PDF BLOCK A FOR CLIMATE CHANGE MEDIUM SIZE PROJECT
PART I - ELIGIBILITY
1. Project name:
1. GEF Implementing Agency:
Building Sustainable Commercial
Dissemination Networks for Household PV
Systems in Eastern Africa;
United Nations Environment Programme
3. Country or countries in which the
project is being implemented:
Kenya
Tanzania
Uganda
Ethiopia
Eritrea
4. Country eligibility:
Dates each country ratified Convention
on Climate Change.
Kenya: 30 August 94
Tanzania 17 April 96
Uganda 8 September 93
Ethiopia 5 April 94
Eritrea 24 April 95
5. GEF focal area(s), and/or crosscutting issues:
5. Operational program/Short-term
measure:
Climate Change
Operational Program 6: Removing barriers
and Reducing Implementation Costs to
adoption of Renewable Energy .
7. Project linkage to national priorities, action plans, and programs:
All of the countries proposed have stated explicitly in their energy policies and
development plans that rural electrification is part of their national priorities.
In Eritrea, the sufficient, reliable and sustainable production and supply of affordable
energy throughout Eritrea is the main objective of the Ministry of Energy and Mines in
the energy sector (MoEM, 1997). The general policy is to provide energy services based
on a diversified supply of energy sources. The policy aims at improving the living
standards of the population through the provision of affordable energy. It goes on to state
that the implementation of the policy must be mindful of the desire to halt, and in some
cases, reverse the recent trend in environmental degradation, including climate change
causing green house gases. Solar electricity is mentioned as one of the environmentally
friendly source of lighting for households. To this end, preparation of solar radiation
maps for Eritrea is in progress. This work is carried out by the Energy Research and
Training Centre of the Ministry of Energy and Mines and it is based on satellite and
ground station data . Initial results show that the ten day averages exceed 5 kWh/m2d for
most of the country hence Eritrea has a very high potential for the utilization of solar
energy (Habtetsion and Tsighe ,2001).
Uganda faces significant constraints to its continued rapid economic recovery because of
the lack of adequate electrical power to meet economic and social demands. Less than 5
percent of Uganda’s population is served by the Uganda Electric Board (UEB), the
national state utility that maintains and operates the national grid . Just over 85 percent of
Uganda’s population resides in rural areas. Fewer than 15,000 rural households are
connected to the grid , this is considerably less than 1 percent of Uganda’s rural
population. Due to demand and pressure, UEB and Energy Department of the Ministry of
Natural Resources is promoting the expansion and diversification of its rural
electrification programme. However, this continues to receive low priority in the
government ‘s major power development plans. Instead, developments of off-grid
electricity have occurred on a non-coordinated , unplanned basis. As of 1999 off-grid
electrification, i.e. lead acid batteries, gensets, and solar PV units, accounted for more
than 110,000 off-grid households. This electrical transformation is taking place due to
individual and private sector initiative and as a result of growth in Uganda’s rural cash
economy. This experience suggests that new approaches to rural electrification can be
taken that dramatically accelerate the rate of access to electricity in rural Africa. This
project will built on this individual private sector led innovation to accelerate rural
electrification through PV solar.
The Energy Policy of Tanzania, in its rural electrification, states that efforts will be
focused on the electrification of all rural district head quarters by the year 2005. In its
policy statement number 44 it creates a legal framework that is conducive for growth of
renewable energy utilization, including the establishment of the “Rural Energy Executive
Agecncy”. The legal mandate of the agency shall include promotion of applied resseach,
raising awareness and utilization of renewable energy. In section 76, it acknowledges, that
utilization of solar energy in the country is still in its infancy, however the country has a
very high potential for solar water heating and solar electricity.
In the region, the Kenya government has had the most proactive policy statements as far
as PV electricity is concerned. Government policy statements since the early 1980s have
consistently encouraged increased use of PV electricity. The government added solar
energy to its entire national education syllabus in the late 1980s. Perhaps, the most
important government intervention to support solar electricity, was the removal of the 45
per cent duty on photovoltaic (PV)equipment in 1986. Unfortunately Government reintroduced duties and value-added tax (VAT) on PV equipment in 1991in a bid to
increase government revenue. Although this policy placed PV systems at a distinct
competitive disadvantage vis-à-vis government and donor funded programmes, PV
systems continue to sell briskly. However, applying import duties and VAT on solar
systems is still arbitrary due to the ambiguous definitions of equipment and components
set out by the Ministry of Finance. The problem is compounded by the lack of quality
control and code of practices for PV systems and systems component . The government is
in the process of addressing the above problems as it has just received a report from an
energy consortium BCEO, EAA and Fondem, who it commissioned to:
 recommend an appropriate taxation regime for solar PV systems, components, spare
parts and accessories
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
recommend quality and service specifications and guidelines for solar PV systems
and equipment, and
 recommend a mechanism for their implementation and dissemination. This report
entitled “Study on Solar Photovoltaics (PV) Quality and Service Specification and
Market Penetration” was presented to the Ministry of Energy in August 2001. Among
others, the report recommends the use of rural electrification fund to further promote
PV electricity in the rural areas.
Like Tanzania, Ethiopia’s PV infrastructure is still in infancy. Ethiopia Electric Power
Company (EEPCO) serves predominantly urban and peri-urban population. This leaves
almost the entire rural population without access to basic modern energy (i.e. electricity)
services. Less than 4% of the population was connected to the grid as of 1996 (ESMAP).
Access to grid electricity is limited by two factors:

