a national development plan rather than a electricity sector plan • engaging all key stakeholders (in country and external) • rallying development Partner contributions • Modest cost and frequent updates – resulting in a dynamic planning platform: Classical style “RE Master Plan” overly cumbersome (2 -3 years) high cost (1 -2 million $) updated less frequently static in representation of changing conditions over time (grid rollout, demand, priority locations); project here and there and now and then approach when donors come “shopping” 25

Balancing affordability for new users, improving financial health of national utiltity, and program financing on a sustained basis Planning for affordability Controlling costs Ø Technical specifications were revised: – Changing from lattice framed steel towers to wooden poles (below) – Usingle-wire earth return (SWER) lines in rural areas Ø Using local manufacturing for required materials, wherever possible Ø Doubling contract sizes to gain economies of scale Targeted cost reduction per connection: US$1, 000 (in 2009) to US$600 (in 2013) due to planned efficiencies ØThe proportion of households that live on less than US$1. 25 per day is between 50% and 80% in most areas ØBut affordability analysis showed a relatively high willingness to pay for electricity Despite low income levels in Rwanda, analysis showed that 370, 000 hhs would be willing and able to pay cost of grid connection and recurrent charges 26

Sustainable Financing Policy Platform Underpinning NEP- SWAp Prospectus time slice 2010 -2014 Consensus built around “ 80 -10 -10” policy for first SWAp Prospectus Concessionary finance from Donors on-granted to ELGZ , with policy to be revisited for second SWAP time slice post 2014 Financially sound utility - Utility expected to contribute 10% to capital costs (from on -going tariff revenues) - Investments in new generation also funded from tariffs Connection charges based on ability to pay - Consumers expected to pay nominal US$100 connection charge Government and donor support - Needs to meet remaining 80% of costs Programme Costs 27

Partner Pledges - Prospectus Donor Financing Round Table (Sum) Programmed Donor Contribution World Bank+GEF 78. 3 Dutch Government 45 JICA 25 African Development Bank 50 Committed Donor Funding (Off Grid) European Commission 35 New Partners BADEA 10 OFID 10 Saudi fund 10 Government Contribution ($10 m/yr. ) 50 ELGZ 27 Customers 27 TOTAL financing 357. 3

Donor financing Roundtable, Kigali, April 2009 Matching NEP investment and TA costs with syndicated financing 29

Rwanda NEP –SWAp Key outcomes and implementation results Ø Donors Round Table April 2009 - successful syndication (financing) pledges of US$225 million for first slice of the program (2009 -2013) identified in program Prospectus. Donors uniformly commented that the Prospectus presented in a consistent, comprehensive and convincing manner: The program is transformative; It is technically sensible; It is economically and financially viable; and it is implementable Ø ELGZ, established the National Electrification Program Management Department integrally within Electrogaz’s corporate structure to oversee planning, design, and implementation, pooling of all funds irrespective of donor, monitoring and evaluation, and Reporting accountability (no more enclave style PMUs ). Ø Commitment to the staged reductions in average unit connection costs - first two years of connections achieved within budgeted unit cost estimates of US$1, 000/connection, Substantially lower cost than pre-SWAp program project averages Ø Program implementation early results – On track to achieve objective of 16% electrification by 2013 Programme Connections (Target and Actual) 2008 Actual 2009 2010 2011 (August) • New connections < 5, 000 32, 995 43, 733 40, 419 • Households connected to electricity 110, 896 143, 891 187, 624 228, 043 2014 Target 30 350, 000

Rwanda lessons – Key Success Factors Ø Strong country ownership and leadership up and down the chain of accountability – Cabinet , MINECOFIN, MININFRA, Other Line Ministries – Health, Education, Environment – Committed National Utility (ELGZ) Ø Linkages to comprehensive and inclusive national vision and priorities – Ensured that the SWAp is aligned with the policy direction of the Government Ø Key stakeholder consensus and buy-in built from outset, through work by the SWG, led by the Minister on Energy – Consultation process, workshops, retreats prepared stakeholders well for the Donor Round Table Ø South-South Cooperation and Training – Technical designs, planning, implementation, logistics Ø GIS anchored data capture and grid rollout planning – Preparation across all key ministries in a coordinated manner Ø Affordable and inclusive – Connection charges set at affordable levels Ø Managing the transition from planning to implementation 31

Key benefits of a SWAp framework for national electrification Ø Increased predictability (and possibly scale) of sector funding Ø Increased transparency and accountability Ø More effective partnerships Ø Increased donor coordination – leading to complimentary investments – less duplication or wasted resources Ø Lower transaction costs of disbursing and receiving donor funds Ø Ensures an appropriate level of input from development partners into policies, priorities, and sector expenditure 32

Other National. AFREA Electrification utilizing Support for programs Energy Sector SWAps Kenya NEP (population 41 million; access ~ 29 %) • Prospectus raised US$1. 5 billion to support government target of 1 million new connections over 2009 -2013; implementation rate scaled up from ~40, 000/yr. to ~ 250, 000 connections/yr. Indonesia Prospectus preparation ongoing (population ~235 million. Access ~ 70 percent) • 75 million w/o access; investment required ~ $700 m/yr. plus generation; implementation rate ~ 1, 000 connections/yr. Ø PNG NEP Prospectus preparation ongoing (population 7 million; access ~ 17 percent) 33

Kenya National Electrification Program Investment Prospectus (2009 -2014) - $1. 9 Billion Generation Total $634 M Cost Breakdown Hydro upgrade Geo (new+ maintenance) Coal (proposed) Amt 27 215 391 Transmission $565 M Distribution $718 M New transmission lines International Tran lines Transformers, Substations PV for schools Isolated Mini grids LV reinforcement Grid Connections 360 195 78 29 90 61 460 6/19/2021 34

Wither Forward - Myanmar's National Electrification Program

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Myanmar’s - National Electrification Program Towards a Brighter Future for All Within a Generation? “Yes we can” 39

cè-zù tin-ba-deh thank you 40