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AFRICAN DEVELOPMENT BANK
MULTINATIONAL
GREEN MINI-GRIDS MARKET DEVELOPMENT PROGRAMME
PHASE 2
PEVP/PGCL DEPARTMENTS
June 2017
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Table of Contents
Acronyms ........................................................................................................................................ i
Table of Contents ........................................................................................................................... 3
1. Introduction ............................................................................................................................ 1
1.1. Regional Context and Sector Issues ................................................................................. 1
1.2. Project Description and Rationale .................................................................................... 1
1.3. Justification for SEFA Intervention .................................................................................. 2
2. SEFA Enabling Environment Grant ....................................................................................... 2
2.1. Objective ........................................................................................................................... 2
2.2. Project Executing Agency ................................................................................................ 3
2.3. Grant Components/Activities ........................................................................................... 4
2.4. Budget/Cost Structure ..................................................................................................... 11
2.5. Outputs and Deliverables of Grant Activities ................................................................. 11
2.6. Implementation Schedule ............................................................................................... 12
2.7. Implementation, Procurement and Disbursement Modalities ........................................ 13
3. Conclusion & Recommendations ......................................................................................... 17
ANNEX I - LOGICAL FRAMEWORK FOR SEFA GRANT ...................................................... I
ANNEX II – KEY ACHIEVEMENTS AND LESSONS LEARNED ........................................ III
ANNEX III - RISK MATRIX ...................................................................................................... V
ANNEX IV - BREAKDOWN OF BUDGET (24 months) ......................................................... VI
ANNEX V - PROCUREMENT PLAN ...................................................................................... VII
ANNEX VI – SEFA GOVERNANCE ..................................................................................... VIII
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Acronyms
AfDB African Development Bank
ARE Alliance for Rural Electrification
AU African Union
CEMG Clean Energy Mini-Grid
DFID Department for International Development (UK)
DSM demand-side management
ECREEE ECOWAS Center for Renewable Energy and Energy Efficiency
ESMAP Energy Sector Management Assistance Program (World Bank)
FEI Debt Fund for Energy Inclusion
GDP Gross Domestic Product
GEF Global Environment Facility
GIS Geographic Information System
GMGs Green Mini-Grids
GVEP Global Village Energy Partnership (now Energy 4 Impact)
HIO High Impact Opportunity
IEA International Energy Agency
IED Innovation Energie Développement
IFC International Finance Corporation
LEAP Lighting and Energy Access Partnership
MDP Market Development Programme
NEPAD The New Partnership for Africa's Development
PECG Climate Change and Green Growth Department (AfDB)
PENP Energy Partnership Department (AfDB)
PEVP Power Energy Climate and Green Growth Complex (AfDB)
PPP Public Private Partnerships
RISE Readiness for Investment in Renewable Energy indicators (World Bank)
SE4ALL Sustainable Energy for All
SEFA Sustainable Energy Fund for Africa
SSA Sub Saharan Africa
UNDP United Nations Development Programme
UNF United Nations Foundation
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Abstract – GMG Market Development Programme Phase 2
Task Manager: Daniel Schroth Grant Beneficiary: AfDB (SE4ALL Africa Hub Team)
Dept. / Division: Energy Partnerships Dep’t (PENP) Grant Amount: USD 3.000.000
Project Description:
In response to the critical need for rural energy and rural development generally, and specifically to the challenges facing
the green mini-grid sector, the SE4ALL Africa Hub at the African Development Bank designed and launched the Green
Mini-Grid Market Development Programme (GMG MDP) with grant funding from the Sustainable Energy Fund for Africa
(SEFA) in mid-2015. The GMG MDP is organized into five work streams or business lines: (1) Market Intelligence –
aimed at providing stakeholders with better information on potential mini grid markets throughout the continent; (2)
Business Development Services – provides web-based and personalized technical assistance to GMG developers; (3)
Policy Support – targets public sector players and the creation of an enabling environment for private sector investments
into mini-grids; (4) Quality Assurance – aims to ensure that any mini-grids developed will be to a standard sufficient to
build a positive reputation for the technologies and business models, to be developed in a second phase of the project; (5)
Access to Finance – provides financing guidance and financing support tools to GMG developers. The Programme has
since become a key source of market information and policy developments on the continent: the GMG Developers’ Help
Desk became the sector’s de facto technical assistance and advisory portal after only five months on-line; on the policy
front, the GMG Africa Strategy, developed under the GMG MDP, has been adopted as the AU’s position on how best to
structure at the country-level the policies and regulations fostering private investment into mini-grid businesses; on access
to finance, the AfDB’s Debt Fund for Energy Inclusion (FEI), also developed with SEFA support and GMG MDP inputs
(approved by the Board in December 2016), inter alia envisages financing of mini-grid projects, while the GMG MDP will
additionally contribute to the pipeline for FEI and provide TA support for such mini-grid businesses. The first phase of the
GMG MDP will reach completion in Q2/Q3 2017. The 2nd phase will then begin immediately after to ensure a seamless
evolution of activities. Phase 2 of the GMG MDP envisages transforming the MDP into the “go to” one-stop-shop for mini-
grids in Africa. This is also a key piece of the Bank’s ambitious 100% energy access target by 2025 under the New Deal on
Energy for Africa.
SEFA Alignment
and Role:
This project is aligned with SEFA’s mandate under component III to strengthen the enabling environment for private sector
investments in sustainable energy and will additionally complement SEFA’s activities across its three components - project
preparation, equity investments and enabling environment – as some of its activities are in the mini-grid space.
Cost Structure:
The breakdown of the Phase 2 grant is of US$ 3 million (Market Intelligence $500.000, Business Development Support
$800.000, Policy and Regulatory Support $600.000, Quality Assurance $350.000, Access to Finance $450.000 and
Programme management, communication, and outreach $300.000)
Description of
Recipient: The GMG MDP will be implemented by the SE4ALL Africa Hub team in the Energy Partnerships Department (PENP).
Bank’s Role:
The Bank hosts the SE4ALL Africa Hub in partnership with the African Union Commission, the NEPAD Agency and
UNDP and supports African countries in achieving the three objectives of SE4ALL. The GMG MDP contributes to the
implementation of the energy access objective and will thus strengthen the Bank’s leadership role on energy access. It will
also pave the way for an increased participation of the Bank in the financing of projects beyond the “grid connected” space,
building on the success and visibility of Phase 1.
Implementation
Arrangements:
Some activities are to be directly implemented by the Bank through “in-house” capacity on mini-grids. A substantial part
of the activities, however, are to be contracted out to the best available skills and expertise using inter alia targeted calls for
proposals. The MDP will be implemented in a coordinated manner with the SE4ALL partnership on Clean Energy Mini
Grids, including the World Bank (ESMAP), DFID, UNEP and several US Agencies (DOE, USAID, State Dept.).
Strategic
Alignment:
The GMG MDP Phase 2 aligns with the Bank’s Energy Sector Policy and contributes directly to the Bank’s New Deal on
Energy for Africa by contributing to energy security, increased energy access (in particular in rural areas), transition to
cleaner energy paths, promotion of innovation to increase financial flows, and promotion of knowledge transfer, research
and development. Moreover, the MDP Phase 2 will complement other Bank activities, notably the green credit lines under
preparation in several countries and the Debt Fund for Energy Inclusion (FEI), contributing to a pipeline of mini-grid
projects that can in turn be supported by FEI, and improving the investment conditions for FEI.
Development
Outcomes:
The GMG MDP addresses a series of bottlenecks for the scale-up of GMG investments in Africa, enabling investments in
clean energy mini-grid projects across the continent. Once in operation, these projects will provide increased access to
sustainable electricity for households and businesses, resulting in local economic development, better health services,
improved education, and gender empowerment.
1
1. Introduction
1.1. Regional Context and Sector Issues
It is estimated that 645 million people in Sub Saharan Africa, nearly 60%, don’t have electricity.1 The latest SE4All Global Tracking Framework also highlights that there is a significant urban – rural
divide, with access to electricity in urban areas in Sub-Saharan Africa amounting to 69% compared to
only 15% in rural areas. According to the IEA by 2040, 70% of new rural supply in SSA will be most
economically provided by off-grid and mini grids, two thirds of which powered by renewables as a
result of falling costs, technological advancements and more efficient appliances.2
Green Mini-Grids (GMG) are “small” and independent electricity networks providing renewable
power to households, businesses and institutions in rural communities. GMGs generate their power
(between a few kilowatts and up to 10MW) from renewable sources of energy, such as solar, wind,
biomass and hydropower, as well as hybrid combinations of any of the above, including diesel
generators for back-up and peak loads. Mini-grids development escapes the high cost inherent in
constructing the long transmission line infrastructure of main grids (on average around USD 15,000 per
kilometre), while providing more power than off-grid solar solutions. That additional capacity above
what off-grid solutions provide is needed to power energy-consuming productive use appliances, such
as mills, pumps and refrigerators, applications critical for economic development.
However, the development of GMGs comes with various challenges of a financial, technical and
regulatory nature undermining their “bankability”. Chief amongst these challenges is profitability
and therefore financial sustainability, as the business model entails the investment and management of
both generation and distribution assets, with power sales directly in rural African environments where
households and businesses have limited consumption levels and ability to pay. GMGs require
dependable business clients purchasing electricity in order to generate the necessary revenue to be
economically viable. In fact, local economic vitality and anchor clients are so important to GMG
developers that many seek actively to develop “productive use” clients in their market areas. Additional
challenges include technical development (e.g. developer capacity for designing robust systems and
structuring the project financing), policy and regulatory (e.g. cost-reflective tariffs, compensation
and/or integration within the main grid “when it arrives”, quality and safety standards), operations and
maintenance (e.g. lack of qualified labour, marketing and consumer service), and currency mismatch
(revenues in local currency are exposed to volatility and depreciation undermining equity returns and
debt servicing generally denominated in hard currency. All things considered, the rates of return thus
tend to be lower relative to more conventional on-grid generation projects, while facing more risks that
are harder to mitigate. As such, commercial financing of any mini-grid initiative, particularly through
local financial institutions, remains an impossibility as the projects are simply not deemed “bankable”.