Low household income and
 The physical distance of rural households to the nearest grid lines.
Need for new approaches to electrification are underscored by the large number of villages,
towns, businesses and rural people still unelectrified. In 1996:
 Thirteen towns with populations of over 10,000 were unelectrified;
 80 towns with populations of over 5000 were unelectrified;
hundreds of smaller villages and trading centres are without electricity.
8. GEF national operational focal point and date of country endorsement:
Eritrea
Mesghena, Tekleab
General Director
Department of Environment
Ministry of Land, Water and Environment
Ethiopia
Egziabher, Tewolde Berhan G.
General Manager
Environment Protection Authority
Kenya
K. Omudho, Benard O.
Director
National Environment Secretariat
Ministry of Environment & Natural Resources
Tanzania
Rajabu, A.R.M.S.
Permanent Secretary
Vice President's Office
Uganda
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Kassami, Chris K.
Permanent Secretary
Ministry of Planning and Economic Development
9. Project rationale and objectives:
In rural Africa, there is demonstrable, quantifiable demand for the electrical services that solar
PV can often provide. Where household energy demand is low and homesteads are not located
close together (i.e. where rural electrification is not practical), PV is often a cost effective way to
provide power for lighting and amenities. The most sustainable and viable method of delivering
solar PV products and services to rural markets is through the private sector. However, in Africa
connecting the market demand (middle and high-income rural people) with product supply
(usually companies in cities) requires a sustained effort that addresses all links in the chain. This
project will show how properly developed linkages between companies and communities can
result in self-perpetuating markets for solar technology. Replacing kerosene and petroleumfueled grid expansion with PV can displace significant amounts of CO2 emissions and provide a
“clean development” future.
Introduction
The 5 proposed countries have a combined population of over 150 million people, or 30 million
families. Over three quarters of the region’s population are rural-based (this includes
pastoralists), and, of these 23 million rural-based families, more than 20 million have no access
to electricity at all. For their lighting, communication and entertainment needs, they rely on
kerosene, dry cells and centrally-recharged lead-acid batteries, which provide poor service at
high costs. Furthermore, there are high local and national environmental costs associated with
these fuels.
For household needs, solar electricity is a viable and cost effective alternative to kerosene, dry
cells and lead acid batteries. Small household PV systems and lanterns range in costs from under
$200 for a one light and radio system to $1500 for a large system which can power a video/TV
unit and light 6 rooms. There has been much successful experience with solar electric systems
for lighting, communication, health care and water pumping in the region. Given the huge unelectrified market in the region, PV should be able to supply a significant portion of the unelectrified population with entry-level electric power.
The world-wide solar industry has grown from less than 10 MWp production per year in the
early 1980’s to almost 300 MWp production per year in 2000. Over the past 5 years, equipment
prices have been steadily dropping and the industry has been growing at a rate that is over 20%
per year. However, more and more of the production is moving to large-scale grid connected
systems in the North (i.e. Germany, Japan). Despite the obvious potential for PV to supply the 2
billion rural people in the world with basic electric services, the industry is increasingly serving
Northern demand because it is easier to sell modules in the north than in the south. While
subsidized programs in the North help build demand there, there is a corresponding need to assist
industry to build demand in the south.
Market surveys verify that there is a viable demand for solar electric products and appliances in
the East African region. Surveys have been conducted by UNDP/ESMAP (Uganda, Kenya),
Shell Foundation (Uganda, Kenya, Ethiopia) and the InterGovernmental Authority on
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Development (Ethiopia, Eritrea). This demand is fueled by a rural middle class which owns (or
aspires to owning) various amenities (radios, lamps, TV’s, stereo systems, etc.). In the proposed
countries, this economically active group makes up between 5 and 25% of the rural population.
