DEVELOPMENT AND ENERGY IN AFRICA

1. DEVELOPMENT ANDENERGY IN AFRICA CASE STUDY FOR ZAMBIA GVEP M&EED Meeting UNEP Risø Center 7 December 2006

2. Energy Services companies • Large scale introduction of solar PV in the Eastern province of Zambia late 1990’s • ESCO project started by the Department of Energy with funding from the Swedish Development Cooperation Agency (SIDA) • Identify the conditions of for solar PV systems in rural areas • Locate prospective entrepreneurs • Help entrepreneurs to get started

3. Chipata Energy Service Company - CHESCO • Located in Chipata, Eastern province of Zambia • Started operations in the year 2000 with with 150 solar panels - view of supplying solar home systems. • Current work force: director, admin. officer, two technicians. • Major clients: • household - civil servants, farmers • businesses • institutions - schools, clinics and churches.

4. Nyimba Energy Service Company - NESCO • Nyimba is situated about 300km east of Lusaka and it is fairly a new district • The grid electricity has just been extended to the town. • The company started operations with 100 solar home systems. • The clientele of NESCO comprises mainly farmers, civil servants, business houses and some institutions. • It currently has a total work force of 5 persons.

5. Financial performance of ESCOs (1) The ESCOs offer a service of supplying solar electricity to the community. The main sources of income are: • Application fees • Sale of accessories • Service fees – K65,000 • Installation fees • Other income – Bank interest, reconnection fees, transfer of system fees, and battery charging contribute to other income.

6. Establishment of the ESCOs Energy Service OUTPUT ENERGY SERVICE INPUT SECTOR OUTCOME IMPACT Employment created Electricity Domestic Consumer Health Sector Education Sector Business Improved information dissemination Improved and / or extended lighting Income Generation Time Saving Economic Development Social/ Health improvement Gender Educational CAUSAL DIAGRAM

7. Excel and Word documents

8. Findings ESCOs not financially sustainable Positive impacts have been identified and contribute to the general well being of the people. Different ESCO clientele benefit in different ways

9. Findings 1 Energy service company generated employment Four employees at CHESCO and five at NESCO

10. Findings 2 Business sector impacts • Extended business hours • Extended business opportunities – services • Reduced cost in demonstrating cassette quality for prospective buyers (Running cassette player cheaper with PV electricity than batteries) • Improved security => Increased revenues and income

11. Findings 3 Households (farmers and civil servants) • Improved lighting quality • Entertainment and information through television • Improved educational performance. • Civil servants: read and write in the night • School children: read and do home work in evenings • Teachers retained in rural areas • Farm production: Processing of farm produce in late evenings, ensures delivery on time and reduces the risk of income forfeit .

12. Findings 4 Institutions – Clinics, churches, Schools • Schools: Lighting for evening study/classes => Improved performance and increased pass rates • Clinic: Improved water supply – patients no more have to collect water (previously, in dry season no well: walk long distance and immune defense reduced due to fatigue) • Improved hygiene and less prevalence of diarrhea diseases • Improved security at the premises • Reduced costs as diesel is replaced by solar energy

13. CONCLUSION Introduction of solar home systems has brought about quite a number of positive changes. SHS not only provide sufficient light but also information and entertainment through television, radio, and DVD/Video players, ESCO not sustainable – yet many benefits to people

14. Workshop response (1) • 1. To what extent can the current initiative be improved as a decision making tool? • 2. How best can stakeholders work together to realize impact on development from energy interventions? • 3. What additional information would have been useful?

15. Workshop response (2) Need to: • disseminate information to stakeholders • involvement ofgovernment in the process/ invite politicians to workshops • present the findings to the relevant sub committee in parliament • mention other service providers for sustainability purposes • introduce feature articles in the print media on findings • provide working figures • include aspects such as HIV/AIDS, gender/equity, and good governance • categorize and characterize target groups in the case study by e.g. income level • consider the stage of the intervention; short term/starting/period of operation Train a core group in the department of energy on the DEA framework? (How to use it as a decision making tool)

16. Financial performance of ESCOs • Without government support (subsidies at either investment or operation level) the ESCO’s have no capacity to sustain operations. • Evident in failure to replace run down system batteries. • Been making losses since inception • No financial reserves to purchase run down batteries. • Not sustainable - no capacity to reinvest and continue to offer the service

17. Financial performance of ESCOs (1) The ESCOs offer a service of supplying solar electricity to the community. The main sources of income are: • Application fees • Sale of accessories • Service fees – K65,000 • Installation fees • Other income – Bank interest, reconnection fees, transfer of system fees, and battery charging contribute to other income.