1.2. Project Description and Rationale
In response to the critical need for rural energy and rural development generally, and specifically to the
challenges facing the green mini-grid sector, the SE4All Africa Hub at the African Development Bank
designed and launched the Green Mini-Grids Market Development Programme (GMG MDP) to
remove or reduce market barriers and strengthen the ecosystem for the scaling-up of GMG
investments in Sub-Saharan Africa. Seeded with USD 1 million grant funding from the Sustainable
Energy Fund for Africa (SEFA), the Programme’s key value propositions includes:
Promoting a pan-African network of expertise on GMGs;
Ensuring coherence with SE4All Action Agendas and Investment Prospectuses;
1 Half of those, or 325 million, come from only six countries; Nigeria, Democratic Republic of Congo, Ethiopia, Kenya,
Uganda and Tanzania. “African Development Bank Group Strategy for the New Deal on Energy for Africa 2016-2025”,
May 2016 2 “Africa Energy Outlook: A focus on energy prospects in sub-Saharan Africa”, International Energy Agency, 2014
2
Strengthening capacity of developers to develop / operationalize GMG business models;
Engaging financiers and supporting the development of suitable financial solutions;
Promoting a sound policy and regulatory environment;
Providing an interface with leading sector participants and groups.
Launched in mid-2015, the GMG MDP has successfully positioned itself over the last two years
at the center of the mini-grids movement in Africa. The Programme has become a key source of
information about GMG markets and policy developments on the continent and the GMG Developers’
Help Desk became the sector’s de facto technical assistance portal after only five months on-line. The
GMG Africa Strategy, developed under the GMG MDP, has been adopted as the AU’s position on how
best to structure at the country-level the policies and regulations fostering private investment into mini-
grid businesses. The AfDB’s Debt Fund for Energy Inclusion (FEI), also developed with SEFA support
and approved by the Board in December 2016, inter alia envisages financing of mini-grid projects,
while the GMG MDP will contribute to the pipeline for FEI and provide TA support for the mini-grid
businesses financed by FEI. Phase 2 of the GMG MDP envisages transforming the MDP into the “go
to” one-stop-shop for mini-grids in Africa. This is also a key piece of the Bank’s ambitious 100% energy
access target by 2025 under the New Deal on Energy for Africa.
1.3. Justification for SEFA Intervention
This GMG MDP is aligned with SEFA’s eligibility criteria and mandate to support activities that
create an enabling environment for private investments in sustainable energy in Africa. The SEFA-
financed activities target market barriers to investments and accelerate deployment of commercially
viable GMG projects in Africa.
The development of Clean Energy Mini-Grids is one of the focus areas under the SE4ALL
initiative for which the Bank is playing the lead role for Africa. The Clean Energy Mini-Grids
Partnership is galvanizing action on the five interlinked barriers facing the sector, with the engagement
of public, private and civil society expertise and resources. The Clean Energy Mini-Grids Partnership,
including the co-ordination group, secretariat and wider membership, is the established forum for
discussion and coordination of the efforts of development partners to advance the adoption of GMGs.
The AfDB is an active member of the Partnership and the GMG MDP was designed from the beginning
to be integrated and closely coordinated with the activities carried out in the framework of the
Partnership. Phase 2 of the Programme will include more direct support for the strengthening of the
CEMG Partnership, solidifying the GMG MDP’s position within the DFI community as the central
pillar of mini-grid developments in Africa.
The GMG MDP Phase 2 aligns with the AfDB’s Energy Sector Policy and contributes directly to
the Bank’s New Deal on Energy for Africa by contributing to energy security, increased energy access
(in particular in rural areas), transition to cleaner energy paths, promotion of innovation to increase
financial flows, and promotion of knowledge transfer, research and development. Moreover, the MDP
Phase 2 complements other Bank activities, notably the green credit lines under preparation in several
countries and the Facility for Energy Inclusion, contributing to a pipeline of mini-grid projects that can
in turn be supported by FEI.
2. SEFA Enabling Environment Grant
1.4. Objective
The GMG MDP (Phase 2) aims to expand the support to mini-grid sector actors (private, public,
finance sectors) for the scale-up of investments in commercially viable GMG projects. The
programme seeks to remove or reduce market barriers at regional scale and strengthen the ecosystem
for the emergence of a thriving GMG sector in Sub-Saharan Africa – contributing significantly to the
3
objectives of the New Deal. It follows the five business lines that respond to specific barriers for
different groups of stakeholders, as in the table below.
Table 1 - Business Lines, Barriers and Partners
BUSINESS LINE BARRIERS
ADDRESSED PARTNERS
Market Intelligence Information gaps and
asymmetries
Project Developers, Public Entities, Business/ Industry
Associations
Business Development
Support
Lack of Proven Business
Models, Unmade Linkages
Project Developers, Customers/Communities,
Business/ Industry Associations
Policy and Regulatory
Support Policy Environment Governments, RECs, AU
Quality Assurance
Lack of standard solutions
and need for consumer
protections
Regulators and Industry associations; RECs, Rural
Energy Agencies
Access to Finance Business Models, Access
to Finance
Financial Institutions, Project Developers, Business/
Industry Associations
Partners and beneficiaries:
The GMG MDP targets the following groups of partners and beneficiaries:
GMG project developers and equipment vendors, including community or private developers
and Public Private Partnerships (PPP);
Customers/communities, including anchor clients (e.g. telecoms), businesses (e.g. local
MSMEs), and community customers (i.e. households and public services);
Governments, regional institutions, public sector, public institutions, including public utilities,
rural electrification agencies, and local institutions involved in the preparation of laws,
regulations, codes and standards for quality assurance and legal frameworks;
Business/industry associations involved in supporting and representing their members through
advocacy, research, networking and events;
Financial institutions involved in the provision of risk, equity and debt capital for GMG
projects, as well as risk-mitigation instruments. This includes private investors, local
commercial banks, development finance institutions and governments.
Phase 2 of the GMG MDP builds on the positive experience and lessons learned from the first
phase3 as well as on an extensive consultation process with CEMG Partnership stakeholders, GMG
experts, members of the Energy Access Practitioner Network organized by the United Nations
Foundation (UNF), the Alliance for Rural Electrification (ARE) and many others. The comments
received helped to shape this MDP grant proposal, to prioritize the activities for this second
implementation phase, to avoid duplication and to ensure close coordination with other activities in this
area.
1.5. Project Executing Agency
The Programme is being Bank-executed through the Sustainable Energy for All (SE4ALL) Africa
Hub hosted in the Energy Partnerships Directorate (PENP) of the Power, Energy, Climate and
Green Growth (PEVP) complex of the Bank. The Hub has the mission to advance the SE4ALL initiative
in Africa, providing guidance and support to African countries and coordination of activities with
partners and the global initiative.
3 See Annex II for a review of Key Achievements and Lessons Learned from GMG MDP Phase 1.
4
The Hub has an oversight committee composed of AfDB, African Union, NEPAD, UNDP and one
representative of the Regional Economic Communities (currently SADC) and it works in close
collaboration with the SE4ALL Global Facilitation Team and its Chief Executive Officer (CEO), Ms.
Rachel Kyte. The Hub also supports the implementation of the SE4ALL Partnerships, including the
Partnership on Clean Energy Mini-Grids to which this proposal will directly contribute.
1.6. Grant Components/Activities
The Green Mini-Grids Market Development Programme has been conceived as a multi-phase
multi-component initiative for reasons of implementation flexibility and capacity. The Bank’s
experience in GMGs has been building-up through the implementation of the first phase, and the Bank
is now recognized as one of the institutions leading on advancing the GMG sector in Africa. The phased
approach allows for a much greater degree of flexibility to adapt to the changing landscape, assuring a
gradual implementation of the activities in parallel with increasing internal knowledge and experience,
in close coordination with the actions carried out by other SE4ALL partners, and with the developments
at the regional and national levels.
Phase 2 of the GMG MDP takes into consideration the programmes of other stakeholders
providing support to the nascent GMG sector in Africa, such as Power Africa, GIZ, the World
Bank/IFC, the EU and others. Planned Phase 2 activities include specific collaborations with Power
Africa, ESMAP and GIZ, as well as support for the increased sustainability and utility of the CEMG
Partnership. Phase 2 activities also respond to additional sector needs identified during the
implementation of Phase 1.
Several of the Phase 2 activities outlined below are country-specific and the impact of certain activities
make most sense if carried-out in conjunction with others. Naturally the Programme will prioritize high-
impact countries (i.e. countries with large numbers of non-electrified citizens) and countries with
emerging GMG sectors. Additionally, the Programme will target countries whose Governments have
demonstrated commitment to enabling private sector investment into the GMG sector, as evidenced by
a Government’s clear support for the GMG Africa Strategy.
The GMG MDP Phase 2 will be implemented through five (5) components, also know as “business
lines” (BL):
BL1: Market Intelligence:
Under phase one, the GMG MDP gathered mini-grid market intelligence on five countries – Burkina
Faso, Cameroon, Ethiopia, DRC and Mozambique (some of these research projects are to be completed
during Q1 2017). These countries were selected based upon experience with or potential for mini grids,
while ensuring some regional balance. Generally, this market intelligence consists of main-grid rollout
plans, population centers and densities, distribution of renewable energy resources, dominant economic
sectors and potential anchor clients, and details of mini grid policy frameworks. The information is
made available through the GMG Help Desk, in the form of maps, raw data, and analysis, as well as
packaged into country market intelligence reports.