In many cases, this group is willing to outright purchase a PV system.
However, significant commercial development of the potential PV market has only occurred in
one country (Kenya). In the other countries addressed by this proposal, commercial development
of the market has not occurred. This project will address the primary barrier to development of
the PV market, which is poor linkage between the supply and demand for the technology. Other
barriers (see below) will be systematically addressed in the project activities.
Lack of finance is often cited as the major barrier to development of PV markets --- but this is
only part of the picture. Development of PV markets has as much to do with local private sector
interest in the technology, availability of equipment (such as modules and batteries and DC
appliances) and market awareness as it does with consumer incomes. Without a private sector
infrastructure supplying the pieces, a market will not develop. Equipment needs to be delivered
from cities to remote customers. This requires a whole network of players including importers,
distributors, assemblers, technicians and marketing agents – none of whom will invest if they
don’t understand the technology and the potential demand. The required pieces are only in place
in a handful of countries. In some countries, awareness among sellers and among rural consumers
is low or non-existent. In other countries, such as Eritrea, there is a great deal of experience with
PV, but it is all in the hands of a Government agency, and it is only used to deliver PV for
applications that donors are willing to pay for.
Potential of PV SOLAR HOME SYSTEM to reduce GHG emissions
Presently, 150,000 SHS are already in place in Kenya averaging 20 Wp which means that present
GHG substitution is already well above 15000 tonnes/ CO2 per year. If the 5 other countries
could match Kenya’s PV success, a much more significant CO2 emissions reduction target could
be achieved. In addition, PV electric lights create a considerably cleaner indoor atmosphere for
study and reading than smoky kerosene lamps. This project targets an emissions reduction of
3000 tonnes over a 5 year period in the 5 target districts. However, the market-building aspects
of the project, and its partnership with other programmes, should result in a net emissions
reduction which is 5-10 times the figure for the target districts.
PV systems for rural electrification have a relatively low CO2 reduction per system, and would
seem to be a poor candidate for GEF funding. However, CO2 displacement per kWh rate is much
higher (as much as 10 times) for off grid PV than grid-connected PV because off-grid PV directly
displaces kerosene use. For example, "…a 40 Wp module connected to electric grid in US would
displace 40 kgs CO2 /year while a 40 Wp module connected to a Kenyan household would
displace 350 kgs from inefficient lighting"1. This high incremental decrease in CO2 output,
combined with high incremental increase in living standard make solar home system an attractive
technology for GEF funding.
Reduced GHG emissions from PV systems would come from:
1) Substitution of electric lights for kerosene lamps. If average kerosene use in Kenya is 5-
1
"Rural Electrification with Solar Energy as a Climate Protection Strategy", REPP.
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15 l/mo. per family, emissions reduction per system would be on the order of 130 - 400 kgs
CO2 2 Higher income families tend to burn far more kerosene than low income families; this
means that serving higher income groups with solar home systems has a proportionally
higher GHG use reduction potential.
2) Reduction of GHG emissions from battery charging. This would be on the order of 15-30
kgs CO2/year for 50-100 Ah battery for grid based recharging3
Note that electrification with PV has a high value for avoided emissions compared to grid
extension. Usually, households would prefer grid electricity because of the versatility of highvoltage grid power. However, because of the high costs associated with extending lines and
distribution networks to rural communities, most rural communities cannot be reached with
subsidised grid-based rural electrification. During this project, participating areas will be
selected according to several criteria: (a) a low likelihood of being electrified by the grid and (b)
significant household income (i.e. cash crops) to enable purchase of solar lighting systems (c)
ability of the private sector to reach these areas will also be a criteria.
Status of the Industry in Proposed Countries
In the countries that this proposal addresses, the solar PV delivery and marketing infrastructure is
at various states of development.



