Kenya Implementation Manual: Financing Mechanisms for Solar Electric Equipment ESM231 W Energy Sector Management Assistance Programme Mxg<\A A D Report 231/00 1zT it t ILI VIJuly 2000 JOINT UNDP / WORLD BANK ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) PURPOSE The Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP) is a special global technical assistance program run as part of the World Bank's Energy, Mining and Telecommunications Department. ESMAP provides advice to governments on sustainable energy development. Established with the support of UNDP and bilateral official donors in 1983, it focuses on the role of energy in the development process with the objective of contributing to poverty alleviation, improving living conditions and preserving the environment in developing countries and transition economies. ESMAP centers its interventions on three priority areas: sector reform and restructuring; access to modern energy for the poorest; and promotion of sustainable energy practices. GOVERNANCE AND OPERATIONS ESMAP is governed by a Consultative Group (ESMAP CG) composed of representatives of the UNDP and World Bank, other donors, and development experts from regions benefiting from ESMAP's assistance. The ESMAP CG is chaired by a World Bank Vice President, and advised by a Technical Advisory Group (TAG) of four independent energy experts that reviews the Programme's strategic agenda, its work plan, and its achievements. ESMAP relies on a cadre of engineers, energy planners, and economists from the World Bank to conduct its activities under the guidance of the Manager of ESMAP, responsible for administering the Programme. FUNDING ESMAP is a cooperative effort supported over the years by the World Bank, the UNDP and other United Nations agencies, the European Union, the Organization of American States (OAS), the Latin American Energy Organization (OLADE), and public and private donors from countries including Australia, Belgium, Canada, Denmark, Germany, Finland, France, Iceland, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Sweden, Switzerland, the United Kingdom, and the United States of America. FURTHER INFORMATION An up-to-date listing of completed ESMAP projects is appended to this report. For further information, a copy of the ESMAP Annual Report, or copies of project reports, contact: ESMAP c/o Energy, Mining and Telecommunications Department The World Bank 1818 H Street, NW Washington, DC 20433 U.S.A. Kenya Implementation Manual: Financing Mechanisms for Solar Electric Equipment July 2000 Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP) Copyright©3 1999 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing July 2000 ESMAP Reports are published to communicate the results of the ESMAP's work to the development community with the least possible delay. The typescript of the paper therefore has not been prepared in accordance with the procedures appropriate to formal documents. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The Boundaries, colors, denomninations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgement on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the ESMAP Manager at the address shown in the copyright notice above. ESMAP encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Contents Contents ............................................................... iii Preface ............................................................... vii Acknowledgments ............................................................... viii Abbreviations and Acronyms ............................................................... ix Units of Measurement ............................................................... ix Currency Equivalents ............................................................... ix Executive Summary ................................................................1 Identifying and Organizing the Rural Loan Groups .............................................................2 The Loan Package ...............................................................2 The Technical Package ..............................................................3 Conclusions .............................................................3 Lessons Learned ..............................................................4 Background ................................................................5 Objectives of the Implementation Manual ...............................................................9 SHS Finance Methodology and Player Roles ............................................................... 11 The Solar Home System Finance Process ............................................................. 11 The Groups Involved in the Process .............................................................. 12 The Finance Partner ............................................................. 13 Rural Loan Groups ............................................................. 13 The Technical Partner ............................................................. 14 Other Project Players ............................................................. 14 Identifying and Organizing the Rural Loan Groups ......................................................... 15 Surveying the Market ........5....... 15 K-REP Mt. Kenya Pilot Survey .............................................................. 17 Cooperative Bank Group Identification Experiences ................................................... 17 Identifying and Forming Loan Groups ............................................................. 17 Group Formation Experiences ............................................................. 18 The Loan Package ............................................................... 21 The K-REP Program .............................................................. 22 The Cooperative Bank of Kenya Program ........................................ ..................... 25 Observations ............................................................. 27 Developing Financing Mechanisms ........................... .................................. 27 Coordination between Technical Partner, Finance Partner, and Loan Groups ........ .... 27 Scale Economies from Bulk Purchase ............................................................. 27 Business Loans for Solar Enterprises ............................................................. 27 The Technical Package ............................................................... 31 Systems Design .............................................................. 31 Non-use of Charge Regulators ............................................................. 32 Poor Design and Installation .............................................................. 32 Poor Component and BOS Quality ......................... .................................... 32 Batteries .............................................................. 32 Mounting .............................................................. 33 Wiring ............................................................. 33 iii Guarantees on Components ............................................ 33 Equipment Approval and Selection .33 Suppliers and Installer Selection .33 Systems Installation .34 Delivery .34 Pre-installation Inspection .34 Installation .34 User Training .35 Inspection .35 Maintenance .35 Security .36 Repairs .36 Monitoring .36 Hand-over .36 Disclaimer .36 Lessons Learned .37 Annexes Annex A: Sample Solar System Packages .A-1 System 1: Two-light system and a radio socket .A-1 Graphic Presentation-of System 1 .A-2 System 2: Four--light system, a radio, and TV socket .A-3 Graphic Presentation of System 2 .A-3 System 3: Six-light system, radio, and TV socket .A-3 Graphic Presentation of System 3. A-4 Annex B: Draft Component Standards .A-5 1. Solar Cell Modules .A-5 2. Batteries .A-5 3. Charge Controllers .A-6 4. Lamps .A-6 Annex C: Sample Installation & Service Contract Between Installer and Loan Group/Finance Partner .A-7 Annex D: Sample Solar Electric Systems: Minimum Installation Code . A-9 Annex E: Sample User Service Contract (U 1) . A-1I Annex F: Sample System Delivery Sheets . A-13 Annex G: Sample Job Completion Sheet . A-19 Annex H: Sample System Inspection Sheet (I 1) . A-23 Annex I: Sample System Maintenance/ Service Sheet (M 1) . A-27 Annex J: Technical Drawings . A-29 Annex K: Sample Survey and Loan Contract . A-31 iv Figure, Tables, and Boxes Figure 3-1. Envisaged Porject Structure, with an NGO Managing ....................................... 11 Table 5-1. The Two Types of Loan Packages ................................................. 22 Table 5-2. Business Loans for Solar Enterprises ....................... .......................... 29 Box 1-1. The Kenya Situation ................................................. 6 Box 5-1. The K-REP Loan Experience ................................................. 25 v Preface The Financing Mechanisms for Solar Electric Equipment project was initiated to obtain experience in developing sustainable finance approaches to SHS dissemination in Africa. Worldwide, under numerous projects, hundreds of photovoltaic (PV) systems have been installed using donor-driven approaches. However, few if any of these projects have grown beyond the pilot stage. A primary reason for this is that not enough attention is paid to developing sustainable financing mechanisms. In this effort, it proved more difficult and time consuming than expected to gain experience. First, the financial partners had no knowledge at all about solar home systems (SHSs). Second, SHSs are a consumer item and are generally not used for productive purposes, whereas most rural financing mechanisms are for productive purposes only. In addition, consumer loan mechanisms are not well developed in rural areas. Third, long- term assistance capacity building is required to develop the capability of such mechanisms. Two financial institutions participated in the project. One, the Kenya Rural Enterprise Programme (K-REP), used two approaches: (1) a participatory approach to creating credit groups from scratch, which proved difficult; and (2) "dealer" credit, whereby the local dealer (or installer) identified the beneficiaries/end-users but the financial institution still had contracts with the end-users. The second financial institution was the Cooperative Bank of Kenya, Ltd.; which used existirig loan groups and management structures. About US$55,000 of grant financing to create loan funds was provided by The Ashden Trust directly to the financial institutions. However, one institution used the loan money as a guarantee funds and used its own funds to create the loan fund, and the other institution matched the Ashden Trust funds to double the loan fund. Through Swedish and Dutch funds, ESMAP contracted a technical company for the quality control, training, and awareness-raising aspects as well as the description of the solar market. vii Acknowledgments Project staff of Energy Alternatives for Africa (EAA), the technical partner in the project, are grateful to the customers who purchased solar home systems through loans and who provided crucial feedback on their experiences with the new product. Special gratitude is extended to the Kenya Rural Enterprise Programme and the Cooperative Bank of Kenya, Ltd. (CBK). This report was written by Mark Hankins of Energy Alternatives for Africa and Robert van der Plas of the Energy Unit in the Energy, Mining and Telecommunications Department of the World Bank, with contributions by Bernard Osawa (EAA), Aleke Dondo (General Manager, K-REP), Geoffrey Nasubo (Senior Project Officer, K-REP), Alex Malla (Manager, Small and Micro-Credit Unit, CBK Ltd.), and Ms. Muturi (CBK Ltd.). A vote of appreciation is offered to the installers who helped install the systems during the test marketing exercise: Henry Watitwa, Bright Home Solar Services (Western Kenya); Nyagah Thagichu (Muranga & Nyanzarua); and Charles Muchumuti, Pemamu (Bungoma). viii Abbreviations and Acronyms a-Si Amorphous silicon (module) The Ashden Trust A trust of the Sainsbury Family BOS balance of system CBK, Ltd. The Cooperative Bank of Kenya, Ltd. EAA Energy Alternatives Africa, Ltd. ESMAP Energy Sector Management Assistance Programme KSh Kenyan shilling K-REP Kenya Rural Enterprise Programme NGO nongovernmental organization PV photovoltaic SACCO savings and cooperative credit organization SHS solar home system VAT value-added tax (Currently 16 percent in Kenya; rose to 17 percent for a while during project implementation) Units of Measurement DC direct current W watt Wp Watts-peak. Used to measure peak power output of solar modules. Currency Equivalents 60 Kenyan shillings = $1' KSh 1 = $0.01672 All dollar amounts are U.S. dollars. 