For the second phase of the GMG MDP the following activities are proposed:
1. Expansion of this market intelligence gathering in new countries as well as regularly updating
the information from countries already analysed. The information contained in these reports,
notably Global Information System (GIS) reports, will be made available through the GMG
Help Desk. The second phase will prioritize high-impact countries (countries with large numbers
of non-electrified communities), with high mini-grid potential, and seek synergies with related
activities, such as SEFA GMG country programs where policy and regulatory frameworks are
being developed but there is a lack of market information. The analysis will also inform the
Bank’s activities at country level under the New Deal on Energy for Africa
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2. Beyond these country-specific market intelligence studies, however, there remain gaps in market
information such as resource mapping for small hydro and biomass potential. These gaps
were identified on several occasions while conducting the initial market assessments, with the
consultants recommending further in-depth studies to fill these gaps (an example is the absence
of site-specific information on small hydropower potential in Ethiopia). Such studies either do
not exist or are outdated and incorrect. On the other hand, some few countries have benefited
from hydro resource mapping, such as the “Small Hydro Resource Mapping in Tanzania” report
commissioned by ESMAP. In West Africa, ECREEE began in late 2016 a program to begin
mapping small hydropower resources in its member states, beginning with Guinea and Sierra
Leone. These studies are valuable to small hydro project developers and should be encouraged.
Similarly, there is a lack of specific information relative to biomass energy resources in most
countries. The Programme will not duplicate efforts to inventory RE resources conducted by
ESMAP, IRENA or other development partners but rather fill some of the remaining gaps.
3. The issue of lack of market information on the size of the African, regional or country GMG
markets, the number of mini-grids and their financing remains a major constraint for the sector’s
development. For example, in a country such as the DRC it is known that private sector mini
grids have emerged in the absence of a viable public utility, but the ownership models, size,
clientele and economics are widely unknown. The development and regular update of GMG
market data is therefore a key priority. The data will permit stakeholders to follow the evolution
of the GMG sector over time, monitoring specific KPIs. Through the GMG MDP, a database
on GMG sector indicators will be constructed and a methodology for its continuous updating
and maintenance will be adopted.
The Energy Sector Management Assistance Program (ESMAP) of the World Bank Group is
also currently building a methodology and database related to mini-grids. The GMG MDP will
collaborate closely with ESMAP on developing this GMG market data system, potentially with
the MDP developing the system for Africa and ESMAP applying the same or similar system in
Asia and Latin America. The two partners could then periodically jointly produce a report on
the “State of the Global GMG Sector”.
Key to the sustainability of this activity will be identifying an institution that will take
“ownership” and responsibility for the GMG database. For example, for the off-grid sector in
Africa, similar market data is collected and maintained by the Global Off-Grid Lighting
Association (GOGLA), however it remains to be determined whether GOGLA or a different
institution is the most appropriate owner of the GMG database. Another option is for this GMG
database to become the responsibility of the Clean Energy Mini-Grids (CEMG) Partnership and
available on their website. The GMG MDP is exploring opportunities to increase its support of
the CEMG Partnership, and this may prove to be an activity that fits well with the Partnership’s
role of promoting the GMG movement and providing evidence of the sector’s progressive
development. Further to this interest in increasing support to the CEMG Partnership is creating
stronger links between the Partnership’s website and the GMG Help Desk, which by their
natures should be inherently complimentary.
BL2: Business Development Services:
The second phase of the Business Development Services business line will see a continuation and
expansion of the support services to mini-grid developers. The following activities are proposed:
4. The Programme proposes to continue to maintain the GMG Developers Help Desk, develop
and upload new knowledge products, provide country-specific information and offer technical
assistance (both through the website as well as more personalized in-depth TA assignments).
The website and TA approach also need to be evaluated on a cyclical basis to make
improvements where necessary. Specifically, under Phase 2 the country-specific information on
the Help Desk, notably on issues related to licensing and permitting questions, will be expanded
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building on the Tanzania example.4 The Help Desk interface needs an alternative French
language option.
5. Information related to thriving economic sectors and potential anchor clients is also of critical
value to GMG project developers. Similarly to the methodology described above relative to
renewable energy resources, the GMG MDP will commission an analysis of the gaps in
information related to countries’ local economies and anchor clients. Based on this gap analysis,
the Programme will engage consultants to map countries’ productive use options and anchor
clients. Data for these mappings will be sourced from relevant private sector actors and their
industry associations (e.g. telecoms, tourism, agro-processing).
The GMG MDP will develop an approach to assist mini grid developers in stimulating the
productive use of electricity in their market areas. Obviously, GMGs’ profitability improves
as sales of electricity increase with static fixed costs and variable costs increasing only modestly.
This is especially true for hybrid solar-diesel mini-grids, which aim to increase daytime energy
consumption relative to night-time consumption, when storage and diesel fuel increase costs.
Building on the experiences of the Rockefeller Foundation in India and some of the early movers
in the GMG sector in Africa, the Programme will develop a best practices methodology on how
to seed local electricity demand. The methodology will likely include community economic
assessments (that may focus on irrigation, agro-processing and cold storage), local community
engagement and locally available business development services and microfinance. The
methodology will then be refined through an action-research element with existing GMGs,
whereby the Programme provides support in exchange for data sharing.
In parallel, GMG best practices relative to demand-side management will also be documented,
building on the Global Lighting and Energy Access Partnership (Global LEAP)’s research into
the global off-grid efficient appliance market. Similarly to a GMG’s aim to increase daytime
demand for electricity, the GMG also aims to decrease night-time and peak demand, when diesel
generators are frequently deployed to top-up solar power captured and stored during the day.
Diesel fuel is the most expensive variable cost for a hybrid solar-diesel GMG, so efforts to
control this cost also improves profitability. A best practices demand-side management (DSM)
methodology will be combined with the productive use methodology, with the results packaged
into knowledge products and tutorials available on the GMG Help Desk. The methodology will
also be applied through an action-research activity with existing GMGs, whereby the
Programme provides support in exchange for data sharing.
The Programme is discussing collaborating with Power Africa on the development of these
productive use/demand-side management best practices, with Power Africa focusing on GMGs
in Zambia while the GMG MDP focuses on GMGs in Nigeria. The Programme’s focus on
Nigeria will also bring it into closer collaboration with the GIZ and its mini-grids programme in
that country.
6. In response to the urgent need for Africa to address the human resource capacity gap in the
energy sector, the African Development Bank is supporting in collaboration with the
Association of Power Utilities of Africa (APUA) and the Agence Française de Développement
(AFD) four training institutions as ‘Training Centres of Excellence in Electricity’:
The Eskom Academy of Learning (South Africa)
The Kafue Gorge Regional Training Center (Zambia)
The Institute de Formation pour l’Electricité et le Gaz (Algeria)
The Centre des Sciences et Technologies en Electricité (Morocco)
These training centres are primarily owned and operated by their countries national utilities (for
example, Eskom in South Africa). The GMG MDP will assist these centres in offering training
4 Developed under support by the IFC, the Tanzanian GMG help desk can be consulted at http://www.minigrids.go.tz
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programs in mini-grid development and operation for the benefit of GMG developers and their
staffs throughout Africa. In addition to these four centres, there will likely be a need for at least
a fifth training centre - and maybe more - that focuses more specifically on private sector GMG
training and provides greater regional and linguistic balance (e.g. there is no Centre of
Excellence in West Africa and none providing training in Portuguese). The Programme will
conduct a human resources and training needs assessment amongst the emerging companies in
the GMG sector to pinpoint what are the specific skills lacking. Simultaneously, the Programme
will engage in discussions with the different Centres of Excellence and other vocational training
institutions to measure their willingness to offer capacity building to the green mini grid
employees. If the assessment uncovers specific needs that can be filled through training, and
for those Centres of Excellence and vocational training institutions interested in providing GMG
training, the Programme will subsequently develop the components of a GMG curriculum, in
collaboration with the GIZ, ESMAP and other development partners engaged in training in the
sector.
BL3: Policy and Regulatory Frameworks:
The following activities are proposed under the policy and regulatory business line:
7. The Programme will provide knowledge products and TA services to public sector institutions
(Ministries, regulators, rural electrification agencies, etc.) involved in the development of GMG
policy and regulatory frameworks. Already under the GMG MDP’s Phase 1, policies, strategies,
acts, laws, regulations and other public instruments relative to GMGs in Africa have been
catalogued. In addition, there exist a number of other documents that are valuable, such as the
“Mini-grid Policy Toolkit”5 and “Policies and Regulations for Private Sector Renewable Energy
Mini-grids”6. The Programme will create a GMG Policy Help Desk linked with the GMG
Developers Help Desk. Assistance to public sector actors will be provided both through the
helpdesk, as well as through more personalized in-depth TA assignments. An example of the
kind of TA that could be provided via the GMG Policy Help Desk could be helping a Ministry
to develop GMG auctions. The GMG MDP will cooperate with existing policy support
providers, such as the Clean Energy Solutions Centre Ask an Expert service to ensure
complementarity.
The GMG MDP Phase 2 will follow up and monitor implementation of the GMG Africa
Strategy through the GMG Policy Helpdesk, endorsed by the AU Energy Ministers in March
2017. The document builds consensus amongst energy ministries and regional bodies and
includes a minimum number of recommended policy positions, for example that GMG
developers have the latitude to fix cost-reflective tariffs (or receive cross-subsidy up to that
level), and that they merit fair compensation for their investment in the case of the arrival of the
main grid into their market area. Early implementers of the GMG Strategy will determine the
GMG MDP’s principal focus countries under Phase 2 for in-depth assistance through the Policy
Helpdesk.