Kenya is a model for commercial PV development. The industry has a strong private base,
active promotional activities and creative sales – Kenya’s market has consistently stayed at
about 500 kWp per year since 1998 (this is worth over US$6 million). Over 150,000
households (3% of the rural population) have a solar system. Other PV installations in the
country include several hundred PV water pumps, institutional power systems, electric
fencing, communication systems, and health center fridge systems. Real progress is being
made in building sales to less affluent groups through customer credit and competitive
pricing. Presently installed PV systems in Kenya (>3 MWp) displace on the order of 15000
tonnes/CO2 per year.
Uganda and Tanzania have a few companies selling solar electric equipment, but the industry
has yet to grow to a size that can address the demand (Uganda’s demand is less than
100kWp/year, Tanzania’s is less than 50 kWp/year). The main reason for this is because of
poor linkages between supply and demand. Low awareness of the technology, high
equipment costs (caused by low trade volumes), inappropriately sized equipment and poor
marketing programmes are the main reason for slow development.
In Eritrea, Ethiopia, the market for solar electric equipment is almost entirely donor led, and
little has been done to develop a commercial market. Eritrea has a very positive experience
with PV for health centres and community pumping systems, but few companies have
entered the commercial market. Ethiopia has several companies that supply PV; these are
primarily set up to supply systems to aid projects.
The IFC/GEF PVMTI project in Kenya (US $5 million) has introduced new methods of
financing solar electric systems to address customers inability to pay high up-front costs for
systems. The programme is anticipated to finance 5 million dollars worth of PV systems
between 2001 and 2002, but thus far no loans have been issued. PVMTI will test the potential
for finance arrangements with solar home systems, and it is likely to open up a wider market.
2
3
1 liter of kerosene: 2.45 kgs CO2, assume 90% displacement?
REPP
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The project is targeted to address the needs of large companies, but is not addressing demand at
local (i.e. community/district) levels. This project will cooperate with PVMTI by seeking to link
up new markets with the finance sources that PVMTI is bringing to the table. It will also help
the successes of PVMTI to be replicated in other countries.
In Uganda, the $1.2M UNDP-GEF Uganda Pilot Photovoltaic Project for Rural Electrification
(UPPPRE) is close to winding up. The project conducted a number of technical courses for PV
businesses, put in place a pilot finance programme for companies and helped organise the
industry into a working group (Uganda Renewable Energy Association). The project did not
address the need for linkages between Kampala and rural target areas. A large World Bank rural
electrification effort (Energy for Rural Transformation) is being planned for the country; it will
include a considerable PV component that the proposed project will collaborate with.
In Ethiopia, there has been little “formal” commercial development work with PV. An IGAD
project has conducted a number of activities to stimulate awareness and activity. These include
1) a PV market survey, 2) technical courses for equipment manufacturers and installers 3)
business awareness meetings and 4) pilot demonstrations in a high potential areas. The pilot
work in Awasso (southern region) has resulted in the commercial sales of several score of
systems, and results indicate that there is considerable repressed demand for PV among
households in the country.
In Eritrea, over 500 kWp of PV has been installed; virtually all of this is by donors and a
Government energy centre. There have been a number of training courses and demonstration
installations, mostly coordinated by the Government energy centre (which also maintains many
of the country’s PV systems). IGAD conducted a market study for commercial PV solar home
systems in Eritrea in 2001. IGAD will shortly conduct a national stake-holders awareness
workshop and an exchange visit for Eritrean entrepreneurs to Kenya.
In Tanzania, a number of small initiatives have been conducted (mostly by NGOs) to promote
PV (i.e. the Karadea Solar Training Facility). However, the size of the country and the isolation
of many of the high potential areas (Mwanza, Mbeya, etc) has prevented development of the
industry. The Dutch Government has approved a $500k two year project which will assist the
development of joint Dutch-Tanzanian company. As well, UNDP-GEF is currently developing a
PV initiative targeted for Mwanza and the lake region.
WHAT BARRIERS STILL EXIST AND NEED TO BE ADDRESSED
The view of the proposers is that the chief barrier to the development of the industry is the lack
of commercial infrastructure for sales and delivery of PV equipment. Existing sales of radios,
pressure lamps, cassette players, bicycles, lead-acid batteries and other amenities in the region
indicates clearly that there is ample demand for the power that solar can provide. The key is
mobilising companies to supply PV equipment in packages that are appropriately sized and
priced for rural customers. There must be clear channels for dissemination of information and
equipment from importer to dealer to consumer.
Commercial Infrastructure. Development of sustainable delivery channels for the PV systems
will continue to be the major obstacle the industry faces. This project will demonstrate how,
once established, commercial infrastructure can sustainably service consumer needs at the rural
levels using dealers and sales agents. The project will help companies identify viable market
areas and extend their reach into such areas. It will transfer the positive aspects of Kenya
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industry development model to other countries.
Awareness. Low awareness of PV and its capabilities is a major barrier to the development of
the market. Awareness is lacking on several levels, first with business and second with
communities.
The project will help companies learn about the solar business and how it operates in their
country. Young PV companies are often unaware of international suppliers and sources of
finance, how to develop the market in a cost-effective fashion, and how to get their businesses
together. In addition, rural agents and installers are often unfamiliar with the technology. If they
do not know about it, they cannot design or market systems effectively, and they certainly cannot
properly install systems.
On the community side, there is also low awareness of what PV can do. Rural consumers must
be given a balanced view of the PV technology. To develop awareness, demonstration of
commercially viable appropriate technology is crucial, especially in the early stages, but the
demonstration must be followed up with aggressive marketing efforts.