2 As of late 1998. The Kenyan shilling varied from 60 to 67 to the dollar during the project. ix Executive Summary Where grid-based rural electrification is constrained, PV-powered solar home systems (SHSs) provide a cost-effective, viable alternative for limited household and business power requirements. This implementation manual is designed to serve as a clear, step-by-step guide for the planning and execution of solar electric system investment and credit packages in African countries. This manual is based on more than two years' worth of field experience in Kenya during which about 120 solar home systems (SHS) were installed through different financing mechanisms. It outlines two different finance approaches that address lighting and power needs of (a) rural households with regular cash income and (b) small businesses with the potential to increase their productivity with PV electricity. Financing mechanisms for SHS do not currently exist in Kenya. Some dealers provide lay- away service, whereby clients reserve their equipment and can take it home when their accumulated deposits equal the agreed purchase price. This is applied mainly to solar modules only; the end-user has the responsibility for installing the system. End-users often cut corners to save money; for example, charge controllers are seldom purchased because they are deemed unnecessary, or because systems are under-designed, with poorly matching components. This affects the quality of the installations, and end-users are likely to experience perfornance problems much earlier than necessary. The same problems are valid for cash-purchased systems. The justification for developing a financing mechanism is to address these problems. People who find it difficult to pay a large sum of cash up-front will often be able to pay a monthly fee over a certain period to purchase a properly designed system. The financing mechanisms pursued in this project will ultimately allow for (1) a better control of the quality of the solar systems, thereby reducing the chances of early equipment failure; (2) a spread-out payment that makes it more affordable for the end-user to purchase this higher quality equipment; (3) an increase in the number of people who can enjoy services by SHS; and (4) scale-economies through bundled procurement and installation, which will also offset some of the costs of the loan and the costs of quality control. The approach adopted is based on the cooperation of a finance partner and a technical partner with communities that desire solar electric systems. The finance company makes loans available to qualifying households and small businesses that desire lighting and small power systems. The technical partner insures that all systems are well designed, installed, inspected, and maintained. Loan agreements stipulate that the borrower follow technical guidelines set up by the technical partner to insure maximum system life (i.e., battery life). Rural-based service companies install and service the systems, while local artisans fabricate battery boxes and module mounts. This manual has been developed based on "on-the-ground" field experience. Some of the issues and the manner in which they are addressed may be specific and may need to be adjusted to suit the local conditions/situations on a case-by-case basis. The manual does not 1 2 Implementation Manual: Financing Mechanisms for Solar Electric Equipment provide a ready-made recipe for future programs, but merely provides feedback on an actual experience that could be taken into account when developing financing mechanisms for solar equipment elsewhere. The work done in this project involved two different types of finance institutions that are already active in rural areas. In fact, both are recognized as leaders in their field. One is oriented towards giving business loans to small, well-organized rural groups and small businesses. Members of such groups are to guarantee each other and lower defaulting risks (i.e., peer pres aure as collateral). The second type of finance group is an organized cooperative bank with experience loaning to individuals through rural-based savings and cooperative credit organizations (SACCOs). Described throughout this manual are the actual experiences of both institutions in adapting their existing financing mechanisms to the purchase and sale of solar equipment. Identifying and Organizing the Rural Loan Groups Several ways exist to identify target groups and cooperating technical and financing partners. If the initiative is starting at the community level, then interested groups must organize themselves and identify finance organizations. The groups must be legally recognized. If the initiative is starting from the financing institution, then target communities should be identified though outreach and promotional meetings. The target group is informed of the benefits and disadvantages of solar electricity during awareness meetings. Minimum data on energy requirements are collected to determine the needs of the group in the target region. In areas where people lack an understanding of PV technology, demonstrations should be held to show how solar electricity works, and to discuss the costs and benefits. Groups or cooperative societies discuss the particulars of the loan program with the financing institution, and ensure that there are no further questions lingering. By the end of this process, the complete chain of players involved is identified, and clear guidelines of their roles and responsibilities should be in place. The Loan Package Group members apply collectively for loans from the finance partner. Loan application procedures should be those already established and tested by the financing institution and the credit group. With advice from a technical partner or selected local technicians, applicants choose a system size that best fits their needs. A limited number of standardized system packages is preferred for logistical reasons.3 For each applicant, the credit group approves a loan amount equivalent to the desired systems as per the technical partner's standard designs and the applicant's credit rating. Vetting and approval procedures should be those established by the individual groups. The 3 In this project three sizes of systems were offered, ranging from 20 to 60 watts. Executive Summary 3 group submits a single request to the finance partner once it has established its total loan requirements. Each group collects deposits and payments from individual members using established procedures and makes regular payments to the finance partner. If repayment for the group as a whole is sound, the finance partner could recommend a further series of installations. Individuals with good credit history can apply for follow-up loans if they so desire (i.e., if they want a non-standard solar system, they can build it up over time with follow-up loans), or new applicants/members can join the group. The cycle of installations and repayment continues. When individuals complete repayment on a system, they become eligible for system expansion. The Technical Package Equipment is bid for by the finance partner or the loan group, with support from the technical partner. Who organizes the tender process is a decision to be taken by the finance partner; quality control is easier when the finance partner keeps this in-house, although the process may be more sustainable if it is done directly by the credit group. After evaluating the tendered bids, the successful supplier(s) delivers equipment directly to the group. The finance partner in turn directly pays the supplier(s) for the goods delivered. Minor components or accessories are procured by the installer at a budget recommended by the technical partner and agreed on by the finance partner. The solar electric systems are installed by technicians selected by the credit groups and approved by the technical partner. In case the group cannot nominate a technician, the technical partner identifies and trains technicians based within the project area. During the installation, technicians are further trained on minimum installation code and standards.4 Inspections are held on completion to confirm system compliance with minimum standards. The group should be fully involved and where possible a nominee from the group trained as inspector. Monitoring, repairs, and maintenance should be built-in into the technical packages, and provided for at least the duration of the loan repayment period. After this, clients can buy additional coverage. Conclusions It was indeed feasible, albeit difficult and laborious to organize, to establish financing mechanisms for solar electric systems for use in households and small businesses-once the right partners were identified and clear procedures were established indicating each partner's responsibilities. This is so despite the fact that solar systems are consumer goods that do not generate income in a short time period. The desire to have access to some electricity is so deeply rooted that households that have a chance to obtain a loan to acquire a solar electric system will do so. In order to get these financing mechanisms off the 4 Minimum installation code and standards cover issues from installation practice to user training. 4 Implementation Manual: Financing Mechanisms for Solar Electric Equipment ground, a certain amount of technical assistance for training and quality control is necessary, as is a limited financial assistance to slightly reduce the costs of the loans offered. The financial institutions had no prior experience with solar loans. It took the research- oriented units that carried out the projects quite a while to convince their management that solar loans are worth pursuing. The two institutions now have sufficient experience to scale up the effort, although some support will be required to help them do this properly. The first 35 systems took 1.5 years to be installed properly. The next 50 took about half a year. During a next phase the two institutions should be able to install 500 systems in less than six months. In fact, under the IFC/GEF-financed Photovoltaic Market Transformation Initiative, it is expected that 1500 systems will be installed by the end of 2000 using the general methodology set forth in this manual. Lessons Learned 1. End-users appreciated the opportunity to buy into a scheme to finance a SHS; they were able to acquire better-quality and larger systems than they i, they had been on their own. 2. The credit mechanisms tested here all deal with groups of individuals, instead of directly with individuals. The bulk purchase of equipment offset most of the cost of financing the loans. 3. The financial institutions found it more difficult than expected to implement the financing mechanisms for solar equipment, even though these were based on existing mechanisms that they regularly apply for other purposes. 4. Technical assistance proved indispensable, and it should be available over a longer period. 5. Maintenance of SHSs was often a problem; however, it was built into the project and functioned well. 6. The Kenya Rural Enterprise Programme (K-REP) solar business loans are fully "mainstreamed" now. There appears to be a substantial demand for small loans (US$1,000-10,000) in the energy enterprise business. 7. Interference beyond control of the partners can play havoc with the process, and this is a real problem. 8. Private companies are eager to cooperate with this type of effort. 9. Village-level installers played a key role. 1 Background 1.1 Availability of electricity for lighting, radios, televisions, water pumps, tools, office, and other applications is essential to the infrastructure and development of any modem day community. When electricity is available, contact between remote areas and the rest of the world becomes possible, business opportunities are created, and efficiency is vastly improved in the delivery of health, education, water, and other services to the community. Unfortunately, options for rural electrification are limited by their cost and applicability. For very basic lighting and amenity power, kerosene and dry cell and SLI batteries are the only options available and affordable to most rural households, even though over time they are expensive, inconvenient, and environmentally costly. This holds for Kenya as well as for many other (African) countries. 1.2 In Kenya, a connection to grid electricity in the near or medium term is not feasible for a vast majority of rural households. This is because there has been (1) a notable reduction of investment in the energy sector in the last decade, (2) a slowing of growth in the national power generating capacity, and (3) a reduction in the effectiveness of the Rural Electrification Program compared to population growth. 1.3 For homes and small businesses, conventional petrol or diesel generators are too expensive in terms of purchase price, operation, and maintenance. Recognizing their limited chances of being connected to the grid, many rural households opt to buy solar electric lighting systems. They often buy their equipment piecemeal, one component at the time-e.g., first a battery and a television; later, a first small solar module to avoid frequent recharging of the battery; and so on. This requires good skills on the part of the users, as the systems are technically imperfect. 1.4 Still, despite the favorable conditions created by a strong middle class and a high demand for PV technology, the great majority of rural households in Kenya (see Box 1-1) and other countries have not installed solar systems for a variety of reasons including the following: 5 6 Implementation Manual: Financing Mechanisms for Solar Electric Equipment High incremental costs of solar home systems. These costs cannot be met by most households, making income the most important constraint in uptake. Duties and taxes on imported PV equipment, high dealer margins, and high costs of doing business contribute to relatively high prices for PV electricity system installations. Poor reputation of PV technology. Often PV is seen as an inferior technology, not because of its finctionality but because of a lack of enforced installation and design standards, mixed quality of balance of system (BOS) components available locally, and a lack of full awareness among end-users on operation and maintenance of solar electric systems. About one-third of the existing systems in Kenyan rural areas are not fully operational because of poor installation, customer misuse, and poor design practices. Lack of access to finance. This prevents end-users from investing in suitably sized and installed systems. Financed solar electric systems are an attractive option for rural households and small businesses because financing allows end-users to buy properly designed, high-quality systems- larger systems than would be possible to purchase with cash. Regular monthly payments for PV systems (which are not much larger than current energy . expenditures). should suffice, over time, for loan repayments. Furthermore, the cost of financing systems can be offset by bulk purchases, which allow higher economies of scale. Box 1-1. The Kenya Situation In Kenya less than 0.5% of rural households have access to grid electricity while population growth exceeds the rate of rural connections despite major investments in the rural electrification program. Kenya has been an active market for solar home systems for almost a decade, during which more than 150,000 units have been installed on a commercial basis and an estimated 15 -25,000 new systems being installed yearly. Whereas the figures are based on module sales, it is important to note that not every system is 'complete' (i.e., uses a charge controller). The private sector has responded quickly