8. The GMG Gap Analysis7 commissioned by the Programme under Phase 1 recommended that
mini grid developers look into alternative billing methods, specifically the possibility of
charging power consumers ‘airtime’ instead of for kilowatt-hours. Increasingly, more
stakeholders in the energy sector argue that mini grid tariffs must reflect the real cost of
generating and distributing power in order to be sustainable. The GMG MDP Phase 2 will study
the feasibility of alternative billing methods, for example the sale of airtime units instead of
kilowatt-hours, which would result in an inability to compare the prices of main grid power with
5 European Union Energy Initiative Partnership Dialogue Facility (EUEI PDF), 2014 6 International Renewable Energy Agency, 2016 7 Available for reference on the GMG Help Desk
8
mini grid electricity.8 PAYG business models frequently combine solar power provision with
access to highly efficient appliances, and the pricing schemes followed by many PAYG
companies are based upon what consumers currently pay on average for their energy products
and services (kerosene, batteries, phone charging, etc.). For GMGs, one option to consider might
be the bundling of wireless internet services (super wifi) with electricity so that the GMG is
genuinely offering a bundled utility service.
Also related to GMG policy development, but independent of the GMG MDP, are the SEFA GMG
country programmes. The country programmes work with governments to develop GMG enabling
environments (policies, strategies, regulations, etc.). Programmes are currently underway in
Mozambique, Rwanda, Niger and the Gambia, and in the pipeline for the DRC, Burkina Faso, Sao Tome
& Principe, Angola and Nigeria. The MDP will seek synergies with the country programmes to enhance
impact.
BL4: Quality Assurance:
Under the quality assurance business line the following activities are proposed:
9. The Isolated Community Power Quality Assurance Framework (QAF) is nearing completion
(by the Global LEAP initiative) and elements of the QAF are about to undergo a consultation
process and pilot testing in India and Tanzania (the latter under the IFC’s GMG project). The
GMG MDP Phase 2 will work with relevant national institutions in one African country (likely
to be Nigeria) to adapt and implement the QAF.9 The target country should be one that is
relatively advanced in terms of their mini-grid legal and regulatory framework.
The QAF’s monitoring and reporting includes both technical and commercial KPIs. The QAF
is designed to be implemented simultaneously from the “bottom up” – at the community level
with the mini-grid developer – and from the “top down” – with the regulator at the national
level. The Programme’s approach will be based upon building the capacities of the several
actors identified under the framework (regulators, Ministries, rural energy agencies, utilities,
mini-grid developers, investors, customers and CBOs) together, side by side, through a
combination of workshops and field application. The IFC’s approach in Tanzania has revolved
around the formation of two consultative groups, one for the public and one for the private sector
actors. A common set of standards and reporting is then the product of negotiations between the
two groups. Implementation of the QAF in any country involves an 8-step process:
I. Specify project goals (for example hours of power availability, number of connections
or revenue generated)
II. Develop reporting and measurement requirements
III. Develop performance, measurement, and reporting plans and procedures
IV. Develop a project or programme QA verification process
V. Develop project documentation
VI. Implement QA verification process
VII. Implementation of the electrification / mini-grid deployment project
i. Community needs assessments
ii. Design power system
iii. Determine rate structure
iv. Install power system
v. Implement power monitoring system
vi. Power system commissioning
8 Some years back the off-grid solar market was slow to develop until the Pay-As-You-Go business model was introduced.
PAYG is essentially an alternative method of purchasing solar energy, and perhaps a similar business model breakthrough
could catapult the GMG sector. 9 The Programme has been discussing with Power Africa the possibility of collaborating on introducing the QAF, with the
Programme targeting one West African country while Power Africa targets one East African country, and both share
information and experiences.
9
VIII. Collection and analysis of long-term system operational data
Global LEAP has drafted detailed implementation guidelines that will be used by the GMG
MDP and its consultants. The GMG MDP will engage a consulting firm to conduct the QAF
capacity building. A concerted effort should be made to select correctly the companies,
institutions and individuals to be trained. The MDP is exploring cooperation on the QAF
implementation with Power Africa.
BL5: Access to Finance:
In the 1st phase of the MDP, IED was hired to assist in reflecting upon and developing appropriate
GMG financing tools that the Bank could potentially offer to project developers.
The following assumptions in relation to Phase 2 were made:
Debt and results-based financing (to subsidize rural community connection fees) are the missing
links in GMG finance. Corporate equity appears to be moving into the sector, while grants for
project preparation and a share of CAPEX are also available from various sources;
Commercial banks will be reluctant to lend to this sector in the short or medium term, until
business models have proven track records;
There are currently between ten and twenty GMG developers looking to acquire debt of around
$10 million each for working capital if the terms are advantageous (in terms of loan tenor and
interest rates);
Flexibility as to the currency of loan disbursement and reimbursement would contribute to
mitigating currency risk.
Also recently in December 2016 – independent of the GMG MDP but supported by a SEFA grant – the
Bank approved the establishment of the Facility for Energy Inclusion (FEI) targeting off-grid projects,
mini-grids and small grid-connected IPPs with project costs as low as $10 million. The Bank has
committed $100 million to the $500 million Fund. The GMG MDP will have a natural symbiotic
relationship with the FEI, generating pipeline for the Fund while providing technical assistance to GMG
investments. The FEI is currently in its procurement and set-up phase and is likely to be operational by
the end of 2017.
With these Phase 1 findings in mind, and with the establishment of the FEI, we propose the following
activities for the 2nd phase of the MDP.
10. The GMG MDP proposes to work towards capitalizing a results-based financing (RBF) grant
fund with support and in collaboration with donors and foundations (possibly including
Rockefeller Foundation, DFID, USAID, etc.). The RBF would be provided based upon new
power connections and at an amount relative to the QAF tier quality of electricity service
provided by the mini-grid (e.g. Tier 1 grids would receive smaller grants than Tier 3 grids).
Grants would likely range between $200 and $500 per connection, depending on the tier. The
purpose of these RBF grants is to subsidize power connections for rural households, so that the
modest incomes of these households do not represent a barrier to GMG growth. Based upon
lessons learned elsewhere (such as in Tanzania and Kenya) the GMG MDP will design this RBF
facility, draft an action plan and conduct outreach to potential contributors. The GIZ has a good
deal of experience implementing RBF funds and the GMG MDP will look toward this
experience and collaboration.
11. Integrating commercial banks into the GMG sector is a key objective of the Access to Finance
business line. Commercial bank involvement enhances the sustainability of the GMG finance
sector and would serve the smaller and local GMG developers. In addition to proven GMG
business models with payment track record, commercial banks would likely need three types of
assistance before they would actively engage in GMG finance. Firstly, they would need an
understanding of the sector acquired through capacity building and training. This could be
10
provided by a consulting firm, with the training introduced gradually on a country-by-country
basis, beginning with the countries most advanced in enabling the mini grid sector and focusing
initially notably on those countries with existing or upcoming credit lines that can benefit the
mini-grid sector (i.e. the AfDB is preparing credit-lines for small-scale renewables and energy
efficiency in several African countries). A capacity needs assessment and development of a
training program would be a pre-requisite to any specific capacity building activities involving
the commercial finance sector, and this needs assessment and training program development
will be an activity under GMG MDP Phase 2. Secondly and thirdly, the other two forms of
assistance that commercial banks are likely to require to engage with the GMG sector are firstly,
money to lend (a line of credit, for example), and secondly, partial credit guarantees.
12. Most companies manufacturing the equipment required of a GMG – solar panels, turbines,
gasifiers, meters, etc. – are located outside of Africa, primarily in Europe, the US, China and
Japan. These companies are in competition to get their products on the market, and the off-grid
rural electrification market in Africa represents a potential frontier for these companies, worth
seeding for future growth. Many of these companies would be willing to provide supplier credit
of their equipment to trustworthy GMG developers. In parallel, many of these companies’
national governments support their export through export credit programs. The GMG MDP
proposes to study the potential scope for financing GMG debt through supplier and export
credit arrangements. This potential source of debt was not examined under the GMG finance
supply and demand study conducted by IED.
If this study concludes that there is ample potential to foster regular supplier and/or export
credits for GMG developers, this could subsequently lead to the development of a “matchmaker”
activity under the GMG MDP.
Additionally, to further develop Africa’s economies in general, and clean energy sectors
specifically, it is desirable that renewable energy technologies begin to be manufactured and
assembled on the continent. In fact, solar panels are being assembled currently in Senegal and
Mozambique, solar batteries are made in Kenya, and solar lantern manufacturing has recently
been launched in Burkina Faso and Mali. Manufacturing in Africa is also to the benefit of the
foreign company making the investment, providing them with competitive cost advantage by
reducing associated shipping expenses and gifting tax privileges. To this end, while working to
facilitate supplier and export credit arrangements, the GMG MDP will look to identify
opportunities to foster foreign investment into clean energy technology manufacturing.
Programme Management, Communication and Outreach
The daily operation of the MDP is managed by a long-term consultant in a Programme Officer
role. The Programme Officer works under the direct supervision of the SE4ALL Africa Hub
coordinator, who is the task manager for this project.
The project has developed a communication and outreach plan that is being implemented by the
project team. The dissemination of the results of the initiative is being achieved through a GMG
document series and through communication instruments put in place in-house by the SE4ALL Africa
Hub team and will closely link to overall communication efforts under the New Deal on Energy,
including the development of a web infrastructure and social networking, the hiring of a dedicated
communication consultant and the utilization of external communication channels set up by the CEMG
Partnership Secretariat and by the SE4ALL Global Facilitation team.
The project is being implemented in close coordination with the CEMG Partnership and with
ESMAP/World Bank, who is responsible for the implementation of the DFID-financed Action Learning
and Evaluation component. The project also benefits from coordination with the results of the DFID-
financed Mini-Grid country activities in Kenya and Tanzania, and has begun collaborating with a further
DFID-funded GMG initiative in the Democratic Republic of Congo (the ESSOR Programme). DFID
is also supporting GMG development in Mozambique and Sierra Leone.
