INSTITUTIONAL INFRASTRUCTURE FRAMEWORK FOR PV DEPLOYMENT IN DEVELOPING COUNTRIES

2. INSTITUTIONAL INFRASTRUCTURE FRAMEWORK FOR PV DEPLOYMENT IN DEVELOPING COUNTRIES Presentation by : Lara Bertarelli, IED ~ SIDA 10th March 2003 ~

3. Structure of Presentation • Brief overview of the document • Why? The importance • The Framework • Illustration through an actual project • The challenges

4. Two Main PV Deployment Approaches : (covered in 2 RPG’s) • Sales Model (market forces) : • Service Models (Rural Electrification Programmes cum Development Programmes) quality of systems? Low prices preferred to quality, after-sales services? info to consumers? Customer protection? deployment to poorest segments? Availability of credit usually limited many stakeholders, long-term perspective, management? • Require differing levels of government intervention/ institutional back-up • The two should co-exist…

5. Direct Sales – Institutional framework needs: • Certification and standards (+ enforcement) adapted to national situations • Quality control all along the delivery chain • Public information on PV, components, maintenance • Clear definition ofroles of actors • Encourage dealers to offer after-sales services • Development of appropriate financing mechanisms (see RPGs)

6. Institutional Framework Funding • FundamentalFunctions to be performed Capacity Building/Info Dissemination • The Agents needed to carry them out • Relationships: contract / code of conduct needed between the agents • Financing and Funding Financing

7. The Public Authority’s functions : • Planning + Regulation (standards) + Enforcement + Capacity Building + Information Dissemination • Committed • Coherent and co-ordinated strategy • Funding modalities • Define role of the private sector • Monitor & enforce legal obligations • Some functions can be delegated

8. The Energy Service Provider : • Provision of a service to end-users @ fair prices whilst maintaining quality of service and proper functioning of equipment Flexible boundaries with End users • installation of the equipment • maintenance • collection of payments • its’ role will be dependent on the capabilities of the end-user org. and the type of contract negotiated for

9. The Service Contract • Total service delegation to an Area  progressive coverage obligations • Term – technical life of equipment • Fixed ceiling fee • Payment modalities – concessionaire finance • Concession agreement • Operating contract • Ownership remains public (community ownership) • Production, operation, maintenance, connection, billing and recovery and specific O&M contract shorter than lifetime of equipment

10. End-user Organization • Essential component to long-term sustainability • Administration of billing, collection of payments, deal with defaults of payment • Protecting end-user interests • Providing feedback to public authority

11. The Facilitator’s functions : • Intermediary and capacity builder • Full role of a regulatory structure can be delegated to it • Development and provision of tools for service provider and end-users • Proposing standards, developing contracts collecting data and providing feedback to the public authority • Oversee drafting of contracts, provide support

12. The Relationships :

13. Illustration through the Regional Solar Pumping (RSP) programme funded by the EC

14. Location of the programme : The 9 CILSS Countries Mauritania + Cape Verde Mali Niger Senegal Chad Gambia Guinea Bissau Burkina Faso 626 pumping systems Budget 63 MEuro 644 community systems (schools + hospitals) = 1.3 MWp installed over 12 years

15. Breakdown of RSP budget (63 M€)

16. Initial RSP Institutional Scheme System Management u Local community structure “Owns” and manages the system Voluntary basis u Maintenance contract u Cashaccount u Provisionfor renewal u Termaccount

17. Rural Municipalities Water Supply Department (Control) Redefinition of Responsibilities Transfer of responsibilities Service contract Follow-up Control Accreditation Control Water Users Association (WUA) Audit and Support Control Negotiate water price Select the operator Private operator Private person Service agreement Public Service Maintenance contract Water Supply End users

18. RSP Initial Financial Rules • End-user contribution covers : • operating costs • maintenance contract • provision for renewal of pump and inverter (but not the PV panel or the water tank and tubes) 40% to 60% recovery on total water production potential ensures sustainability • Payment for water : • fixed fees or per quantity. • Typical water price : 250 FCFA/m3 (0.38 € / m3)

19. Initial rules have been adapted to national context

20. Challenges for the future Continuation of the decentralisation process and clarification of roles and responsibilities : need for institutional clarification Emergence of private operators : time, resources, continuity are needed Build-up audit, control, financial management and support capabilities. Related costs should be included in the price of water

21. Challenges… • Do the agents and stakeholders exist? Building the delivery chain (requires appropriate frameworks) • With the required technical, financial, contractual and managerial capacity? (requires to make players and skills available) • Are there enough projects / concessions / incentives to entice potential entities to become energy service providers -> project bundling (appropriate financial and contractual instruments) • Issue of enforcement in weak legal contexts

22. THANK YOU