to this growing consumer need, offering an increased and diversified supply of solar energy components and technologies on the market. Currently there are more than ten solar module distributors and at least five companies manufacturing balance of system components (BOS). Scores of agents market, install and service solar electric equipment in rural areas. Presently the estimated size of the Kenya solar PV market is valued at about US$5 million and has been growing at more than 25 % per year for the last 7 years. Today, there are more rural Kenyan households with solar electric systems than the government's Rural Electrification Programme customers, despite the fact that PV equipment is taxed and REP equipment is subsidized!. This demand has created and sustained a growing market for solar products and services, mainly from households with ability to meet initial costs of purchase and installation. Most of these relatively well to do households have acquired systems on a cash basis, indicating that affordability, among other considerations, is an important factor in the solar energy technologies uptake among rural households. Background 7 1.5 The work in this manual is based on the premise that solar home systems (SHS) are a mature technology and that, with some effort, they can become products offered routinely by financial institutions, in much the same way cars are financed through loan packages in industrialized countries. However, finance efforts in Africa have often failed because not enough attention is paid to details of the finance process or the sustainability thereof. The difficulties involved in setting up a loan program should not be underestimated. Indeed, despite the involvement of two professional finance institutions, this pilot effort suffered many of the pitfalls associated with rural finance. Managing loan programs with dispersed groups of beneficiaries is a risky and complicated business if not done correctly. The three key obstacles faced during this initiative were as follows: Banks were not familiar with SHS technology, and although they immediately saw the potential for large-scale application and the impact it could have on rural development, they were hesitant to make a full commitment and required outside funding to start addressing the issues. Rural groups had very high, often unrealistically high, expectations of the project. IDespite the large number of solar systems in use in Kenya, technical capacity for installation and maintenance is very limited in rural areas, and substantial training was required. 2 Objectives of the Implementation Manual 2.1 This manual presents a method for using commercial finance to provide basic rural electric services using solar electricity. It is designed primarily to supply solar home systems, whose high demand in rural Kenya is due to the priority rural people give lighting, TV, and radio services. This approach-refined through actual pilot experience- employs technical and finance partners that cooperate with rural groups in specified target areas. 2.2 Specifically, this manual seeks to: provide an integrated package that links rural finance mechanisms with the provision of properly designed, installed, inspected, and serviced high quality solar electric systems at the local level. Technical specifications insure that the systems last longer than the length of the loan repayment period; e establish credit procedures for lending to rural households through local savings or credit groups. This manual describes two schemes for providing SHS loans. Both loan methods specified maximum payback periods of 18 to 24 months. Interest was fixed by the finance institution as per normal prevailing rural rates, possibly slightly reduced through external financial assistance; establish credit procedures for rural-based enterprises with potential to increase productivity with access to electricity. Such enterprises can sell equipment (PV systems, components, appliances), electricity (i.e., for lights/radio power in market centers, battery charging), or services that electric power enables (electric workshops, video cinemas, etc.); provide guidelines for use by locally based solar and rural electrification (RE) establishments and/or companies for design, installation and service of systems. In the package described herein, local technicians are trained and certified to install and service solar electric systems. Individuals from loan 9 10 Implementation Manual: Financing Mechanisms for Solar Electric Equipment groups can also be trained as inspectors,5 and to know when to call for a technician or have the owner do the repair himself; provide assistance to borrowers (end-users) in the form of energy management, maintenance, training, etc. to properly operate their systems and/or business planning (when applicable); provide technical support services to local technicians in solar systems design, installation, quality control, systems sizing, component procurement, technician training, etc.; and provide sustainable methods for monitoring, evaluating, and documenting the performance of systems and the effectiveness of the financing mechanisms. 5 Inspectors will examine systems to verify that they are installed to standards. 3 SHS Finance Methodology and Player Roles 3.1 In the system outlined herein, a finance group advances loans and earns income from interest and fees. The technical partner provides, for a fee, a defined number of technical services, including supply of components and the design, installation, and maintenance of solar systems at market prices. Rural groups are the beneficiaries of the project, and are active participants in the project through their loan organizations. Figure 3- 1 shows the envisaged project operational schematic. The Solar Home System Finance Process Figure 3-1. Envisaged Project Structure, with an NGO Managing Financing Institution /t ~Suppliers < 1 /\ ~~~~~~~~~~~~Installers tgroup // 3.2 Essentially, there are three parts to a SHSs finance initiative. The initiative must: find and organize one or more groups of loan customers; provide customers with loans that are continuously offered; and 11 12 Implementation Manual: Financing Mechanisms for Solar Electric Equipment insure that the PV systems work properly, at the minimum for the duration of the loan. These three steps are outlined here and discussed in detail in their respective sections. Step 1: Identifying and Organizing the Rural Loan Groups Outreach and promotion > Market survey and customer screening Group identification Group formation Step 2: The Loan Package > Loan package design > Screening and acceptance of loans > Loan disbursement >; Loan repayment - Step 3: The Technical Package (designing, packaging, delivering and maintaining the PV product) > System design and sizing (packages) > System tendering, procurement and payment > Delivery, installation, certification, end-user training and inspection > Maintenance and service of systems The Groups Involved in the Process 3.3 Two keys to the success of a SHS financing mechanism are (1) to keep it as simple as possible and (2) to satisfy the interests of all parties. Depending on the location and needs of the beneficiaries, different players may be involved in different circumstances. For example, the loan groups might be locally based NGOs, credit groups, cooperatives, etc. The technical partner could be a dedicated solar company, a technical consultant, a power company, etc. 3.4 There must be a clear understanding of the specific roles among the project partners for smooth and sustainable operation of the project. A memorandum of understanding or contract should be drawn up between the finance partner and the technical partner, and between the finance partner and the rural loan groups, and duly signed by all parties. These documents should specify each partner's responsibilities and obligations to the project. There should be clear terms of reference for the above partners and any subcontracted parties. SHS Finance Methodology and Player Roles 13 3.5 Finance groups, rural loan groups, and technical partners must agree on timetables, record-keeping methods, and key milestones to be completed during the project. In order for the project to retain momentum, and to remain interesting to the groups involved, the timetable should be realistically drawn up, and carried out. Partners must agree on fund transfer methodologies (i.e., LPOs, payment on delivery, etc.) well in advance of project execution. The Finance Partner 3.6 The finance partner oversees the loan process, ideally on-loaning to a number of rural credit groups and developing a package that can be used in a number of locations. Its work involves design, implementation, and management of the credit scheme, and may include loan collection. The finance partner should work within the protocols of its network of rural loan groups. 3.7 With the support of the technical partner, the finance partner may also be responsible for tendering bids for and procuring project equipment, and payment to suppliers and technicians for equipment and services rendered. Rural Loan Groups 3.8 Rural loan groups should be structured groups of individuals with a common desire to obtain services that PV can provide. Preferably, they should have experience with participating in or managing credit schemes. The group should at the minimum: have a defined leadership, be a legal entity, and * have an established bank account and lending system. 3.9 Individuals and small businesses outside of loans groups should only be considered if they can individually guarantee their loans and if such loans will b:enefit the overall program. 3.10 The rural loan group's main duties are: ensuring that loans are repaid promptly using existing mechanisms, and * repaying these funds to the finance group. 3.11 In addition, rural groups may be responsible (often with the technical partner) for: conducting demonstrations of SHS in new areas, pre-screening beneficiaries ability to repay loans, assessing energy requirements and types of houses, 14 Implementation Manual: Financing Mechanisms for Solar Electric Equipment selecting and hiring technicians, storing equipment and preparing sites before installation, and * ensuring that the systems are inspected and maintained. 3.12 With regard to this last goal, the loan group may nominate able persons to be trained by the technical partner In the long term, loan groups may desire to take on contracting of system installation and inspection activities to reduce costs. The Technical Partner 3.13 The technical partner insures that solar electric systems are properly designed, installed, and maintained. The technical partner may also: develop a tender and procurement process of equipment to insure quality of components and price competitiveness. develop (or set) a minimum installation code to be observed by all participating teams. be responsible for training of installation technicians and endeavor to ensure end-users are adequately trained on minimum system maintenance by the installation technicians ensure that systems all installed systems are inspected in line with the minimum installation code. Other Project Players 3.14 In this initiative, the technical partner subcontracted supply and installation of equipment to local companies. Central PV suppliers were asked to bid competitively for equipment. Local technicians installed the equipment to acceptable standards. 3.15 Private sector agents/dealers (suppliers) supply major system components (modules, batteries, charge controllers, lights and fixtures, and DC sockets) through a tender process. This project bought systems in batches of 25-30 units, thereby obtaining significant cost reductions for systems. 3.16 Rural-based technicians install systems and offer service subcontracts to system users under a contract developed by the technical partner. They will also be required to supply minor system components (e.g., cables, switches, clips, and junction boxes). Funds for the purchase of these components may be provided by the finance partner (through the group) before commencement of work (due to their small size). As the loan scheme grows, they play a larger role in equipment supply. 3.17 To insure that systems work for the loan period (two years), they must be installed to acceptable standards. There is therefore a need for independent, trustworthy inspectors to visit systems to verify that installation standards are met. 4 Identifying and Organizing the Rural Loan Groups 4.1 The loan process for SHSs depends on the complete involvement of community loan groups in project planning and execution. Group identification is thus a crucial step, as only strong, self-reliant credit groups will be successful. Ideally, the finance partner should select groups to participate in the scheme. However, because the technical partner (or solar company) is more likely to be motivated to identify potential markets for its product, its input may be required. During this stage, a number of activities need to be undertaken simultaneously, including awareness raising, loan group sensitization, user identification, and market surveys. Surveying the Market 4.2 The target market for SHSs must be viable. To insure that it is, a profile of the market should be drawn up to establish whether the target group - has sufficient knowledge about solar equipment, * views solar equipment to be a priority, * can afford solar equipment systems, and * is willing to pay for solar equipment systems and installation and maintenance, plus finance charges. 4.3 This can be done through market surveys that analyze data from target individuals and groups. In areas where solar PV is well known, it may not be necessary to conduct surveys. Advertising the program and asking potential buyers fill out application forms for systems may be sufficient to gauge demand. 4.4 If a survey is carried out, it should be short and simple enough to be completed quickly (see Annex L). Lengthy surveys add much time to the data collection process, and thus to the costs. An adequate sample size should be used (i.e., more than 50 respondents) that is properly weighted from each of the target groups. The survey group should not be a random sample, because not all rural individuals will be able to afford even financed systems (in Kenya less than 40 percent of the rural population can afford 15 16 Implementation Manual: Financing Mechanisms for Solar Electric Equipment "standard" SHSs, even if financed). Effort should be made to make sure that the sample group is representative of the target group. 