11
1.7. Budget/Cost Structure
The cost of the first implementation phase was US$ 1 million, of which US$ 959,190.92 (96%) has
been contracted to date. The contracted amount is expected to be completely disbursed by the end of
Q3 2017.
The cost of the second implementation phase is calculated to be US$ 3 million, representing the increase
in scope and scale from the first phase’s US$ 1 million budget. DFID has earmarked part of its
contribution to the SEFA for financing of Phase 2 of the GMG MDP. DFID has communicated that the
level of support requested in this grant request is in line with its expectations.
The budget breakdown is presented in Annex IV.
Table 2 - Budget / Cost Structure # Activities Total In US$k
BUSINESS LINE 1 – MARKET INTELLIGENCE
1 Conduct national market assessments 200
2 Conduct small hydro and biomass resource mappings 100
3 Continuously monitor sector market data 200
BUSINESS LINE 2 – BUSINESS DEVELOPMENT SUPPORT
4 Maintain and expand GMG Developers Help Desk and technical assistance provided 500
5 Conduct mappings of productive use and action-research activities relative to productive use and
demand-side management
200
6 Support “Training Centers of Excellence in Mini-Grids” 100
BUSINESS LINE 3 – POLICY AND REGULATORY SUPPORT
7 Provide advisory/helpdesk services to policy makers 500
8 Conduct feasibility study on alternative billing methods (to mitigate tariff debate) 100
BUSINESS LINE 4 – QUALITY ASSURANCE
9 Introduce Quality Assurance Framework in selected countries 350
BUSINESS LINE 5 – ACCESS TO FINANCE
10 Design of RBF facility in support of GMG rural consumer connections 100
11 Conduct commercial financiers’ capacity needs assessment and subsequent training program linked
to envisaged green credit lines 200
12 Conduct study of supplier and export credit arrangements and promote local manufacturing 150
PROGRAMME MANAGEMENT, COMMUNICATION, AND OUTREACH
13 Programme management 300
TOTAL 3,000
Further, it is worth noting that the multiplicity of activities proposed under the Programme’s Phase 2
will not result in a concurrent multiplicity of implementing partners. The Programme will group
together related activities under four sub-contracts in order to facilitate coordination and ensure greater
consistency and quality of products and services.
1.8. Outputs and Deliverables of Grant Activities
The outputs and deliverables for the second phase of the GMG MDP are highlighted in Table 3 below.
12
Table 3 - Activities and Outputs
1.9. Implementation Schedule
The GMG MDP Phase 2 activities will be implemented over 24 months as per the following schedule.
Table 4 - Implementation Schedule for Phase 2 Activities
# Activities Q3
2017
Q4
2017
Q1
2018
Q2
2018
Q3
2018
Q4
2018
Q1
2019
Q2
2019
BUSINESS LINE 1 – MARKET INTELLIGENCE
1 Conduct national market
assessments XX XX XX XX XX XX XX XX
2 Conduct small hydro and
biomass resource mappings XX XX XX XX XX XX
3 Continuously monitor sector
market data XX XX XX XX XX XX XX
BUSINESS LINE 2 – BUSINESS DEVELOPMENT SERVICES
4
Maintain and expand GMG
Developers Help Desk and
technical assistance provided
XX XX XX XX XX XX XX XX
5
Conduct mappings of
productive use and action-
research activities relative to
productive use and demand-
side management
XX XX XX XX XX XX
# Activities Outputs and Deliverables
BUSINESS LINE 1 – MARKET INTELLIGENCE
1 Conduct national market assessments Market opportunity country data and analysis for ten
countries published online
2 Conduct small hydro and biomass resource mappings Mappings published online
3 Continuously monitor sector market data Market data current and available online
BUSINESS LINE 2 – BUSINESS DEVELOPMENT SUPPORT
4
Maintain and expand GMG Developers Help Desk
and technical assistance provided Developers’ Help Desk operational
Help Desk regularly evaluated and improved
Help Desk supports at least 30 developers
5
Conduct mappings of productive use and action-
research activities relative to productive use and
demand-side management
Mappings published online
Case studies on action-research activities and best
practices published online
6 Support “Training Centers of Excellence in Mini-
Grids” Training needs assessment delivered
GMG training curriculum delivered
BUSINESS LINE 3 – POLICY AND REGULATORY SUPPORT
7
Provide advisory/helpdesk services to policy makers Policy makers’ Help Desk operational
Help Desk regularly evaluated and improved
Help Desk supports at least 10 countries
8 Conduct feasibility study on alternative billing
methods (to mitigate tariff debate) Feasibility study delivered and published online
COMPONENT 4 – QUALITY ASSURANCE
9
Introduce Quality Assurance Framework in selected
countries Reports detailing the implementation of Quality
Assurance Framework in two countries available
online
COMPONENT 5 – ACCESS TO FINANCE
10 Design of RBF facility in support of GMG rural
consumer connections RBF facility design delivered
11
Conduct commercial financiers’ capacity needs
assessment and subsequent training program linked
to envisaged green credit lines
Financiers’ capacity needs assessment delivered
Financiers’ training program delivered
12 Conduct study of supplier and export credit
arrangements Study of supplier and export credit arrangements
delivered
13
# Activities Q3
2017
Q4
2017
Q1
2018
Q2
2018
Q3
2018
Q4
2018
Q1
2019
Q2
2019
6
Support “Training Centers
of Excellence in Mini-
Grids”
XX XX XX XX XX XX XX
BUSINESS LINE 3 – POLICY AND REGULATORY SUPPORT
7 Provide advisory/helpdesk
services to policy makers XX XX XX XX XX XX
8
Conduct feasibility study on
alternative billing methods
(to mitigate tariff debate)
XX XX XX
BUSINESS LINE 4 – QUALITY ASSURANCE
9
Introduce Quality Assurance
Framework in selected
countries
XX XX XX XX XX XX
BUSINESS LINE 5 – ACCESS TO FINANCE
10
Design of RBF facility in
support of GMG rural
consumer connections
XX XX XX XX
11
Conduct commercial
financiers’ capacity needs
assessment and subsequent
training program linked to
envisaged green credit lines
XX XX XX XX
12
Conduct study of supplier
and export credit
arrangements
XX XX XX XX
1.10. Implementation, Procurement and Disbursement Modalities
Programme implementation will be carried out in accordance with the fiduciary and procurement rules
for services applicable to the Bank’s Administrative Budget.
As per the previous phase, the implementation of Phase 2 of the GMG MDP will be Bank-executed
relying on a combination of Bank staff, individual consultants and consulting firms (see Annex V for
the detailed procurement plan and table 5 for an overview of human resources). Project coordination
will be assured by the SE4ALL Africa Hub team housed at PENP, with a long-term consultant to act as
Programme Officer to handle the day-to-day operations of the GMG MDP.
2.7.1. Procurement Arrangements
The procurement of consulting services will be carried out in accordance with the Bank’s Presidential
Directive 02/2012 concerning the procedures for the acquisition of consulting services funded by the
administrative or capital expenditure budget of the Bank Group dated 21 February 2012 as well as the
Delegation of Authority Matrix issued by Presidential Directive No. 06/2012, as these can be amended
from time to time.
The procurement arrangements are as follows:
2.7.1.1. Recruitment of Firms
Four firms will be recruited to implement the twelve activities described above. In three of the cases
QCBS will be used as the selection method, as it is the default method used for the recruitment of firms.
In one case direct negotiation will be applied in order to retain a current service provider, for the
exceptional reasons described below.
a) A firm will be recruited to conduct national mini-grid market opportunity assessments, conduct
mappings of mini hydro and biomass resources, and monitor GMG market data across the
14
continent for an estimated amount of USD 500,000 through shortlisting using the QCBS
selection method.
b) A firm will be recruited to operate the GMG Developers’ Help Desk, provide technical
assistance to GMG developers, conduct mappings of and action-research activities relative to
productive use and demand-side management, support “Training Centers of Excellence” in
developing mini-grids training, develop a GMG Policymakers’ Help Desk, provide technical
assistance to public sector actors, and conduct a feasibility study on alternative billing methods,
for an estimated amount of USD 1.4 million. The selection method for this procurement is
proposed to be a direct negotiation, for the reasons outlined in section 2.7.1.3. below.
c) A firm will be recruited to introduce the GMG Quality Assurance Framework in selected
countries for an estimated amount of USD 350,000, through shortlisting using the QCBS
selection method.
d) A firm will be recruited to design an RBF facility in support of GMG consumer connections,
conduct commercial financiers’ capacity needs assessment and develop subsequent training
program, and study potential supplier and export credit arrangements targeting GMGs while
identifying local manufacturing opportunities, for an estimated amount of USD 450,000 through
shortlisting using the QCBS selection method.
2.7.1.2. Recruitment of Individual Consultants
One individual consultant will be recruited to serve as Programme Officer for the GMG MDP for an
estimated amount of USD 216,000 over 24 months subject to the approval of the Purchasing Committee
in accordance with the DAM. Additional short-term individual consultants will be recruited to provide
services related to communications, specifically for 40 days of English editing and 40 days of graphic
design work, for an estimated amount of USD 25,000 each.
2.7.1.3. Justification for Direct Negotiation
PD 02/2012 allows for direct negotiations single source procurement exceptions under certain
circumstances, such as the following from section 9.1.e: “Assignments which are a continuation of
activities undertaken by the Consultant, where the initial Contract was awarded following competition
on the basis of a shortlist and where the Consultant’s performance has been assessed satisfactory”.
A firm will be recruited for the activities listed in section 2.7.1.1.b above.
