Arun P. Sanghvi Consultant Workshop on Achieving Universal Electricity Access in Myanmar

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

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

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

5. Anatomy of a SWAp organizing framework “Many Partners, One Team, One Plan” • Country-owned and led, results focused, long-term sector development program • Brings together development partners and other stakeholders to coordinate aid effectiveness within the sector • Implementation aligned with national development priorities and targets • Traditionally used to coordinate investments in schools and health clinics; but now being deployed effectively for scaling up electricity access nationwide (Rwanda, Kenya, Indonesia, SE4ALL) • Sustainable and predictable funding anchored by a least cost sector-wide investment plan for national electrification program; integrating technical, financial and implementation. Shift from piecemeal aid delivery, project-by-project, donor-by-donor to programmatic, results-focused implementation framework

6. Rwanda National Electrification Program – clear vision and targets Post-conflict imperative for rapid scale up of productive infrastructure for powering accelerated growth and social sector services delivery, and meeting basic energy needs Extremely low electrification rate (65,000 connections = approx. 6% ) Severe drought period led to shortages Low available generation capacity (41MW) 50% peak hour load shedding Electrogaz recorded annual operatinglosses>US$9.1million Recovering from civil war 110,000 households and enterprises connected (80% of which are in Kigali) 50% Health facilities with access to reliable energy 20% Schools with access to reliable energy 25% Sector offices with access to reliable energy Urgent Electricity Rehabilitation Programme (UERP) invests US$34 million to deliver 20MW of thermal generating capacity Next Steps: SWAp A programme to increase electricity connections from 110,000 (2008) to 350,000 (2014), and substantially increase access to electricity for social infrastructure 2004 2008 2009-

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

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

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

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

11. Current Electricity Network More than 60 per cent of population live within 5 km of existing network

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

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

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

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

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

17. Affordability of Electricity by District Percent of population with expenditure of less than US$1.25 perday Source: EICV2 Survey

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

19. 2009 Grid Program

20. 2010 Grid Program

21. 2011 Grid Program

22. 2012 Grid Program

23. Access Programme to 2020

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

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

26. Balancing affordability for new users, improving financial health of national utiltity, and program financing on a sustained basis • Planning for affordability • The proportion of households that live on less than US$1.25 per day is between 50% and 80% in most areas • But affordability analysis showed a relatively high willingness to pay for electricity • Despite low income levels in Rwanda, analysis showed that370,000 hhs would be willing and able to pay cost of grid connection and recurrent charges • Targeted cost reduction per connection: US$1,000 (in 2009) to US$600 (in 2013) due to planned efficiencies Controlling costs • Technical specifications were revised: • Changing from lattice framed steel towers to wooden poles (below) • Using single-wire earth return (SWER) lines in rural areas • Using local manufacturing for required materials, wherever possible • Doubling contract sizes to gain economies of scale

27. Sustainable Financing Policy Platform Underpinning NEP- SWAp Prospectus time slice 2010-2014 Consensus built around “80-10-10” policy for first SWAp Prospectus Concessionary finance from Donors on-granted to ELGZ , with policy to be re-visited for second SWAP time slice post 2014

28. Partner Pledges - Prospectus Donor Financing Round Table (Sum)

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

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

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

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

33. Other National Electrification programs utilizing SWAps AFREA Support for Energy Sector SWAps Kenya NEP (population 41 million; access ~ 29 %) • Prospectus raised US$1.5 billion to support government target of 1 million new connections over 2009-2013; implementation rate scaled up from ~40,000/yr. to ~ 250,000 connections/yr. Indonesia Prospectus preparation ongoing (population ~235 million. Access ~ 70 percent) • 75 million w/o access; investment required ~ $700m/yr. plus generation; implementation rate ~ 1,000,000 connections/yr. • PNG NEP Prospectus preparation ongoing (population 7 million; access ~ 17 percent)

34. Kenya National Electrification Program Investment Prospectus (2009-2014) - $1.9 Billion

37. Wither Forward - Myanmar's National Electrification Program

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

40. cè-zù tin-ba-deh thank you