4.5 The data gathered should include current expenditures on energy (kerosene, dry cells), incomes, and previous loan history. The data should be analyzed in such a way as to enable the finance partner to make a decision to invest in solar electric equipment for this community. Other information from the survey will be used to design the finance package and solar electric systems. 4.6 For the finance partner, the survey should answer the following: What are regular incomes and ability to pay? What is the maximum size of loan that can be offered to the target group? Are the loan groups sufficiently organized? What repayment periods, interest rates, and monthly payments are individuals expecting? Do individuals in the group have a history of receiving loans and/or saving? What is the community's record in terms of repaying or defaulting on loans? 4.7 For the technical partner, the survey should answer the following: * What are current energy use and expenditure patterns? * What are the energy need priorities? E How are households dispersed, and what are the types of houses? * What size(s) system can best meet the needs of this group? a What is the history of PV systems in the target area? * Are the end-users expecting more power than PV can economically deliver? * Are the end-users likely to follow guidelines recommended by the project? a To what degree must end-users be educated about PV systems? * Is there a capability to install, service, and maintain, or must this be developed? * Is there likely to be a grid extension to the target area? Identifying and Organizing the Rural Loan Groups 17 K-REP Mt Kenya Pilot Survey 4.8 During the pilot initiative, a needs assessment survey was conducted among 60 community members in two target communities in the Mt. Kenya area. The surveyed group included individuals who had an interest in obtaining PV systems and who were also members of informal solar groups. Individuals from the survey areas were informed well in advance that a survey would be conducted. 4.9 The survey found that the target groups selected were good risks for solar lighting systems credit. Specifically, it found that: . Most could afford a solar loan, with the average requested loan amount at KSh 40,000 ($700). * Average monthly expenditure on energy (excluding heating and cooking) was KSh 570 (about $9), spread equally between kerosene and dry cells. a 25 percent had experience with PV systems. * More than 80 percent had received loans before. Cooperative Bank Group Identification Experiences 4.10 The Co-operative Bank of Kenya, Ltd. (CBK), identified two loan group partners without conducting formal market surveys. Because the bank has a large network of partner SACCOs (more than 2000), it simply contacted a number of its most successful SACCO partners and asked if the members were interested in solar lighting systems. Several SACCOs responded immediately. They were located in high-income, off-grid, tea- growing areas and had members that were already familiar with PV systems. They invited the project team to come to make presentations to their groups. 4.11 CBK and Energy Alternatives for Africa Ltd. (EAA) sent teams to meet with SACCO groups; the first meeting took place with the Muranga Tea Society in March 1998, the second with 01 Kalou Dairy Cooperative in October 1998. These meetings were held during ordinary SACCO membership meetings. Systems were demonstrated and discussions about the technology were held with the groups. The prices for systems to be offered by the project-which were much lower than typical commercial prices-were advertised. In both cases, there was a high interest among group members and sign-up lists were immediately filled up. Consumer demand was so high that all of the available systems were immediately booked. Identifying and Forming Loan Groups 4.12 Efficient, organized, honest loan groups are the cornerstone of any rural finance program. The finance partner must organize the loan groups and fund recovery method. A good solar finance program therefore needs well-run loan groups. Organizing new loan groups based on potential solar home system loans is relatively complex process. Rural customers for SHS are very widely distributed, and communicating between and 18 Implementation Manual: Financing Mechanisms for Solar Electric Equipment arranging meetings for such groups, particularly when they are self-funded, is logistically difficult. As explained below, although this project expended significant resources helping several groups organize themselves, the groups did not stay together for a number of reasons.6 If new group formation is attempted, it should not be taken lightly, and it should be done by skilled finance groups. The K-REP case study below may help others avoid the pitfalls of setting up new groups from scratch. 4.13 Working with existing rural credit groups is, in this initiative's experience, the most effective way to develop SHS loan packages. Established credit groups have ('1) a history that the finance partner can review and (2) screening methodologies that are more impersonal and objective than they are for "informal" groups. 4.14 In this project, two types of rural loan groups were used: K-REP Informal Loan Groups. These groups were formed for the expressed purpose of getting solar loans. K-REP guided the organization of the groups through its field offices. CBK Rural SACCOs. These are established tea and dairy societies that handle payments for rural tea farmers. They give farmers loans based on their tea/cash crop income. Because of the poor likelihood that the grid would be extended to their location, many of the households prioritize solar- powered lighting and TV systems. The tea SACCOs are relatively rich, and maintain a dollar account for their foreign exchange earnings. CBK Ltd. also worked with dairy SACCOs that are generally less well to do than the tea SACCOs. Group Formation Experiences 4.15 It was crucial to K-REP that they get groups that had the right attitude toward the loans, so the initial group screening process took longer than anticipated. K- REP engaged in preliminary discussions with several groups-two in Mt. Kenya Region and two in Western Kenya-before actually offering loans. The initial two informal loan groups around Mt. Kenya did not work out (after a six-month group identification and formation effort). K-REP then took the finance 'package to Western Kenya, from where they had received applications from several groups of secondary school teachers. These groups did accept the terms, and ended up receiving loans for 35 systems. Coop Bank selected Muranga to work, based on its experience with the SACCOs in that area. It discussed the project with a few selected SACCOs, and started working with the tea cooperative that reacted the quickest. It later started to work with a dairy cooperative as well. 6 Other projects in East Africa (Uganda, Tanzania) have been unsuccessful in their attempts to create solar PV loan groups. Identifying and Organizing the Rural Loan Groups 19 4.16 Approach 1: Self-Selected K-REP Groups (Mt. Kenya). These groups had earlier approached the technical partner (EAA) for assistance in developing a solar loan program,7 and therefore had some knowledge of solar equipment. The project staff felt that this awareness would be of benefit to the project. K-REP and EAA conducted outreach and promotion campaigns to sensitize the community on the project and the loan delivery processes. However, the close links between the technical partner and the loan groups proved to be a handicap, not an aide, to project implementation, as the end-users expected the project to subsidize finance and system costs. One village loan group expected the project to cover group formation costs and to greatly lower interest rates on their behalf. This very first step of the project ran into so much trouble that the partners had to threaten withdrawal of the proposed services. 4.17 The two Mt. Kenya groups were unsuccessful because of poor leadership and lack of focus on a specific activity that could hold the members together beyond the solar energy loans. However, the finance partner, K-REP, did not effectively coordinate loan group formation activities, and there was a breakdown in communication between the two parties. The reason for this low performance can be explained on two levels: 4.18 The field staff had not been adequately sensitized to the importance of the project as part of K-REP's research efforts to develop new products for micro finance services; and 4.19 Because the credit officers were already "overloaded" with their normal credit-supervision portfolio and with the small solar business loans, they found it difficult to create adequate time to attend to the new initiative, which by and large was considered risky. 4.20 Approach 2: K-REP-Selected Loan Group (Western Kenya). In Western Kenya, K-REP used a different approach to identify loan groups. K-REP field office staff, installation technicians,8 and solar companies were briefed on the project, and were requested to seek potential partner groups. This approach generated a favorable response as groups from different parts of the country put in applicaiions for assistance to install solar systems in their homes. Due to fund limitations, it was decided that an area with a high concentration of interest should be chosen. Five groups with 60 members were selected from among the many that applied from Bungoma District of Western Kenya. 4.21 In this stage, three groups were registered self-help groups composed of locally based teachers. These groups were well organized, with regular savings contributions and bank accounts, but without the rigid savings rules described in the project processes above. Two of the groups came together solely for the purpose of accessing solar loans and were unstructured, unregistered, and lacking in savings activities. 7 In fact, they had approached the technical partner to help them design a finance project. 8 These technicians approached the technical partner looking for credit schemes for PV systems. 20 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 4.22 Approach 3: CBK Pre-Formed Groups (Muranga and 01 Kalou). An advantage of the CBK program is that their loan groups are fully organized before the project begins. They are fully formed tea societies and dairy cooperatives (i.e., savings and cooperative credit organizations, or SACCOs) with memberships numbering in the thousands that have established management structures, constitutions, meeting schedules and bank accounts. They also have buildings and other assets. 4.23 In this case, there was no loan group formation process. The finance and technical partner spent several person-days with the SACCO leadership, and in general meetings. There was general enthusiasm for the product and the prices offered, and the groups quickly incorporated SHS loans into the package of loans that they already offered to their clients (the loan process is described in the next chapter). As mentioned before, a sign-up list was circulated that included a pre-qualification and SHS sizing sheet, and the available systems from the finance group were quickly applied for by SACCO members. This worked well for one SACCO. 4.24 For the other SACCO, local politics clouded the process and created delays. Maintaining group interest in the solar equipment package presented some difficulties: Timing: Rural people prefer to buy SHSs during the last quarter of the year. In other quarters, they have heavy financial loads (school fees, agricultural investments, etc.). Agriculture: A collapse in the Kenyan dairy market and Kenya Creameries Company caused immediate problems with the 01 Kalau group, a dairy cooperative. Personal politics: One of the more influential SACCO managers of the first SACCO was able to steer the project team away from the SACCO he manages after a number of systems were installed, to a SACCO in his home area. 5 The Loan Package 5.1 For the finance approach to work, loan recipients must be capable of taking on PV electricity system loans to be paid in 12-24 months. Loans for solar electric systems should be provided using existing the methodologies of finance institutions or loan groups. This manual outlines two finance approaches for PV systems that address the lighting and power needs of rural households with regular cash income, and small businesses with the potential to increase productivity with PV electricity. 5.2 The fmance system design should adopt an acceptable set of credit (and, if necessary, savings) policies and procedures. These should govern finance operations and management while at the same time safeguarding the interests of the group members, the group, and the finance partner by incorporating the principles of equity, sound economic practice, and flexibility. The system design should be regularly reviewed to take into account experience. 5.3 One financing method involved a participatory self-organized loan group guided by a successful micro-credit NGO, K-REP,9 whose approach has been shown to be successful in poverty alleviation on a wide scale. The other method used established savings and credit cooperatives (SACCOs, which provide loans to their members based on income from cash crop earnings) organized by a national cooperative bank, the Cooperative Bank of Kenya, Ltd. (CBK). In both cases, the project approached the financial institution with limited grant funds and requested them to on-loan funds to the rural loan groups using established practices. As described below, both approaches have their relative merits and disadvantages (see Table 5-1). 9 K-REP's objective is to develop appropriate financial products, services, and systems for the poor. Its capital stands at KSh 600 million and its rural portfolio at KSh 165 million; it has 8 mral branches and 159 employees. 