The selection method for this procurement is proposed to be a direct negotiation, as the Programme
wishes to retain the current service provider. Under Phase I, a consortium make up of two firms, Energy
4 Impact and Inensus, was contracted subsequent to an open competition to design, develop and operate
the GMG Developers’ Help Desk, and to provide technical assistance to GMG developers, for an
amount of USD 412,500 (UA 298,629 as of March 2016), using the QCBS selection method for one
year . The development of the Help Desk was a long and arduous – but ultimately very successful –
process. The Programme has also been satisfied with the technical assistance provided by the
consortium to GMG developers. To now, under Phase 2 of the Programme, hire a different firm for the
continuation of this work would present important complications and likely significant additional costs
and delays. The Help Desk would have to be migrated from the current service provider to the new
service provider, or re-developed again from scratch. This would cost time and money. Furthermore, it
would take a new service provider a certain amount of time to become operational with a high likelihood
that the Help Desk would not be operational for a certain period of time, which would seriously
undermine the credibility of the Help Desk and by extension the Bank. Therefore, the Programme
wishes to retain the services of the current consortium in accordance with section 9.1.e of PD 02/2012
and directly negotiate an extension of the current contract for an additional 24 months, subject to
15
approval by the Purchasing Committee in accordance with the DAM. The Consortium will provide the
Bank with both technical and financial proposals which shall be the basis for negotiating with the Bank.
2.7.1.4. Advertisement
For consultancy services contracts valued at more than UA 200.000 (for firms) and individual
consultants valued at more than UA 50.000, advertisement for the procurement must be placed in the
UN Development Business Online and the Bank’s external website. The Bank can also choose to
publish in other specialized journals due to the specific nature of the required services. When the amount
of the contract is less than UA 200.000 for firms and less than UA 50.000 for individual consultants,
the Bank may limit the publication of the request for expressions of interest (REOI) to its external
website. However, any eligible consultant, being regional or not, may express his desire to be short-
listed.
2.7.2. Procurement review: Approvals will be done in accordance with the Delegation of Authority
Matrix (DAM).
2.7.3. Procurement capacity: The Hub currently has an Operations and Contracts Officer already in
place that takes care of all the aspects regarding procurement and contract management for the Hub and
who will deal with the procurement aspects of the GMG MDP.
2.7.4. Audit: The Programme will be audited as part of SEFA annual audit by the External Auditors of
the Bank in conformity with the Trust Fund agreement. The Financial Control Department of the Bank
(FFCO) procures the Annual Audit and carries out checks on quarterly un-audited financial statements.
The Programme will also be subject to independent procurement reviews (IPRs).
2.7.5. Evaluation: The Programme will subject to external evaluation by a method as yet under
discussion with SEFA and the UK’s Department of International Development.
Table 5 - Human Resources Foreseen for Each Activity
# Activities Human Resources
1 Conduct national market assessments, small hydro and
biomass resource mapping, mapping of productive use Consulting Firm Services (1)
2 Conduct small hydro and biomass resource mappings Consulting Firm Services (1)
3 Continuous monitoring of sector market data Consulting Firm Services (1)
4 Maintain and expand GMG Developers Help Desk and
technical assistance provided Consulting Firm Services (2)
5 Conduct mappings of and action-research activities relative
to productive use and demand-side management Consulting Firm Services (2)
6 Support “Training Centers of Excellence in Mini-Grids” Consulting Firm Services (2)
7 Provide advisory/helpdesk services to policy makers
Consulting Firm Services (2)
8 Conduct feasibility study on alternative billing methods (to
mitigate tariff debate) Consulting Firm Services (2)
9 Introduce Quality Assurance Framework in selected
countries Consulting Firm Services (3)
10 Design of RBF facility in support of GMG rural consumer
connections Consulting Firm Services (4)
11
Conduct commercial financiers’ capacity needs assessment
and develop subsequent training program linked to envisaged
green credit lines
Consulting Firm Services (4)
12 Study of supplier and export credit arrangements Consulting Firm Services (4)
13 Programme Management, Communication and Outreach PENP Staff and Individual Consultants
16
2.7.6 Disbursement Modalities: Disbursements from SEFA will follow the rules and procedures of
the Bank, as laid out in the Bank’s disbursement handbook10. The method of “direct payments” will be
used.
The disbursement schedule will follow the Calendar of Implementation of the Activities. For the
activities carried on by Consulting Firms, the payments will be divided in tranches paid upon reaching
of contracted milestones. For Individual Consultants, the payment will be a monthly sum and expenses
for missions, associated costs and per-diems will be paid.
Table 6 - Disbursement Schedule (thousands of dollars, rounding applies)
# Activities Q3
2017
Q4
2017
Q1
2018
Q2
2018
Q3
2018
Q4
2018
Q1
2019
Q2
2019 Total
BUSINESS LINE 1 – MARKET INTELLIGENCE
1 Conduct national market assessments 20 60 60 60 200
2 Conduct small hydro and biomass
resource mappings 10 30 30 30 100
3 Continuously monitor sector market
data 20 60 60 60 200
BUSINESS LINE 2 – BUSINESS DEVELOPMENT SERVICES
4
Maintain and expand GMG
Developers Help Desk and technical
assistance provided
50 100 100 100 150 500
5
Conduct mappings of and action-
research activities relative to
productive use and demand-side
management
20 100 80 200
6 Support “Training Centers of
Excellence in Mini-Grids” 10 50 40 100
BUSINESS LINE 3 – POLICY AND REGULATORY SUPPORT
7 Provide advisory/helpdesk services to
policy makers 50 100 100 100 150 500
8
Conduct feasibility study on
alternative billing methods (to
mitigate tariff debate)
10 50 40 100
BUSINESS LINE 4 – QUALITY ASSURANCE
9 Introduce Quality Assurance
Framework in selected countries 35 65 100 150 350
BUSINESS LINE 5 – ACCESS TO FINANCE
10 Design of RBF facility in support of
GMG rural consumer connections 10 40 50 100
11
Conduct commercial financiers’
capacity needs assessment and
subsequent training program linked
to envisaged green credit lines
20 80 100 200
12 Conduct study of supplier and export
credit arrangements 15 60 75 150
PROGRAMME MANAGEMENT
Programme Management,
Communication and Outreach 37 38 37 38 37 38 37 38 300
10 See http://www.afdb.org/en/documents/policy-documents/guidelines-and-procedures/
17
3. Conclusion & Recommendations
The development of a strong GMG market is a necessary step towards achieving universal energy access
in Africa. GMGs are the least cost option for energy access in rural areas that are distant from the grid
but with some settlement density and commercial activities. GMGs respond to a specific market need
that is properly addressed neither by grid connection nor by solar home systems (SHS) and can be
designed in a way that is compatible with future grid extension and still maintain their functional value
as distribution networks with attached decentralised generation and/or backup.
The Green Mini-Grid market is developing rapidly in Africa, attracting big and small investors,
including international corporations and DFIs. Still, a series of barriers relating inter alia to market
fragmentation, inadequate policy and regulatory environment and insufficient access to finance have
limited the widespread adoption of GMGs necessary for achieving the targets set under the New Deal
for Energy in Africa and the SDGs. The GMG MDP is addressing these barriers along five business
lines, which include specific actions to improve market intelligence, support business developers,
address policy and regulatory issues, improve quality control and standardization, and improve access
to finance for GMG projects. During its 1st Phase, the GMG MDP has quickly established itself as a
focal point and strengthened the role of AfDB as one of the lead partners developing the GMG sector
in Africa. The 2nd Phase of the GMG MDP will further support the GMG sector in Africa toward
becoming a thriving industry.
The SE4ALL Africa Hub has shown itself to be uniquely positioned to implement the MDP drawing on
its increasingly knowledgeable and experienced team and the convening power of its members. The
Hub is also best placed to ensure continuous coordination with relevant stakeholders in this space,
notably in the context of the Clean Energy Mini-Grids Partnership, as well as to promote the GMG
theme in SE4ALL Action Agendas and Investment Prospectuses.
The 1st Phase of the GMG MDP developed and applied a market assessment methodology that allows
for subjectively comparing GMG opportunities country by country. The Programme developed the
GMG Developers’ Help Desk and began providing technical assistance to 24 developers in fourteen
countries. The GMG Africa Strategy was adopted by the African Union’s energy ministers, providing
direction on how to address the critical policy and regulatory issues facing the sector. The Programme
provided a better understanding of GMG financing needs, which contributed to the AfDB’s
establishment of the Fund for Energy Inclusion.
This 2nd SEFA grant will transform the GMG MDP into the “go to” one-stop-shop for mini-grids in
Africa and accelerate the growth of the GMG market on the continent. This is also a key piece of the
Bank’s ambitious 100% energy access target by 2025 under the New Deal on Energy for Africa. It is
therefore recommended that the Board of Directors approves this grant request in line with the SEFA
Multi-Donor Arrangement.
I
ANNEX I - LOGICAL FRAMEWORK FOR SEFA GRANT
RESULTS CHAIN PERFORMANCE AND PROCESS INDICATORS
MEANS OF VERIFICATION
Indicator Baseline Target
IMPA
CT
Widespread, sustainable implementation of GMG projects in sub-Saharan Africa makes
an important contribution to SE4ALL’s goal
of universal energy access by 2030
Energy access rate in SSA
Access
figures
from
IEA’s World
Energy Outlook
2015
100% by 2030
Global Tracking Framework
IEA’s World Energy Outlook is
published biannually
OU
TC
OM
ES
Investments are scaled up in commercially viable GMG projects
The ecosystem for the emergence of a thriving GMG sector in Sub-Saharan Africa
is strengthened
Supported developers have operational
projects and connect new households
Private sector GMG investment
New GMG installed capacity since 2015
New GMG HH connections since 2015
Operational projects by supported GMG developers
New connections by supported GMG developers
0
0
0
0
0
$50m of private finance (equity and debt) leveraged by 2020
10MW of new installed capacity by 2020
75,000 household connections
20 GMG developers with operating mini-grids by the end of Phase 2, 50 by 2020
15,000 by 2020
Global Tracking Framework, National documents, Project Reports, SE4ALL
Reports, RISE
OU
TPU
TS
1. Conduct national market assessments Market opportunity country data and
analysis published online
Not
applicable
Online publications will appear on the
Programme’s (SE4All Africa Hub) website on a
bi-monthly basis, ten (10) in total over Phase 2
Project Reports, GMG Help Desk and
SE4All Hub websites (as appropriate)
2. Conduct small hydro and biomass resource
mappings Mappings published online Not
applicable
Online publications will appear on the
Programme’s (SE4All Africa Hub) website on a bi-monthly basis. The number of studies
conducted will depend upon need, cost and
resource availability
Project Reports, GMG Help Desk and
SE4All Hub websites (as appropriate)
3. Continuously monitor sector market data Market data current and available online Not
applicable
Online publications will appear on the
Programme’s (SE4All Africa Hub) website on a
bi-monthly basis. KPIs monitored will include GMG developers, GMG developments, public
and private investment, MW installed,
connections made, etc.