Policy. Commercial PV has not been incorporated into most countries’ rural electrification
programmes. In some nations, where 98% of the rural population is still unserved by grid, policy
makers are still thinking in terms of the grid alone, and haven’t considered PV. For example, in
Ethiopia and Eritrea, few policymakers are aware of the role PV can play in rural electrification,
or how it should be applied. If the policymakers don’t know about it, they may be hindrances,
rather than drivers, to market-driven expansion. PV does not compete with the grid – properly
applied PV complements grid power.
Once policy makers are aware of the benefits of PV for rural populations they are usually willing
to make crucial policy adjustments (i.e. lowered duties and taxes on PV) to make PV more
available. The Kenya and Uganda Governments have both adopted positive policy programmes
for PV due to sustained lobbying on the part of industry and donors.
Pricing and Financing of Systems. The rural population’s low capacity to pay for PV
technology is often cited as the primary barrier to the development of the market. However,
finance is not the only method to reduce costs. PV products need to be priced so they can better
meet the needs of those with low incomes. Kenya’s market thrives on sales of 12 Wp small
systems, and average system price is under $300 (even if the services are limited). PV companies
need to consider that rural people now spend US$5–10 per month on kerosene and dry cells. This
means that the products need to be priced so that they are accessible. Smaller, expandable kits
are well-suited to this market.
Credit for purchase of systems will also be a key to development of the market, but only where
micro-credit agencies are successful and willing to get involved. In Kenya, PVMTI has been
instrumental in raising private bankers’ awareness of PV. Once rural financiers see how PV fits
into their viable portfolio, they are happy to expand into PV. This project will link PV system
suppliers to interested micro-finance partners.
The Project Strategy for Eliminating Barriers to PV Market Development
PV market development is about more than just moving technology, it is about building country
skills and developing the delivery chain for PV, so that the product is affordable to consumers.
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Through this project, companies will be assisted to actively reach into rural areas and build rural
markets. They will be given incentives to reach into communities. The project will also use
subsidized ‘public systems’ to prime the market and springboard commercial system
development.
The over-arching objective of this project is to improve the commercial delivery of PV systems
to rural areas by facilitating links between international suppliers, regional importers and
manufacturers, local dealers and local equipment markets. The strategy of the project is to create
“commercial delivery corridors” for solar equipment between capital cities and high potential
rural markets in each of the countries. The project will demonstrate how, once various parts of
the delivery infrastructure are in place, PV solar home systems can be traded on a non-subsidized
sustainable basis. The project will exchange experiences between countries in East Africa,
encouraging all stakeholders but particularly companies and policy makers to take up bestpractice positions.
Project objectives:
1) In each country, to create one sustainable “commercial corridor” of PV supply between
importers, dealers and rural consumers in a high potential district. If there is an interested
micro-finance group, the project will also attempt to introduce microfinance in each of the
countries. This demonstration will assist stakeholders to further develop the market in other
localities. Target districts will be chosen during the PDF project preparation phase in
consultation with local stakeholders. Criteria for selection will include: a) low probability of
grid connection, b) local income from cash crops or other industry, c) private sector interest
in developing the particular market
2) To raise awareness among policymakers and development partners about the need for PV as
a part of rural electrification in all countries, and to share policy experiences between the
countries
3) To assist commercial companies to develop viable PV businesses in each of the countries, to
share successful models, and to enhance trade and information links between neighbouring
countries
4) To encourage international PV companies to participate in the development of the business
in East Africa
5) In one rural district of each country, to create awareness and to put in place the required
technical capacity to market, design, install, maintain PV systems for small needs.
10. Expected outcomes:
1) An operational commercial delivery route in place between the capital city and one rural
district of each country. This will include:
• at least one national importer,
• several dealers in the target district,
• at least ten technicians and sales agents in the target district,
• interested community development NGOs
• interested micro-finance groups and
• hundreds of potential customers
2) Educated PV businesses in cities of each countries that are actively seeking to develop
commercial rural markets
3) A network of influential policy makers --- who are aware of the necessity of including PV in
rural electrification plans and will actively lobby for such plans.
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4) Increased participation by international PV companies in Uganda, Tanzania, Eritrea and
Ethiopia.
5) As a direct result of project activities, installation of more than 750 PV solar home systems
in the targeted districts, and a measurable growth in the rural PV sales in Uganda, Tanzania,
Eritrea and Ethiopia. Five years after the project, we expect that 3000 systems will have
been installed in the 5 districts.
6) The project will reduce carbon emissions from kerosene lanterns in 5 districts. From systems
installed within the project timeframe, a relatively small amount of reductions would be
experienced (i.e. <300 tonnes/year per district). However, there are two points that need to
be considered: a) if each of the PV sectors continues to grow sustainably, within 5 years the
5 target districts would have a combined cumulative CO2 displacement of almost 3000
tonnes from 3500 installed systems. b) If the companies applied the methods learned to other
districts, we would expect the CO2 displacement to be 5-10 times that experienced in the
target districts. Ethiopia would be likely to surpass Kenya’s present level of 15,000
tonnes/year displaced due to PV systems (see Annex)
11. Planned activities to achieve outcomes:
1) Exchange visits for entrepreneurs to Kenya and at least one other PV success country (i.e. Sri
Lanka)
2) Trade visits by international and Kenyan companies to participating countries
3) Policy meetings with Government and industry representatives in each country
4) Business meetings with solar industry in each country and assistance in business plan