21 22 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 5.4 Note that both rural loan groups and finance institutions must be fully involved and interested in the activity from the start. There is always the danger of the international "PV agenda" or "donor agenda" involving finance institutions in loans they would not ordinarily service or handle. 5.5 Neither K-REP nor CBK had previous experience funding PV technology. Initially this lack of awareness of PV technology among their management and field staff was a major hurdle to the project; often, rural customers were much more knowledgeable and interested in PV than the banks. This meant that there was a relatively long "gearing- up" process during which time the finance groups familiarized themselves with the technology and developed the confidence needed to put their resources behind it. Table 5-1. The Two Types of Loan Packages Cooperative Bank & K-REP SACCOs Down payment No 25% of loan Interest rate 18.5% About 12%; exact rate to be decided by SACCO Fees 0.5% insurance fee None. SACCO members 1% set up fee are already registered. passbook (KSh 100) membership (KSh 150) Loan term Max. two years Max. two years Loan amount Three types were offered (20, 40, and The same types were 60 Watt), ranging from KSh 32,000 to offered, but only the 60-watt 68,000. This included installation costs was selected. and pre-paid maintenance costs for 2 years. Requirements Savings: min. KSh 100/month Must be registered SACCO > 1 0% of loan member. The K-REP Program 5.6 The K-REP model combines provision of credit and loans with savings mobilization, in a system similar to the Grameen Bank in Bangladesh. Organized rural groups guarantee one another when taking loans, and their combined savings become a hedge against default. Credit policies provide directives for implementing and administering finance operations. The savings policies relate to group members savings obligations, while group policies outline the conditions and provisions for group membership. 5.7 The K-REP group-lending methodology has been applied to microenterprise development in many poverty-alleviation programs around the region. The approach accesses credit and other services to individuals through community groups. It has been successful because it reaches large numbers, realizes high loan collection rates, empowers the target group to actively take decisions that affect them, and generally contributes to an improvement in the living standard of the beneficiaries. It should be mentioned that, K- REP, up until the time of this work, had extended loans for businesses only and did not The Loan Package 23 have a consumer loan portfolio, so the SHS work was a completely new type of loan for them. 5.8 Ultimately, however, K-REP was convinced that PV could offer an alternative to stalled rural electrification programs, and agreed to participate in the project to gain experience with a new type of consumer loan using their standard participatory loan techniques. 5.9 K-REP used the following credit guidelines for solar loans: Eligibility: Eligibility for assistance is limited to the registered members only, through their groups that will have been approved by the finance partner. The members will be required to conform to the rules and regulations governing the activities of the registered group. For groups to be eligible to draw funding from the finance partner, they must have been registered with the finance partner for at least six months. The groups' financial status must also be sound and its savings account must have a balance of at least 10 percent of the requested loan amount. Loan application: Individual loan applications are submitted through their respective groups, which are responsible for assessing and approving appli6ations. The groups subsequently apply for funding from the finance partner. Loan assessment and approval: Loan requirements for each member will be determined by the group's constitution. The amount to be borrowed will be based on the cost of the system as determined in the design by the technical partner. The group will assess and approve all individual loans. Before approving any loan to a group the finance partner shall use its own method to verify the group's financial status, history, and reliability. Loan approval shall be subject to the fulfillment of the finance partner's requirements. Loan collateral: The group members' shares or savings within the group shall be used as collateral. The groups in turn should also have savings with the finance partner to be used as collateral. Loan disbursements: On approval, loans will be disbursed to the loan groups only after a loan agreement between the loan group and the finance partner has been duly executed. The finance partner will turn prepare payment checks to equipment suppliers/installers so that bulk supply arrangements can be effected. Loan size: The loan amount provided will depend on the size of the desired "standardized" system and the user's actual and proven ability to repay the required loan, as decided by the group. Service charges and fees: Loans to group members will attract a service charge or interest rate agreed on by the group but should reflect the interest 24 Implementation Manual: Financing Mechanisms for Solar Electric Equipment rates normally charged by the finance partner. For this project the rate was a flat 18.5 percent; after charging an insurance fee of 0.5 percent and an application fee of 1.0 percent, the total charge was 20 percent. (By comparison, commercial rates in Kenya range from 25 to 30 percent.) The finance partner will charge the loan group a reasonable interest rate, which should be reviewed from time to time to reflect cost recovery and project sustainability requirements. Loan repayment: Loan repayment will be remitted directly to the finance partner by the loan group. In cases where group members' payments come through the groups account (as in the pilot case), members' repayments are deducted and the lump sum amount submitted directly to the finance partner. Early repayment is allowed without penalties. Type and purpose of loan: In this scheme, loans will be exclusively be short-term (1-2 years) and will be provided to households and small businesses for the purpose of purchasing and installing solar electric systems for lighting, TV, radio and other possible applications related to the promotion of usage of solar technologies. Defaults: Defaults will be defined according to the finance partner's and the individual group's constitutions. In case of default in payment by the group, or if the group becomes insolvent before completion of loan repayment, the finance partner shall hold the individual members responsible. However, the loan group will be responsible as long as it exists and should deal with any defaulting individual according to the group's policy on defaults. Group members who fail to pay the default amount in full are required to repay the outstanding amount from their group savings. * Bad debts: Loan amounts that cannot be covered by members' savings may be considered bad debts by finance partner. The finance partner will then have to consider and discuss alternative means of recovering the debt, which will include repossessing the solar electric system as a last resort. Subsequent loans: Once a group member has successfully completed repaying a loan, she/he will qualify for a second loan for a system upgrade if so desired. (This will also depend on the number of group members interested in the upgrade). In all cases, the loan granting process will be repeated subject to availability of funds. Only those groups that maintain a 100 percent repayment rate throughout the loan period will qualify for second and subsequent loans. Box 5-1 (on the following two pages) describes K-REP's loan experience during the project. The Loan Package 25 The Cooperative Bank of Kenya Program 5.10 The Cooperative Bank of Kenya, Ltd., (CBK) adopted the following procedure for assessing and approving loans: The Cooperative Bank identifies a potential SACCO partner, based on its credit history, total number of members, and potential interest in participating in the solar pilot scheme A joint awareness meeting follows in which the technical partner, Cooperative Bank, and the SACCO members discuss the possibility of solar loans. In practice, these meetings were held to coincide with the annual general meetings of the SACCO. During these meetings, SHSs were demonstrated and explained to members, and system prices and options were given. If SACCO members agree that the SACCO should participate, the SACCO management pre-selects qualified applicants and forwards this list with an application for a solar loan from Cooperative Bank at the nearest Cooperative branch. The application is a short form that provides the necessary elements to detennine the size of the solar system * The Cooperative Bank branch appraises the SACCO after the application letter is received. If the SACCO qualifies, a letter of offer is sent to them detailing terms and conditions of loan. - iThe SACCO collects deposits (25 percent) from its members and forwards the check to the Cooperative Bank. 5.11 The SACCO signs a letter of offer and equipment is ordered and delivered. The Cooperative Bank procures the equipment and pays the suppliers. Installation procedures follow. Box 5-1. The K-REP Loan Experience Approach 1: Self-Selected K-REP Groups (Mt. Kenya) In the Mt. Kenya region, two groups were organized and registered between December 1996 and February 1997. One of them, however (the Tharaka-Nithii group), dropped out of the project after failing to come to an agreement with K-REP on loan terms. The second group (the Ukuu Village Group) initially accepted the K-REP terms, and loans (KSh 423,547) for 14 systems were disbursed to the group account. The group leaders were supposed to coordinate further disbursements to equipment suppliers and installation technicians, based on competitive quotations that the technical partner had organized. Unfortunately, once the funds were under their jurisdiction, the Ukuu Village Group reverted to earlier demands, and pressed for concessions on the loans from K-REP. These demands were that the financier (K-REP) should . waive the requirements on savings contributions and monthly group meetings; . reduce the interest rate on loans from the proposed 18.5 percent per annum to less than 10 percent p.a.; 26 Implementation Manual: Financing Mechanisms for Solar Electric Equipment . allow a loan to be given to each individual borrower, who would then choose the component supplier and installer without EAA intervention; and . give an assurance that the loans would be written off in the event of drought or famine. K-REP management rejected these conditions and recalled the loan in May 1997. K-REP policy is quite clear on negotiating loan terms with client groups, and there were a number of reasons why renegotiating was unacceptable, including the following: . A prospective borrower should not be allowed to set his/her own set of terms and conditions under which to borrow from a prospective lender. . There was an ongoing micro-enterprise development program in the area whose clients were already borrowing under the same terms and conditions, having fully accepted them as being fair enough. . To accept the demands from the prospective solar energy clients would have set a dangerous precedent for future lending operations. In fact, both of the above groups knew that the funds being disbursed were from a donor for a pilot solar project. Based on this knowledge, they tried to negotiate better terms for themselves. In addition, they were not sure how well the solar PV technologies worked and thought that they should get better terms because they were "guinea pigs." K-REP acted properly in rejecting the clients' changed demands. Acceding to the demands could have encouraged cheating, including diversion of funds to unrelated activities or taking shortcuts to avoid meeting the required quality standards in solar components and system installations and maintenance that were being promoted in the project. Clearly, for the Mt. Kenya farmers and teachers with access to other loan sources, 20 percent interest rates were too high. However, K-REP's failure to exercise flexibility in the initial stages of the effort proved quite costly in terms of wasted time and effort. When introducing new loan packages, there is a need for flexibility to determine what works and what does not, and to encourage local groups to feel local ownership of the project. Approach 2: K-REP-Selected Loan Group (Western Kenya) Five groups of teachers approached K-REP in Western Kenya to have solar lighting systems installed. These groups were less well organized than the Mt. Kenya group, and had also come together chiefly for the purpose of getting a solar lighting system. The first wave of 35 loan applicants from five groups were processed and loans were disbursed direct to equipment suppliers and the technical partner (the latter for provision of technical services) in December 1997, three months after reception of applications. System installations began between February and April 1998 and were subcontracted to two local installer companies. Upon delivery and pre-inspection of the equipment of the 35 systems, irregularities began to occur. The two companies were assigned different target groups for which to install and maintain systems. One company installed about 17 systems correctly. The other company started to install systems before contracts were signed between K-REP and the end-user. In addition, the latter company's systems were almost all installed incorrectly. In all, 26 systems were installed before the process was stopped. It took the two installer companies several months to sort out the differences between themselves, K-REP, and the customers. In the end (April 1999), K-REP gave the job of installing the nine remaining systems to the first installer. The Loan Package 27 As of December 31, 1999, 50 percent of the outstanding loan value had been repaid. Some 17 percent of the households had paid off early; 17 percent were on time with repayments; 17 percent were somewhat behind; 46 percent are in default; and 3 percent had their equipment repossessed. AJI loans were to be cleared by June 2000, but there is some doubt that this will