Project Reports, GMG Help Desk and
SE4All Hub websites (as appropriate)
4. Maintain and expand GMG Developers Help Desk and technical assistance provided
Developers’ Help Desk operational
Help Desk regularly evaluated and
improved
Help Desk supports at least 30 developers
Help Desk currently
supporting
16 developers
(12/16). All
others not
applicable
Subcontractor to submit quarterly reports on Help Desk development and TA. Number of
developers assisted to rise to thirty (30) by the
end of Phase 2 and fifty (50) by 2020.
Project Reports
II
RESULTS CHAIN PERFORMANCE AND PROCESS INDICATORS
MEANS OF VERIFICATION
Indicator Baseline Target
5. Conduct mappings of and action-research activities relative to productive use and
demand-side management
Mappings published online
Case studies on action-research activities
and best practices published online
Not applicable
Subcontractor to submit quarterly reports beginning Q1 2018. Online publications will
appear on the GMG MDP website as completed,
beginning Q1 2018. The number of mappings conducted will depend upon need, cost and
resource availability.
Project Reports, GMG Help Desk and SE4All Hub websites (as appropriate)
6. Support “Training Centers of Excellence in Mini-Grids”
Training needs assessment delivered
GMG training curriculum delivered
Not applicable
Training needs assessment and training curriculum will appear online by end Q1 2018
and end Q4 2018 respectively. At least six (6)
training centres will be targeted in Phase 2.
Project Reports, GMG Help Desk and SE4All Hub websites (as appropriate)
7. Provide advisory/helpdesk services to
policy makers Policy makers’ Help Desk operational
Help Desk regularly evaluated and
improved
Help Desk supports at least 10 countries
N/A
N/A 0
Subcontractor to submit quarterly reports on
Help Desk development and TA. At least ten (10) countries’ public sectors supported during
Phase 2.
Project Reports
8. Conduct feasibility study on alternative
billing methods (to mitigate tariff debate) Feasibility study delivered Not
applicable
Study will appear online by end Q2 2018 Project Reports, GMG Help Desk and
SE4All Hub websites (as appropriate)
9. Introduce Quality Assurance Framework in
selected countries Reports detailing the implementation of
Quality Assurance Framework available
online
Not
applicable
Subcontractor to submit quarterly reports
beginning Q4 2017. QAF introduced in two
countries
Project Reports, GMG Help Desk and
SE4All Hub websites (as appropriate)
10. Design of RBF facility in support of GMG rural consumer connections
RBF facility design delivered Not applicable
Subcontract to submit system design document by end Q1 2018
Project Reports
11. Conduct commercial financiers’ capacity
needs assessment and develop subsequent training program linked to envisaged green
credit lines
Financiers’ capacity needs assessment delivered
Financiers’ training program delivered
Not
applicable
Training needs assessment and training
curriculum will appear online by end Q2 2018 and end Q4 2018 respectively
Project Reports
12. Conduct study of supplier and export credit arrangements
Study of supplier and export credit arrangements delivered
Not applicable
Study will appear online by end Q1 2018 Project Reports, GMG Help Desk and SE4All Hub websites (as appropriate)
BU
SIN
ES
S
LIN
ES
Business Line 1 – Market Intelligence
Business Line 2 – Business Development Services Business Line 3 – Policy and Regulatory Support
Business Line 4 – Quality Assurance
Business Line 5 – Access to Finance
INPUTS
US$ 3 million SEFA component III
III
ANNEX II – KEY ACHIEVEMENTS AND LESSONS LEARNED
During GMG MDP’s 1st Phase an important number of activities were successfully implemented that
now provide the foundation for the Programme’s 2nd Phase.
Under the Market Intelligence business line, the Programme signed a contract with a consortium
made up of Carbon Trust, UNEP and ECREEE. The consultants have analysed existing GMG
market research methodologies and have designed an approach that combines elements of
different (primarily GIS) methodologies, and that results in country-specific GMG market
information and maps. The newly developed methodology has to-date been applied in
Mozambique, Ethiopia, Burkina Faso and Cameroon. Research will be conducted in the
Democratic Republic of Congo before the end of the GMG MDP’s first phase, for a total of five
countries.
Energy 4 Impact (formerly GVEP) and INENSUS were contracted to implement the Business
Development Services business line, and to-date a thorough analysis of the knowledge and
service gaps facing GMG developers was produced and published as Document #1 under the
GMG MDP’s green mini-grid document series. A GMG web-based helpdesk for developers was
launched on 1 October 2016 (http://greenminigrid.se4all-africa.org) at the International Off-
Grid Renewable Energy Conference (IOREC). The GMG helpdesk is populated with knowledge
products and tutorials, and provides technical assistance to GMG project developers. Simple
assistance is provided through the helpdesk, while more intensive assistance is being provided
on a case-by-case basis. By the end of February 2017, the Programme was engaged with 24
GMG developers in fourteen countries (Benin, Botswana, Cameroon, Ghana, Kenya,
Madagascar, Malawi, Nigeria, Rwanda, Sao Tome & Principe, Senegal, Somalia, Togo, Uganda
and Zimbabwe). To date, most of the TA provided so far has been related to demand assessment,
technical system design, business plan development and financial modeling. The Programme is
supporting a broad range of developers, covering all major technologies (solar, solar-battery,
solar hybrid, biomass gasification, wind and small hydro), and projects at different stages in
their life cycle from very early stage to mid and late stage. Between 12 October 2016 and 1
February 2017, there were 1,295 visitors to the GMG Developers Help Desk and they visited
the site 2,547 times.11
Under the Policy Support business line a process of cataloguing existing GMG policy and
regulatory instruments was conducted and a GMG Africa Strategy was drafted and vetted by
sector stakeholders. The GMG Africa Strategy was approved by the African Union’s Energy
Ministers meeting in March 2017, and consists of basic policy principles required by each
country in order to lay the foundation for the development of a sustainable GMG sector.
No activities were planned for the Quality Assurance business line during the first phase of the
Programme. The Programme was waiting for the Global Lighting and Energy Access
Partnership (Global LEAP) to complete the development of a mini-grids quality assurance
framework (QAF), which categorizes mini-grids into tiers relative to the quality of services
provided. The development of the QAF is now complete. The categorizing of GMGs allows
developers to uniformly report on their mini-grids performance, improving understanding by
sector stakeholders, especially donors and financiers.
Under the Access to Finance business line, the Programme hired Innovation Energie et
Développement (IED) to study the supply and demand of green mini-grid financing and conduct
five case studies of mini grids with illustrative financing experiences. IED also made
recommendations to the AfDB on possible appropriate GMG financing approaches and
instruments, primarily focused in the immediate term on the Bank providing debt directly to
GMG project developers and in the longer term providing GMG financing through a line of
credit (and technical assistance) offered to local commercial banks. The information on available
11 Source: Google Analytics
IV
support instruments (supply-side scoping) is available through the GMG helpdesk, enabling
GMG stakeholders to identify financing and technical assistance support instruments.
A good number of lessons have been learned over Phase 1 of the Green Mini-Grids Market
Development Programme.
Under BL1, the team learned that though there are a number of GMG market assessment methodologies
currently in existence – especially GIS-based – no one methodology combined all of the different
critical pieces of information that we wanted to be included in the Programme’s market assessment
reports (e.g. main grid plans, RE resources, population densities, stakeholder initiatives, GMG policies
and regulations). In response, beginning with the very first country market assessment, for
Mozambique, the Programme has opted to apply a hybrid methodology that includes aspects of several
complementary methodologies.
Also under BL1, we learned that there was a dearth of information related to the availability of small
hydro and biomass renewable energy resources. For this reason, preliminary assessments of these
resources have been included as an activity under the Programme’s Phase 2.
Under BL2, requests for Technical Assistance through the GMG Help Desk have emerged more quickly
than anticipated. This has not resulted in any failure on the part of the Programme to provide that
assistance, which is actively on-going. However, it was obvious that virtually all demand has come
from Anglophone countries. Though GMGs are being developed in Francophone countries, few
technical assistance requests were coming from West Africa. Thus, we learned that the fact that the
Help Desk is not bilingual prevents it from being a useful resource to developers that work in French.
The Help Desk will become bilingual under the Programme’s Phase 2.
The major lesson learned relative to BL3 was that there are essentially three GMG policy issues that
left unaddressed inhibit the development of a mini-grid sector in any given country:
The existence of clear and simplified GMG licensing procedures;
The need to have and communicate regularly main grid extension plans;
The need for freedom by GMG project developers to apply cost-reflective tariffs to power
customers.
These lessons and there inclusion as policy recommendations are at the core of the GMG Africa
Strategy, developed by the Programme and submitted to the AU’s Energy Ministers in March 2017.
The Programme didn’t conduct any activities under BL4 during the Programme’s first phase, though
discussions with the Clean Energy Ministerial and the Global LEAP program have allowed the
Programme’s team to conceptualize the BL4 activities for Phase 2.