development for rural and urban based companies
5) On-going awareness and demonstration programmes in each selected district. These
activities will include:
a) General awareness and information meetings among all stakeholders,
b) business meetings between local and urban suppliers,
c) sales training and on-going support for sales programmes
d) use of multi-media (plays, video, radio and print) to increase rural outreach of solar PV,
e) technical training courses for participating companies
f) installation of project-subsidised demonstration systems in each of the target districts.
This would include schools, clinics, public battery charging systems, etc. based on the
requirements of the target district.
6) Facilitation of links between credit providers with rural customers and PV suppliers in need
of finance. This will include development of linkages between larger players (such as Solar
Development Group/Triodos/PVMTI) and regional players (country-based finance
organisations) and regional players and local players (i.e. Savings and Credit Associations,
consumer credit groups, dealers, etc).
12. Stakeholders involved in project:
Energy Alternative AFRICA, Ltd. (overall project manager). EAA will manage the project and
coordinate the activities. Much of the technical expertise for the project will be provided by
EAA staff.
Cooperating agencies in each country (to be determined). One cooperating agency will be the
local representative of the project in the country. It is preferable that this group be a consultant
or NGO body, as the focus of the project will be collaboration with the industry.
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International Solar Electric Companies including BP Solar, Shell Solar, Sollatek, Free Energy
Europe, Morningstar, Kyocera, Neste Advanced Power Systems, Solar Electric Light Company,
etc..
Solar Electric Suppliers and Dealers in each country
The following is a partial list of companies which EAA has links with:
1. Kenya: Chloride Exide Limited, Sollatek Kenya Limited, Solagen,
2. Uganda: Incafex, Ltd., Solar Electric Systems for Africa,
3. Tanzania: Mona Electricals (Mwanza), Jua Umeme, BP Solar Tanzania
4. Ethiopia: Beta Electricals, Direct Solar, Megan Power Ltd.
5. Eritrea: Asmara Solar, DM Electricals
Government Departments concerned with rural energy supply including:
1. Kenya Ministry of Energy, Renewable Energy Department
2. Eritrea Ministry of Mines and Energy, Energy Research and Training Center
3. Ethiopia Rural Energy Development and Promotion Center
4. Uganda Ministry of Energy and Mineral Development, Renewable Energy Department
5. Tanzania Ministry of Energy and Minerals, Renewable Energy Section
Grassroots NGOs involved in community development in each country target district
International and Local Finance Organisations interested in PV. These include the Solar
Development Corporation, PVMTI-Kenya (IFC) and local micro-finance groups, in particular
Kenya Rural Enterprise Programme Bank in Kenya.
Solar PV technicians at local levels
Renewable energy NGOs in each country including:
Solarnet (Kenya)
Uganda Renewable Energy Association
Solar Innovations of Tanzania, TaTEDO
Associations in Ethiopia and Eritrea as they develop
PART II - INFORMATION ON BLOCK A PDF ACTIVITIES
13. Activities to be financed by the PDF A:
PDF A resources are being requested to formulate a Medium size project brief. Under the PDF
A, the following activities are envisioned:
a) The first task will be to collect documents and to conduct a background study on PV
activities in all countries. This study will collect information from significant UNDP,
ESMAP, IFC, GEF and other multi and bi-lateral project affecting the PV market. This
background study will also collect baseline Government policy, rural electrification plans
and duty/tax information about each of the countries involved.
This information will be used to create a baseline matrix of the various barriers facing each
country so that the project approach to each country can be specifically adapted to country
needs.
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b) Carry out assessments of barriers to PV commercialisation for rural communities in East
Africa. This work will expand on work already completed by IGAD in Eritrea and Ethiopia,
by ESMAP in Kenya and Uganda, and by UNDP and the Dutch Government in Tanzania.
National PV assessments in all 5 target countries will ascertain the current needs of the
individual PV industries.
c) Selection of key district to conduct awareness and capacity-building in based on viability of
commercial markets and interest of companies. Districts will be selected in consultation
with the industry, the Government and local consultant partners.
d) Targeted household, institutional and commercial PV demand study in each of the selected
districts
e) National stakeholders meetings in each country with all industry players to discuss the status,
potential and current barriers and means to overcoming them
f) Conduct workshops with project stakeholders in each country to discuss project design,
expected outcomes, objectives and activities, and to determine priority concerns and
expectations. With information from the workshop, prepare the stakeholder participation
plan.
During country visits, key stakeholders will also be consulted individually and consulted to
help shortlist “high potential” target regions for participation in the project.
In country experts will be hired to provide full information on i.) current status of the PV
industry, ii) relevant policies and tax status, iii) detailed information on planned and past
projects.
g) Write a project brief and draft project document detailing the project components. The
project brief will be written according to GEF criteria and guidelines. The project brief will:
i) clearly detail the principal barriers affecting PV rural electrification in the region;
ii) analyse the current PV electrification baseline to determine the extent to which national
development plans and programmes in Kenya, Tanzania, Eritrea, Ethiopia and Uganda are
supportive of removal of barriers to PV development:
iii) identify existing gaps in the baseline and the corresponding actions needed to effectively
mitigate the remaining barriers;
iv) determine whether required actions are incremental in nature and therefore eligible for
GEF financing (i.e. activities or measures which cannot be justified on grounds of domestic
benefits alone and which are far more likely to generate global benefits as opposed to
national or local ones);
v) include a monitoring and evaluation plan.
vi) Determine whether local companies are eligible for SDF/SDC Funding
13. Expected outputs and completion dates:
A complete Medium Sized Proposal will be developed within four (4) months with full
participation of all major stakeholders
12
a) A detailed assessment of the remaining barriers to commercial PV development in rural areas
of the participating countries.
b) Medium-size project brief, in GEF format, including:

logical framework that clearly describes the project strategy, project outcomes,
global and national benefits;

incremental cost analysis;

stakeholder participation plan 1) PV players, 2) financial institutions (banks, MFI) ,
3 others (LPG companies, other potentially interested commercial players, utilities)

monitoring and evaluation plan;

and other components per requirements of the MSP format.
c) The PDF A will be used to secure donors to finance the non-GEF component of the mediumsize project.
d) List of all financial players and other interested stakeholders
e) Full copy of all reports/documents utilised during the study
13. Other possible contributors/donors and amounts for the Block A:
Solar Development Group has agreed to co-finance this work with a $5000 dollar contribution.
16. Total budget and information on how costs will be met for the Block A (including the Block
A grant):
Consultancy
1. International consultant
$10,625
2. Local in-country consultants to prepare
back-ground information
$6,875
3. Travel 4 Return Air tickets (includes visas)
a. Ethiopia,
$450
b. Eritrea,
$700
c. Tanzania and
$450
d. Uganda
$400
4. Daily Subsistence Allowance
$1,920
5. Telephone/Email
$500
6. Five day workshops
$2,500
Total
$24420
Notes on budget
1. 25 days of effort at $425 per day. This includes 3 days in each country.
2. Lump sum payment of $1375 to each of 5 local consultant for research work on PV status in
country and for organising stakeholders meetings.
3. Travel costs include visas and airport tax.
4. Daily subsistence allowance. $120 per day x 4 days in each of 4 countries. Includes meals,
13
lodging, taxis, etc.
5. EAA DHLs, phone and communication
6. 5 one day workshops. Each workshop will include 25-30 stakeholders from the country.
PART III - INFORMATION ON THE APPLICANT INSTITUTION
17. Proposing Agency
18 Date of establishment, membership, and
leadership:
Energy Alternatives AFRICA, Ltd
PO Box 76406
Nairobi, Kenya
Tel. 254-2-714623/
Fax/Tel: 254-2-720909
Email: <energyaf@iconnect.co.ke>
Established in 1993.
Became a 50% owned joint venture of Energy
for Sustainable Development (UK) Ltd. in
1998.
EAA is locally registered in Kenya as a limited
company active in the area of energy and
development consulting. has a full time staff of
8 consultants and support staff with expertise
in rural energy planning, project design and
management, energy management, off-grid
system design and installation and renewable
energy training.
Board of Directors:
Mark Hankins (Chair, American)
Daniel Kithokoi (Kenyan)
Bernard Osawa (Kenyan)
Mike Bess (ESD UK)
John Malone (ESD UK)
18. Mandate/terms of reference:
17. Sources of revenue:
EAA’s mission is to help build local
sustainable energy infrastructure by providing
technical, policy, training and management
expertise in Eastern, Southern and the Horn of
Africa. We work in partnership with clients
ranging from local communities to industry to
international organizations to help them choose
energy options appropriate to their needs.
Energy Alternatives AFRICA Ltd. is a joint
venture of Energy for Sustainable
Development. ESD and EAA’s combined
turnover is over US$2 million per annum from
a variety of clients including :
14

World Bank

European Union

Dutch government

Kenyan government

IGAD

DFID

GTZ

UNDP GEF Small Grants Kenya

USAID

IUCN

ITDG

Shell Foundation

Winrock International

Ashden Charitable Trust

Commonwealth Science Council (UK)

Various Kenyan hotels and institutions
including Safari Park Hotel, Mater Hospital,
Crater Lake Hotel and others.

Booker Tate Ltd.
17. Recent activities/programs, in particular those relevant to the GEF:
EAA is currently managing several PV technology commercialisation projects in the East Africa
region.
 On behalf of IGAD and the European Union, EAA is currently working with companies in
Ethipia (Addis and Awasso) to increase develop the market for PV in the region. The project
is scheduled to end in October 2001. The project also includes promotional work in Eritrea.

EAA is working for the Dutch Government’s PSOM project in Tanzania. The project is
helping to establish a Dutch-Tanzanian solar PV company. EAA is providing expertise on
market development and technician training.