happen. Problems encountered were the following: people refused to pay when their system malfunctioned; technicians failed to honor their commitment to provide maintenance services over the two years of the loan repayment; and technicians failed to respond to customer requests for assistance. Finally, loan repayment seemed to be taken less seriously over time. Observations Developing Financing Mechanisms 5.12 Adapting the loan packages required significant resources that had to be budgeted for. This was so despite the fact that the financial institution had considerable experience in applying such loan packages for other purposes. Training of field officers, management, and technicians needs to be taken into account and factored into cost calculations (be they project or commercial). Coordination between Technical Partner, Finance Partner, and Loan Groups 5.13 Each partner has different organizational priorities and different levels of bureaucracy. Finance partners usually have a fairly large internal bureaucratic system in place, which means that they cannot always react quickly to demands from other project partners. The loan groups have their daily tasks to worry about for survival, and cannot always schedule a general meeting during the working hours of the financing partner. In reality, much of the coordination was born by the technical partner. Scale Economies from Bulk Purchase 5.14 The procurement of SHSs for a group of 40 beneficiaries took some time to organize because of the tendering process, but the resulting savings were considerable (See Annex A for more details) and could reach 20 percent or more. These savings can be used to offset the cost of finance, and to purchase higher quality equipment than would have been possible without a loan. Business Loans for Solar Enterprises 5.15 A lack of modern energy is seen as a barrier to development, and the productive use of energy is often considered a priority for rural development. However, loans to "solar" businesses that use the energy for productive purposes are perceived as risky by conventional banks. The project attempted, as did several parallel efforts financed by the same donors, to develop a line of solar business loans in conjunction with local finance groups. Note that solar electricity is not economically viable for energy-intensive 28 Implementation Manual: Financing Mechanisms for Solar Electric Equipment tasks such as milling and welding. The loans successfully disseminated in this effort were provided to enterprises that use electricity for such non-intensive uses as rural entertainment, battery charging, and lighting, or to enterprises that sold PV products themselves (see Table 5-1). The objective of this activity is to assess whether such loans are indeed sustainable, and whether they could have a positive impact on the micro enterprises involved in solar business. 5.16 During the course of this project, eight loans were issued to businesses engaged in solar activities (see Table 5-2). Two of these loans were issued by EAA as part of an overall ESMAP/Ashden Trust-funded activity; five others were issued by Kenya Rural Enterprise Programme using funds provided for this purpose by the Ashden Trust; and one was issued as part of the Cooperative Bank SHS loans (the bank was unaware that the loan was not for a SHS but for a business). All of the loan recipients required constant technical back-up from EAA. 5.17 The five K-REP business loans were issued within the organization's normal loan procedures (1 8-20-percent interest rates, security, full assessment process). By the time five loans (valued at about $21,000) were issued, a further eight applicants had applied for loans (worth $50,000; see Table 5-2). Of the first five loans, four were paid on time and one paid late. Since K-REP split into a bank and an NGO, it featured solar loans as a regular item in its lending program. 5.18 The two EAA loans were non-commercial in nature, as they were offered for rural ventures that were new, untested, and risky. The loan offered in Kenya was tendered to about 15 organizations working in PV, and was awarded to the organization with the best proposal (Bright Home Solar Energy in the Kisumu district). Bright Home Solar Energy set up a solar service center that served as a PV sales outlet, a solar battery charging station, and a video-cinema (in addition to a pre-existing photo studio). The loan proved that a PV-powered enterprise in a rural area can be a commercial success; despite the fact that loan repayments to EAA have been temporarily behind schedule, the loan is being fully paid back. 5.19 The second loan was offered in Kasese, Uganda, to an enterprise to start a battery-charging station and to sell and install PV systems. Due to the deteriorating security situation in Kasese, the enterprise stopped operating and can no longer service the loan. The Loan Package 29 Table 5-2. Business Loans for Solar Enterprises Borrower Details of Loan Loan Description Loan Impact Birdsnest K-REP Manufacturer of 12V DC Completed loan Nov 1997. Intercontinental Amount: Ksh 150,000 fluorescent ballasts. Applied for follow-up loan Agencies, Ltd. Date: August 1996 Requested loan for and is now on 3rd follow-up (Nairobi) Term: 12 months improving production line. loan. Interest rate:18.5% p.a. Company still in business. Fence Electrics, Ltd. K-REP To set up solar marketing Business was not successful. (Kajiado) Amount: Ksh 200,000 and promotion activities. Entrepreneur concentrated Date: Sept 1996 Develop increased market on other business interests. Term: 27 months for solar equipment and Loan had not been repaid as Interest rate:18.5% p.a. appliances. of October 1997. Windmills and Solar K-REP Manufacturer of 12VDC Payment completed by Energy (Nairobi) Amount: Ksh 250,000 fluorescent lamp ballasts November 1997. Date: October 1996 and fixture. Requested loan Business split into 2 Term: 27 months for improving production companies soon after Interest rate:18.5% p.a. line. repayment Kiru Electric and K-REP Rural supplier of SHS Payrhents up-to-date as of Solar Services Amount: Ksh 200,000 requested loan to intensify October 1997. Repayments (Tharaka-Nithii) Date: October 1996 marketing of PV through of loan put strain on business Term: 27 months stocking of quality PV during poor harvest. Interest rate:18.5% p.a. accessories. Solagen, Ltd. K-REP Retail distributor of PV Payments up to date; has (Nairobi) Amount: Ksh 500,000 equipment requested loan expanded the range of Date: July 1997 to consolidate market equipment in his shops. Term: 15 months network. Interest rate:20% p.a. Bright Home Solar EAA Experimental non- Solar business and charging Energy (Bungoma) Amount: KSh 600,000 commercial loan to set up station in operation. Business Date: January 1998 solar business and battery- 5 months behind on Term: 12 months charging station in rural repayments due to slow Interest rate: 0% village. sales activities. Bwera Solar EAA/Ashden Trust Loan to set up a solar Loan repayments stopped. Services Amount: US$8000 business and battery- Loan defaulted due to war in Kasese Uganda Date: June 1997 charging station in rural market area (rebel activity Term: 12 months village. caused total cessation of Interest rate: 10% business) ??? Cooperative Bank Loan for PV system to Loan repaid on time. Muranga Amount: KSh 60,000 power lights, TV, and music Business wants to expand Date: May 1998 system for rural bar and system with second loan. Term: 24 months shop. Loan was applied for Interest rate: 12% as part of SHS package from Muranga. 5.20 A $5 million IFC/GEF project (Photovoltaic Market Transformation Initiative, or PVMTI) has been under preparation for the past three years. Several project proposals have been received and are being reviewed. Three of the approved first-track projects are moving forward, all with the finance model outlined in this manual. One consortium, Muramati/ASP Solar, is in fact using one of the communities that benefited from ESMAP assistance. The BP/Solagen consortium has used the implementation manual in its development, and Marathon Marketing is using the implementation manual as a 30 Implementation Manual: Financing Mechanisms for Solar Electric Equipment blueprint for a program it is developing with a South African company (Total Solar). The concept of solar electricity is now well known within the SACCO community in Kenya. In short, the ESMAP pilot activity prepared the way for PVMTI. Although PVMTI will take time to become operational, it is expected that more than 500 solar home systems will be financed using mechanisms developed under the ESMAP activity. 6 The Technical Package 6.1 This chapter discusses the lessons learned from designing and implementing the technical packages that were dealt with under the financing mechanisms. 6.2 Solar electricity systems need to be designed to meet the needs of the end-users, be they lights, radio, TV, for lighting, other possible applications. Several "standard" packages should be prepared to cover a range of would-be user's needs and to simplify procurement. System upgrade and expansion packages should also be offered. The focus should be on quality and functionality. Systems should not be user-serviceable, and the battery and control should be enclosed and locked to prevent user bypass of the charge regulator (a common occurrence in Kenya). Preventive maintenance and monitoring of the systems should be built-in during at least the first two years, before the loans have been fully repaid. This will raise awareness among the users, who may opt to buy additional maintenance contracts later on. A selected group of suppliers and installers should be identified through a tender to introduce and implement the equipment that will be financed through the financing mechanism. 6.3 Financing will leverage better design, installation, and maintenance practices because it will allow users to procure higher-quality service without necessarily straining their budgets. Loans will only be extended to those individuals who agree to abide by the standards incorporated in the financing package. 6.4 The technical package provided here, combined with end-users' education, will address the technical problems raised previously. Further, inspections and service contracts will ensure that quality is maintained. In addition, all systems will be installed according to the minimum installation code in Annex D. Systems Design 6.5 If systems fail, it is probably for the following reasons: non-use of charge regulators, poor design and installation, poor component and BOS quality, or poor-quality batteries. This section briefly clarifies these issues and outlines the technical solutions to be used. 31 32 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Non-use of Charge Regulators 6.6 This causes chronic deep-discharge of batteries, which shortens battery life significantly, decreasing financial viability of PV home systems. The main reason end-users do not use charge regulators is the high prices of units and lack of understanding of their function. Charge controllers shall be used in all systems installed under the loan scheme. Poor Design and Installation 6.7 Uninformed customers and untrairied technicians commonly install systems that have been undersized (i.e., the daily load is higher than the capacity of the module to generate energy), poorly designed, and/or badly installed (many systems are installed with improper wire sizing, poor module placement, and poor electrical connections). This compounds the problems caused by non-use of charge regulators and shortens the life of fluorescent lights. The technical partner will ensure better design, installation, and maintenance practice under the loan scheme, and the costs for this will be factored in the price of the systems and included in the loans. Poor Component and BOS Quality 6.8 Because end-users cannot afford cash for quality equipment, they buy the cheapest possible, and this is often of poor quality. For the same reason they often leave out charge controllers. Component mismatch is a common occurrence, as are poor quality (cheap locally assembled lights). Only quality equipment will be procured and used in the project. Component mismatch will be adequately addressed. Batteries 6.9 Batteries are often blamed for the technical problems of SHS. More often than not, this is a symptom instead of the cause. The aforementioned four reasons could all result in premature battery failure. However, poor quality batteries can be a reason for system failure in itself, in particular if non-modified car batteries are used. Systems to be used within this effort will optimize the cycle life of batteries by making sure they remain in a state of charge above 50 percent. The battery and charge regulator are to be isolated in a locked box to prevent user access. Until the user has completed payment, only the contracted service person(s), or an appointed service technician of the credit group, will have keys to the box. This will prevent the end-user from bypassing the low-voltage disconnect of the charge regulator. 6.10 For the 12-volt systems (the most common), the charge regulator will have its low-voltage disconnect set at about 50 percent state of charge (11.8 volts). This is to economically optimize the life of the battery that should have a cycling life of about 600- 1200 cycles, or 2-4 years. Charge regulators chosen should have some system indication, such as LED (light emitting diode) warning lights that enable the end-user to gauge when the system is low on energy and when it is about to disconnect. The Technical Package 33 Mounting 6.11 Improper mounting of PV modules is also a common problem. All PV modules within the scheme will be mounted properly (with the tilt in a North-South orientation). The technical partner will recommend several types of mounts and provide designs and prototypes, as well as standard mounting orientation advice. Wiring 6.12 Self-installed systems and those installed by untrained technicians usually result in the use of improper wire sizes and types compounded with long wire runs. Proper wire sizes will be used in the project. The technical partner will provide guidelines for all systems. Guarantees on Components 6.13 Over-the-counter sales do not always carry guarantees. The tender will specify reasonable warrantees on all components to ensure that the equipment lasts beyond the period of the loan. Users will be provided with guidelines within which all system packages are designed to work. Equipment Approval and Selection 6.14 Major system components (batteries, lamps, charge regulators and modules) will be accepted based on prepared criteria such as those presented in Annex D. These criteria will be circulated to companies before equipment is bid for. The project will have minimum warranties of two years on all equipment, except batteries. Criteria will be loosely based on established guidelines as laid out by the "Universal Technical Standards for Solar Home Systems." Other standards may be used; see Annex B for standards applied during a UNDP/GEF-financed project in Zimbabwe. 