During Phase 1 implementation of the Access to Finance business line, the team learned that the
principle missing financial products and services were debt, results-based funding (RBF) to support
consumer connections, and tools to mitigate investor risk (such as currency risk and the risk of main
grid encroachment into a mini-grid market). The AfDB last December approved the Debt Fund for
Energy Inclusion, which combined with Phase 2 activities to develop a credit line for local banks, begins
to address the lack of credit available to mini-grid developers. The Programme is also planning to
develop an RBF fund under Phase 2.
The above represents the key achievements and major lessons learned by the GMG MDP under its first
phase and how the Programme team has responded to those lessons in developing the Programme’s
second phase.
V
ANNEX III - RISK MATRIX Risk Risk Analysis and Mitigation Measures
Duplication with
other partners
Risks:
The Green Mini-Grid space in Africa is both an area where much intervention is needed to achieve
the universal access objective and an area where an increasing number of actors are intervening.
The possibility of development partners duplicating their efforts is a threat to development
effectiveness.
Mitigation Measures:
Two mitigations measures will be taken: 1) Close coordination within specific partners, such as
Power Africa, ESMAP and GIZ, as well as with the Clean Energy Mini-Grids Partnership, which
is now the established forum of exchange for GMG partners and practitioners; 2) A phased
approach to the roll-out of the MDP that will allow adjustment to new developments and
implementation of a flexible work programme, avoiding duplication and increasing effectiveness.
Insufficient
financing
Risks:
There continues to be difficulties mobilizing GMG project financing.
Mitigation Measures:
The MDP will work closely with the Bank’s Debt Fund for Energy Inclusion (and other similar
vehicles) as well as contribute to the gradual implementation of clean energy lines of credit to
local commercials banks. The Programme will develop a results-based financing fund to
contribute to overcoming the barrier related to the high cost of connections relative to the very
limited purchasing power of typical households in rural Africa.
Commercially
viable business
models still to be
established
Risks:
There remain few commercially viable GMG business models.
Mitigation Measures:
The GMG MDP will expand its technical assistance offering to greater numbers of GMG
developers and document best practices relative to stimulating productive use and demand-side
management. The Programme will work with the CEMG Partnership to develop and promote
evidence of successful GMG business models. The emergence of commercially viable business
models has also been hampered by the policy environment, and specifically the reticence in many
countries to allow the application of cost-reflective tariffs. The Programme will address these
policy shortcomings through the implementation of the GMG Africa Strategy, technical assistance
to public sector policymakers, and the set-up of a GMG Policy Help Desk.
Off-grid solar home
systems (SHS),
especially those
sold through the
PAYG business
model, provide
strong competition
to the establishment
of GMGs
Risks: The off-grid PAYG offering expands at the expense of the development of the GMG
market.
Mitigation Measures: The principal aim of the GMG MDP is achieving universal power access
by 2025, as targeted by the AfDB’s New Deal on Energy for Africa. As such, the Bank and the
Programme are more than happy when the off-grid solar market grows. Off-grid solar, however,
cannot power productive use applications in the way that GMGs can; they improve quality of life,
especially for rural households, but SHS cannot contribute significantly to economic growth. The
Programme does not in any way want to discourage the growth of the SHS PAYG market.
VI
ANNEX IV - BREAKDOWN OF BUDGET (24 months)
Business Lines Unit Type Unit Price
(USD)
Quantit
y
Total
(USD)
1 - Market Intelligence
Senior international experts working days 900 250 225,000
Junior or Local Experts for data collection and analysis working days 450 250 112,500
International travels package 3000 26 78,000
Data collection and local travel expenses package 2500 26 65,000
Reports and communications package 450 26 11,700
Contingencies 7,800
TOTAL 500,000
2 - Business Development Support
Senior International Experts working days 900 400 360,000
Junior or Local Experts working days 450 400 180,000
International travels package 3000 40 120,000
Local travel expenses package 2500 44 110,000
Reports and communications package 450 50 22,500
Contingencies 7,500
TOTAL 800,000
3 - Policy and Regulatory Support
Senior International Experts working days 900 300 270,000
Junior or Local Experts working days 450 400 180,000
International travels package 3000 24 72,000
Local travel and expenses package 2500 24 60,000
Reports and communications package 450 20 9,000
Contingencies 9,000
TOTAL 600,000
4 – Quality Assurance
Senior International Experts working days 900 150 135,000
Junior or Local Experts for data collection and analysis working days 450 300 135,000
International travels package 3000 12 36,000
Data collection and local travel expenses package 2500 12 30,000
Reports and communications package 450 6 2,700
Contingencies 11,300
TOTAL 350,000
5 - Access to Finance
Senior International Experts working days 900 250 225,000
Junior or Local Experts for data collection and analysis working days 450 300 135,000
International travels package 3000 13 39,000
Data collection and local travel expenses package 2500 13 32,500
Reports and communications package 450 10 4,500
Contingencies 14,000
TOTAL 450,000
6 - Programme Management, Communication, and Outreach
Project Officer / Coordinator months 9000 24 216,000
Editor & Designer package 25000 2 50,000
Contingencies 34,000
Total 300,000
GRAND TOTAL 3,000,000
VII
ANNEX V - PROCUREMENT PLAN
Contract
Description Selection Method
Type
Estimated
Amount in USD
Estimated amount in UA
Prior/Post Review
EOI Publication Date
Contract Start Date
Comments
1
Conduct national market assessments, conduct small hydro and biomass resource mappings, continuously monitor sector market data
QCBS Lump Sum
500,000
371,932.49
Prior Review
Q2 2017 Q4 2017 Contract 1 combines
activities 1-3
2
Maintain and expand GMG Developers Help Desk and technical assistance provided, conduct mappings of and action-research activities relative to productive use and demand-side management, support “Training Centers of Excellence in Mini-Grids”, provide advisory/help desk services to policy makers, and conduct a feasibility study on alternative billing methods
Direct negotiation
Lump Sum
1.4 million
1,041,411 Prior
Review Q2 2017 Q4 2017
Contract 2 combines activities 4-8
3 Introduce Quality Assurance Framework in selected countries
QCBS Lump-Sum
350,000 260,352.74 Prior
Review Q2 2017 Q4 2017
Contract 3 is for activity 9
4
Design of RBF facility in support of GMG rural consumer connections, conduct commercial financiers’ capacity needs assessment and develop subsequent training program linked to envisaged green credit lines, and conduct study of supplier and export credit arrangements
QCBS Lump-Sum
450,000 390,239.25 Prior
Review Q2 2017 Q4 2017
Contract 4 combines activities 10-12
Programme Officer IC Time-base
d 216,000 193,919.37
Prior Review
Q2 2017 Q3 2017
English Editor IC Time-base
d 25,000 21,679.96
Prior Review
Q2 2017 Q3 2017
Graphic Designer IC Time-base
d 25,000 21,679.96
Prior Review
Q2 2017 Q3 2017
Total Cost 2,966,0
00 2,572,110.25
VIII
ANNEX VI – SEFA GOVERNANCE
SEFA is administered in accordance with Bank procedures, rules and policy guidelines. In line with the
Technical Cooperation Fund Reform12, which articulates the division of labor of the different
departments as far as TF is concerned as below. The Resource Mobilization and Partnerships
Department (FIMB) provides fiduciary oversight and is responsible for formal communications with
existing and potential donors to the trust fund.
The SEFA Secretariat is housed in the Renewable Energy Department (PERN). The Renewable
Energy Division (PERN1) is the operational supervisor of SEFA as it monitors and ensures the
implementation progress of all approved projects, as well as coordinates the assessment of impact and
results of each project funded thereunder. The Secretariat is composed of a Coordinator (PERN staff
member), and technical advisors in finance, policy and operations.
The PERN Department Management Team (DMT) reviews all requests for funding against
eligibility and selection criteria and makes a formal decision to clear grant requests for SEFA’s pipeline
in close coordination with the Energy Financial Solutions, Policy & Regulation (PESR). This allows
origination teams to move forward in the internal review and approval process. The DMT is chaired by
the PERN Director and includes the Division Managers of PERN1 (Renewable Energy Division),
PERN2 (Off-Grid Division).
The Technical Review Committee (TRC), established under the Multi-Donor Arrangement, examines
and reviews all proposals for funding and ensures that these are technically and financially sound, are
fully aligned with the Bank’s strategies and policies and comply with applicable rules and procedures.
The TRC is chaired by the divi of the Resource Mobilization and Partnerships Department (FIMB) and
includes representatives from the Office of the General Counsel & Legal Services Department (PGCL),
Fiduciary & Financial Management, Inspection & Procurement PolicyDepartment (SNFI), Financial
Control Department (FIFC), Strategy & Operational Policies Department (SNSP) and sector operations
departments including the Renewable Energy Department (PERN) and Energy Financial Solutions,
Policy & Regulation (PESR). Other Bank’s Operational Departments and/or Units can also be called
upon to provide technical inputs, as necessary.
An Oversight Committee (OC) composed of representatives of Donors to the Trust Fund and
representatives of Bank Management is responsible for the overall governance of SEFA. The OC is
chaired by the Vice-President - Power, Energy, Climate and Green Growth (PEVP) Complex. It meets
at least once a year to: (i) provide general policy and guidance, (ii) review and approve the operational
focus of SEFA, (iii) undertake annual reviews of the progress made during the year and examine and
approve annual work program and objectives of SEFA for the coming year, and (iv) approve Component
I and Component III proposals over USD 1 million prior to presentation to the Bank’s Board of
Directors. The decision making methods and procedures of the OC will be determined by the committee
members.
Board of Directors (BOD): grant requests exceeding USD 1 million are referred by the OC to the BOD
for final review and approval in line with standard operating procedures.
12 ADF/BD/WP/2005/113/Rev.3 dated 14 July 2006