EAA was recently hired on a 2 year USAID-funded project managed by ADRA to assist in
development of renewable energy infrastructure in Puntland, Somalia.
Other EAA projects include:
Renewable energy training: EAA has more than a decade of experience in training technicians,
NGOs companies and projects about all aspects of renewable energy technology. EAA has
conducted PV training courses in Kenya, Uganda, Malawi, Zimbabwe, Somalia and Tanzania for
UNDP-GEF, IGAD, the European Union, GTZ, DANIDA, the Commonwealth Science Council
and private companies
Renewable energy demonstration and company assistance: EAA has designed , installed and
supported demonstration PV systems in Tanzania, Kenya, Uganda, Malawi, Somalia for a variety
of clients. EAA designs and installs appropriate sustainable energy systems for applications
ranging from hospitals to ecotourism to remote households. Promoting small- and medium-scale
renewable energy enterprises is a key to developing the overall infrastructure of solar energies.
EAA has assisted in the incubation of scores of businesses in the region.
Financing of RET businesses and end-users: EAA has worked with a number of finance
groups to catalyse finance programmes that meet the needs of rural communities and businesses
alike. EAA designed and ran a project for ESMAP/World Bank to establish a pilot solar home
system loan programme in Kenya (1995-98). In 1996, EAA worked on a pilot solar home system
loan project in Kasase Uganda funded by the US Department of Energy.
15
Product design and test marketing: EAA works in partnership with local and international
groups to develop new RET products that meet the specific needs of the region. Through test
marketing initiatives we help companies ensure that products will be successful. Recent projects
include test marketing of lanterns (funded by DFID/ITDG and the World Bank) and development
of smaller batteries and specialised PV products for the Kenya market (ESMAP/World Bank and
European Union).
Market study: EAA conducts market studies for RET products throughout the East African
region. We have conducted PV market studies in Ethiopia, Eritrea, Kenya, Tanzania, Uganda and
Somalia for ESMAP/World Bank, the Dutch Government, the European Union and others.
Clean Development Mechanism. EAA/ESD is working with Booker-Tate and the Prototype
Carbon Fund to develop East Africva’s CDM project. The proposed project (which has been
issued a letter of intent by the World Bank) is a grid-connected 15 MW cogeneration plant fueled
by bagasse from sugar outgrowers in Busia, Kenya.
Improving biomass production, conversion and end-use technologies: EAA uses proven,
commercially-viable project methods to catalyse better management of forest resources in East
Africa and the Horn of Africa. EAA recently completed a project introducing improved charcoal
stoves in Somaliland and Puntland which was funded by IUCN/EU and the British Lotteries.
PART IV - INFORMATION TO BE COMPLETED BY IMPLEMENTING AGENCY
22. Project identification number: tbd
23. Implementing Agency contact person: Ahmed Djoghlaf, Executive Coordinator,
UNEP GEF Coordination Office; Sheila Aggarwal-Khan, Focal Point for Medium
sized Projects.
24. Project linkage to Implementing Agency program(s):
UNEP’s African Rural Energy Enterprise Development (AREED) Initiative focuses on Ghana,
The Gambia, Senegal, Ivory Coast, Namibia, Zimbabwe and Botswana working in collaboration
with the UNEP Collaborating Centre on Energy and Environment, United
Nations
Development Programme, United Nations Industrial Development Organisation and E&Co.
National Counterpart Institutions include Centre for Innovation and Enterprise Dev. (Ghana),
Botswana Technology Centre, Renewable Energy Information Network of Namibia, Centre for
Energy, Environment and Eng. (Zambia), Biomass Users Network Zimbabwe, African
Development Bank, Development Bank of Southern Africa
The AREED initiative seeks to create a sustainable energy future for the rural poor of Africa by
increasing the capacity of the private sector to offer energy services using clean, efficient, and
renewable energy technologies. Using a proven method of coupling enterprise development
services with modest amounts of start-up financing, the initiative will help seed new businesses
that apply “best-practice” approaches to the supply of modern energy services affordable to the
rural poor in Africa. By creating small and mid-size rural energy enterprises in five African
countries, the AREED initiative will broaden the depth of organizations and people who have the
capacity to nurture energy entrepreneurs. Specifically, the initiative will:
 assist UN agencies to develop and internalize a new methodology for promoting private
sector driven, clean energy technology adoption;
 build the capacity of regional NGOs to identify and support small and mid-size energy
enterprises through their critical start-up phase; and
16
 assist regional financial institutions to better understand and ultimately invest in this sector.
The initiative will deliver actual services “on the ground” and significantly leverage UNF project
money with venture funds from private, foundation, multilateral, and bilateral sources. The
provision of small amounts of enterprise start-up financing linked to enterprise development
services is the most significant innovative and catalytic component of the initiative. This project
will therefore be linked to this AREED initiative.
Annex 1: Expected CO2 Displacement from Project-Related Systems in Districts
Country
Kenya
Year 2
SHS
CO2
installed Displaced
(cum)
(ton/yr)
150
52.5
Year 3
SHS
CO2
installed Displaced
(cum)
(ton/yr)
330
115.5
Year 4
SHS
CO2
installed
Displaced
(cum)
(ton/yr)
516
180.6
Year 5
SHS
CO2
installed
Displaced
(cum)
(ton/yr)
709
248.2
Uganda
175
61.3
385
134.8
602
210.7
827
289.6
Tanzania
150
52.5
330
115.5
516
180.6
709
248.2
Ethiopia
200
70.0
440
154.0
688
240.8
946
331.0
Eritrea
75
26.3
165
57.8
258
90.3
355
124.1
750
262.5
1650
577.5
2580
903.0
3546
Cumulat
2984.1
Assumption: One 40 Wp system displaces 350 kgs/CO2/year in kerosene.
17