6.15 To encourage local involvement and job creation, battery boxes and module mounts will be made within the project areas. The technical partner, with support of the loan group, will select artisans and ensure that they are trained to meet the quality requirements of the project. Suppliers and Installer Selection 6.16 For the project to be successful, two things must happen. First, the supplier will be required to have the capacity to supply (including delivery to the loan group) the equipment bid for. The equipment will be expected to "perform as advertised" and must meet all conditions established in the tender document. 6.17 Second, the installer, who usually is a local technician, will be required to correctly install the systems according to the minimum standards (see Annex D) while exhibiting a high degree of competence. If awarded the maintenance contract, he/she will be required to further maintain the systems in the best state possible following the 34 Implementation Manual: Financing Mechanisms for Solar Electric Equipment maintenance schedule applied under the project. The installer(s) must be technically qualified to do the work-i.e., must be trained and certified. In addition, she/he must have proper equipment and tools; based reasonably close to the community receiving the systems, and have the means to make regular visits; and accepted by the customers. Systems Installation 6.18 The installation phase needs to be properly organized. The following procedure is recommended. Delivery 6.19 Delivery of project equipment will be to the loan group, which will be responsible for making prior arrangements to store the equipment in a secure place. 6.20 On delivery, an official of the loan group, together with the installer and/or a person nominated by the technical partner, will inspect the equipment to verify that the correct equipment has been supplied. The group officials will then acknowledge delivery in writing for purposes of payment. Payment to suppliers will be done as agreed by the finance partner and quoted on the invoice(s). 6.21 Minor system components will be supplied by the installer and shall be inspected before installation. Pre-installation Inspection 6.22 Pre-installation inspection will be carried out before systems are installed in "waves" of between 10 and 20 or larger numbers, depending on the capacity of the installation team. Before commencing installations, the technical partner will conduct a pre-installation inspection to ensure that only the correct equipment is used. The following will be examined: The installation team's quality and type of tools to be used for installation; The quality and type of cables, switches, sockets etc. supplied by the installer; and * The installation team's knowledge and ability to carry out the work. Installation 6.23 Installation will only be carried out by qualified technicians. With the very first installation, training will be conducted by the technical partner to familiarize the installers with the special needs of the financed systems. A thorough drill on the minimum installation code and practice will be conducted at the time. The installers will also be trained in end-user education, among other things. Loan group members will be included in the installer training. A training fee will be levied on all systems installed to cover the training costs. The Technical Package 35 6.24 Only those trainees who successfully complete the training and pass the course will be certified to install and service systems within the project. Once the technical partner establishes that the installers can carry out the job satisfactorily, they will be left on their own to carry out the installations and educate the end-users on basic the operation of their system. 6.25 On completion of each installation, the installer is required to fill out a job completion or system certification form (See Annex G). The form must be countersigned by the system owner. I 6.26 Installation fees to technicians will be paid in two 50-percent installments, the first before installation and the second on passing inspection. User Training 6.27 User training will involve basic lessons in charge control indicators, availability of power according to system size, energy management, and maintenance of system components. The training will also cover the "do's and don'ts" and will be adequately tied to the end-user contract (see Annex E). Leaflets will be provided, preferably in the local dialect, the national language, and English (French, Spanish, etc. may also be used depending on the region). The training will be conducted by the installer. Inspection 6.28 Every installed system will be inspected according to criteria established within the project standards and according to the format of the system inspection sheet (see Annex H). All systems will be inspected before the final payment is made to the installer. The inspection will be conducted by the technical partner, although it is expected that at some point the loan group will nominate a capable individual to be trained by the technical partner as an inspector. 6.29 In the event of a system failing to pass the inspection, the installer will be asked to rectify all installation faults before payment can be made. Maintenance 6.30 To prevent non-payment or abuse of the system by customers, systems will be maintained by service contractors over the period of the loan. End-users will be obligated to adhere to the terms of the users maintenance contract. Priority in awarding service contracts will be given to the installation companies that installed the systems. 6.31 The maintenance service contract will include the following: Three mandatory service visits in two years, one in the first and two in the second (see Annex G, the sample user service contract, for details); 36 Implementation Manual: Financing Mechanisms for Solar Electric Equipment One bonus service trip; and * Call maintenance trip(s) to be paid for by the end-user. 6.32 Service dates will be arranged between the companies and the loan groups, and a copy of the service schedule provided to the technical partner. A service form (Annex I) will be completed and signed by household and service provider on each service trip. Payment for maintenance service will be made to the technician by the loan group or financial partner (whichever is appropriate) on presentation of signed service forms. Security 6.33 Security of the system will be the sole responsibility of the system owner. It should be suggested that a nominal amount in the member's or group's savings be allocated to pay for insurance against theft. Repairs 6.34 Any user-caused problem will be rectified by the service company at the end-user's expense and at a price agreed on by the company and customer. Complaints will be handled by the loan group together with the project technical partner as referee if necessary. Monitoring 6.35 For the purposes of evaluation and recommendation, the technical partner will from time to time monitor the performance of the systems. A random sample of the systems will be monitored and recommendations made to equipment manufacturers, installers, and end-users. Experiences arising from this will be documented to provide "good practice" information for those wishing to replicate the scheme. Hand-over 6.36 After all loan payments are made, the end-user will be given the keys to the battery box and will henceforth be directly responsible for maintaining the system. At their own disposition, they can extend the service contract. Disclaimer 6.37 Neither the loan group, the installer, nor the technical partner will in any way whatsoever be liable for damage to property and/or injury to health of persons arising from improper use of the solar electric system. 7 Lessons Learned 7.1 End-users appreciated the opportunity of buying into a scheme to finance a SHS, as most cannot currently afford to buy one with cash. Their early involvement in the process was crucial. Overall, they were satisfied with the process, even though it was not always easy (the path to a final agreement between credit groups and the financial institutions was particularly slow. Clearly, the benefits of having electricity made them forget the difficulties during the start-up period of the project. 7.2 They are willing to pay interest charges, although the level is limited to what they have access to for other purposes. For example, they find unacceptable the prevailing commercial market interest rates of 25-30 percent per annum. K-REP, which was able to offer loans at 20 percent, found takers. However, in areas where cooperatives or SACCOs exist, people do not want to pay much more than what these offer, usually around 12-14 percent. It is clear that some sort of supported loan scheme is required if one wants to finance SHSs, but the level of support should not create large differences with existing opportunities available to clients (for other purposes, such as agricultural loans, housing loans, etc). 7.3 The credit mechanisms tested here all deal with groups of individuals, instead of directly with individuals. It was demonstrated that procurement of equipment for groups of about 30 could lower SHS cost (installed cost, including maintenance contract) by as much as 20 percent, thus offsetting the costs of borrowing money. The experience shows that it is easier to deal with existing credit groups (such as through cooperatives/SACCOs) than with the credit groups created for this purpose. Hcowever, concentrating only on cooperatives would severely limit the replicability: not all households are members of such organizations. Using Teacher Associations (etc.) is a variation on the same theme; they would also be relatively easy to use, particularly if they would allow automatic loan payments through salary deductions. Dealer (or installer) credit schemes took somewhat longer to realize, but once the practices were established, the dealer wanted to launch new operations. 7.4 One option that was not pursued is hire-purchase, which is just a slightly different version from the dealer credit. Fee-for-service was rejected because: (1) no ESCO 37 38 Implementation Manual: Financing Mechanisms for Solar Electric Equipment or financing group was willing to take the risk of supplying systems that could be stolen, (2) fee-for-service costs were too high for the small number of systems to be provided, and (3) customers prefer to own their systems. 7.5 Selection of the credit groups to work with should, to the extent possible, be disconnected from local politics. This can be done by providing clear and transparent guidelines and by issuing pre-selection criteria. 7.6 The financial institutions found it more difficult than expected to implement the financing mechanisms for solar equipment, even though these were based on existing mechanisms that they regularly apply for other purposes. One reason was that the loans for SHS are consumer loans; they are not the loans for productive purposes that the institutions normally offer. Another reason was that interaction with the groups was somewhat cumbersome: beneficiaries also are not used to consumer loans, and this needed some reinforcement. Both institutions eventually fully subscribed to the concept of rural electrification through SHS to improve rural living conditions, although the managers of the research units initially found some difficulties to convince their management to launch the pilot activities and gain more experience. Finding resources to properly support the pilot activities during the testing period proved to be somewhat difficult. The current experience clearly demonstrates the value of pilot projects. Both institutions would have found great difficulties to successfully offer solar financing mechanisms on a large scale without the pilot phase made possible through the ESMAP project. 7.7 The fact is that both financing institutions are leaders in their fields, and have considerable donor funds-on a grant basis-to develop new initiatives. It stretches their capacity to carry out many activities simultaneously. Although the ESMAP project provided a total of about $65,000 in two tranches to the two institutions, this was fairly small in comparison to their normal level of operations, which may have reduced their effectiveness. This was compounded by the fact that ESMAP did not provide many resources for the functioning of the financial institutions, in view of addressing sustainability from the start. 7.8 Technical assistance (TA) proved indispensable, and it should be made available over a longer period. It was the "glue" that kept the different actors together and more or less on the agreed track. The TA was helpful in selecting the beneficiaries and holding early discussions with them; in developing standard packages acceptable for the beneficiaries' needs and payment ability; in procuring the equipment on behalf of the credit groups; in training of the local installers; in inspecting the installed SHSs; and in creating a mechanism and capacity to maintain and service the systems. The financial institutions expected too much from the TA, and relied heavily on it even for carrying out some of their own responsibilities. It is possible that this practice is a spillover from the easy access to many donor-funded activities that rely heavily on outside consultants. 7.9 Maintenance of SHSs has often been a problem. Even though not much maintenance is required, a certain number of checks need to be carried out at certain times. In the pilot project, this was built in: the purchase price of the SHS included the cost of The Technical Package 39 three scheduled maintenance visits and one unscheduled visit over a two-year period. So far, most equipment functions as designed, and the most frequent problem is the blackening of lamps due to the relatively low quality of the locally produced ballasts as well as quality control problems with the international supplier. Beneficiaries have accepted the fact that they cannot access their batteries (these are in an enclosed box), and less than five percent have tried to temper with the locks. 7.10 K-REP's solar business loans are fully "mainstreamed" now. There appears to be a substantial demand for small loans ($1,000-10,000) in the energy enterprise business. Repayment of the few business loans that were provided under the pilot activities was satisfactory. These companies are all still in business (except one), and most have benefited from the loans in the sense that they are now more productive. Some also requested (and obtained) follow-up loans. Once K-REP split into a commercial bank and an NGO, the commercial bank included solar loans in its regular loan portfolio. K-REP intends to pursue the idea of creating a "solar bank" as soon as it is confident that the consumer loans can be handled adequately. 7.11 The solar-loan learning curve for K-REP and CBK has been steep. Both feel they still need some technical and financial assistance before the loan handling is given over from the research department to the regular operational department. 7.12 7. Interference beyond control of the partners can wreak havoc with the process, and there are quite a few events that may undermine households' ability to meet their payments: a serious draught; a recession or collapse of an industry; unforeseen insecurity in an area (rebel activities or a war); local politics, etc. In addition, interference from anticipated large donor-financed projects also upsets the players. This was the case in Kenya, where a $5 million solar project has been under preparation for more than years. 7.13 8. Private companies have been eager to cooperate with this type of effort. Despite delays and constant communication problems, the companies maintained their interest in the effort and happily sorted out small problems to do with- product quality control. They also used the project to monitor and adapt their product to customer needs. 7.14 Village-level installers played a key role. Because wholesale prices were handed over to customers, the installers were able to charge fair installation and maintenance fees and to maintain a steady cash flow over a long period. I Annex A Sample Solar System Packages System 1: Two-light system and a radio socket Item Type/Size Qty Module monocrystalline 12Wp 2 Charge controller SPCC 10 1 Lamp PL9 2 Spare tubes 1 Battery 6EL70 70AH 1 Cable & Accessories 2.5mm 30m Cable 4.0mm lOm Battery Box& Lock 1 1 Voltage Converter 1 1 Battery Terminals Ordinary 1 pair Wire clips & tacks 1 Switches 2 Sockets & Plug 1 Fuses Fuse Card 1 Connector strips . I Junction box 2 Main switch 15A I Module mount 1 Distilled water 1 Installation/Transport 1 Inspection & Maintenance 2 years 3 TOTAL A-1 A-2 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Graphic Presentation of System 1 I2VWP MODULES AX ~~~~~~~~~~~~~~~~~~~~~~~.......... .............. .. -. - - USTOMER RADI Annex A: Sample Solar System Packages A-3 System 2: Four--light system, a radio, and TV socket Item Type/Size Qty Module MSX 40 1 Battery 6EL100 100AH 1 Charge controller SPCC 10 1 Lamp PL9 4 Spare tubes 2 Cable & Accessories 2.5mm 60m Cable 4.0mm lOm Battery Box & Lock for one 1 Voltage Converter DC 1 Battery Terminals Ordinary 1 pair Wire clips & tacks 1 Switches 4 Sockets & Plug 2 Fuses Fuse Card 1 Connector strips 15A/30A 2 Junction box 3 Main switch 30A 1 Module mount 1 Distilled water 1 Installation/Transport 1 Inspection & Maintenance 2 years 3 TOTAL Graphic Presentation of System 2 ...........- . . LAMP No I LAMP No 2 9,,,, @ @ .ontroller LAMP NC 3 fj Battery char U Battery low LAMP No4 S..@@ Y =. CUSTOMER'S RADIO 40 WYP MODULES O 0 Batter CUSTOMER1S TV .. . .3... . .. . . A-4 Implementation Manual: Financing Mechanisms for Solar Electric Equipment System 3: Six-light system, radio, and TV socket Item Type/Size Qty Module MSX 60 1 Battery 6EL100 1 1 OOAH Charge controller SPCC 16 1 Lamp PL9 6 Spare tubes 2 Cable & Accessories 2.5mm I OOm Cable 4.0mm lOm Battery Box & Lock for one 1 Voltage Converter DC 1 Battery Terminals Ordinary 1 pair Wire clips & tacks 1 Switches 6 Sockets & Plug 2 Fuses Fuse Card 1 Connector strips 1 5A/30A 3 Junction box 4 Main switch 30A 1 Module mount 1 Distilled water 1 Installation/Transport 1 Inspection & Maintenance 2 years 3 TOTAL Graphic Presentation of System 3 ........ ~~~~~~~~~~~~~~~LAMP N0 l LAMP N- 2 LAMP N' 3 Battery char ~~~~LAMP N' 4 lo e @0.@ j Battery low LAMP N 5 .1I4 LAMPN6 60 WP MODULES CUSTOMER'S RADIO -:-.-.-- - - - --C---USTOM TV - - - . . . CUSTOMER'S TV/ L-M Z Annex B Draft Component Standards (Adapted from the Zimbabwe GEF Solar Home Lighting Project and Botswana Technology Centre Standards) The following specifications have been developed for small domestic (60 Wp and less) lighting systems with an expected load current of 8 amps or less during operation. The standards are designed to enable users to get high quality, reliable solar systems at the lowest possible cost, and to insure that their systems batteries and appliances last well with small lighting systems similar to the ones being offered by this project. The component standards will be enforced through agreements with equipment suppliers. Installation standards will be enforced through strict inspections by the technical partner. The installation inspection and service visit forms are attached. 1. Solar Cell Modules Modules 20 Wp and above: All modules must be guaranteed for at least 10 years against faulty workmanship, factory defects and power losses of more than 10 percent of their original rating. Modules rated at 20 Wp and above must meet the ISPRA CEC 503 specification (or its equivalent). Modules below 20 Wp: All modules must be guaranteed for at least 5 years against faulty workmanship, factory defects and power losses of more than 10 percent of the original rating. All crystalline modules must have 32 or more cells. All modules must be clearly marked with the manufacturers, model number, serial number and peak watt rating. 2. Batteries All batteries shall have a warranty against factory defects of at least one year. Battery capacity must be rated at the 20-hour rate, discharge to 1.75 volts per cell at 25°C Batteries must be clearly labeled with the manufacturers name, model number, and date of manufacture. Manufacturers hall, if possible provide discharge curves and cycle life data on batteries supplied within the project. A-5 A-6 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Solar-designed batteries are to be used wherever possible. Automotive batteries will not be acceptable, as they are likely to have a low life in PV systems. The technical partner shall be provided with details of all batteries to be used in the project. 3. Charge Controllers A charge controller is required on all systems. All charge controllers shall have warranty of at least two (2) years and shall provide the warranty in writing to the customer. Low voltage discount should be set at 11.9-12.0 volts (open circuit battery voltage). Voltage reconnect on charge controllers is to be set at 12.7V (on charge) Over-voltage protection shall disconnect charge controllers at a minimum of 14.2 volts (on charge) User interface. Regulators shall have LEDs to notify the user when the battery voltage is low (i.e., disconnection). Charge controllers shall have a self-consumption of more than 10 percent (including on standby mode) of the total energy produced by the module. 4. Lamps Only fluorescent-type lamps-or other efficient light fixtures recommended by the technical partner-shall be used. All lamps shall have a warranty of at least two (2) year and shall provide the warranty in writing to the customer. All lamps shall be reverse- polarity protected All lamps shall be protected against insect intrusion into the inverter housing. Larnps designs shall minimize radio reference. Annex C Sample Installation & Service Contract Between Installer and Loan Group/Finance Partner This contract is entered into between installer of P.O Box .................................... (henceforth known as the installer) and Loan group /finance partner, of P.O Box .......................... (henceforth called the contractor). 1. The installer shall carry out all installation work according to standards and within the time limit set by the contractor. Only the recommended system components shall be installed according to the installation code in Annex D. 2. The installer shall carry out three (3) maintenance service visits over the contract period (two years) to maintain the system and make sure that it is in good working order and will be obliged to fill in the maintenance service forms which will in turn be submitted to the contractor. The visits shall be scheduled in advance with the system owner. The installer has the right to charge for unscheduled service calls. 3. Payments for installation shall be made in two (2) equal installments. The first at the start and the second on successful completion of the installation work as found satisfactory by the client. Further payments for maintenance shall be made to the installers on presentation of completed service form duly signed by the system owners. In case of any doubts, the contractor has the right to seek confirmation. 4. Payrnent for maintenance service shall be made on presentation of signed service forms. 5. All payments shall be made by the contractor to the installer by bankers cheque. 6. In the event of the installer failing to fulfil the terms and conditions of the installation contract according to the installation standards agreed on, the remaining payment shall be withheld until satisfactory remedies will have been made. Part of the down payment may also be recalled. 7. If the installer sees evidence of the system tampering with the system he shall report in writing to the contractor. 8. If any component of the system under warranty fails, the installer shall contact the contractor to assist in the replacement of the unit. A-7 A-8 Implementation Manual: Financing Mechanisms for Solar Electric Equipment I hereby enter into this agreement with the full knowledge of the obligations and responsibilities it entails, and agree to honour this binding contract to the best of my abilities. Installer, Date Loan Group, Date Annex D Sample Solar Electric Systems: Minimum Installation Code 1. Cables: All cables shall be multi-stranded copper conductors. The minimum acceptable cross-section of wire in all sub-circuits shall be 2.5 mm2. Single stranded wires shall not be accepted. 2. Current capacity: The maximum rated current of a circuit shall not exceed the capacity of the over-current protection device in that circuit. 3. Voltage drop: The voltage drop in cables between the PV array and the regulator shall not exceed 0.24 V (2 percent of the nominal voltage) at maximum rated array current. The voltage drop between the charge regulator and all the loads shall not exceed 0.6 V (5 percent of the nominal battery voltage). The voltages and voltage drops shall be measured with all loads in the circuit switched on. 4. Colour code: The following conventions shall be used for two-conductor DC wiring. positive: red, negative: black 5. Connections and junction boxes: Cables shall be joined using junction boxes or block connectors. All cable joints shall be contained within a suitable junction box or enclosure, which is drip and dust proof and electrically insulated. Electrical tape shall not be accepted. All electrical connections shall be tight and properly insulated. 6. Fuses: Fuses shall be selected so that the maximum current does not exceed 80 percent of the rated capacity of the fuse. The fuses shall be installed in the positive line. In addition, the fuses shall be of a widely available type. Spare fuses shall be provided. 7. Switches: The number of switches shall be equal to the number of lights as indicated in the design circuits. All switches shall be surface mounted and secured to the walls at a height of 1.5 m above the finished floor. All switches shall indicate their ON/OFF state clearly and should be specifically adapted for dc current or rated at not less than 1OA if conventional 240 VAC products are used. In mud walls switches shall be mounted on wooden boards. 8. Sockets: Only standard DC sockets shall be used in all installations. No other sockets will be acceptable. A-9 A-10 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 9. Wiring and cabling: Surface mounted cabling shall be installed using appropriate fasteners at suitable intervals to prevent sagging (25 cm for clips). Visible interior cabling shall be aesthetically tidy, and shall not slant from the vertical or horizontal unless unavoidable. In mud-walled houses, cables lights and sockets shall be fastened to secure and firm timber works. Holes through roofing materials shall be avoided wherever possible. If any, then such holes shall be sealed with a weatherproof seal to prevent leakage. Wires running through holes in the roof shall be protected by grommets against possible damage from sharp edges. 10. Batteries: Battery interconnections shall be made using appropriate terminal blocks. Wiring on the terminals shall be secure. If possible soldering should be used to fasten the wires to the terminal blocks. The terminals shall be clean and tightly fastened. 1 1. Battery box: The solar battery and the charge controller shall be locked inside a wooden box, which shall be accessible, by the installer(s). This is to insure that the battery is not misused. The battery box shall in turn be located in a well ventilated and access restricted place. However, the charge regulator indicators shall still be made visible. 12. PV array mount: The module mount shall be made of steel, painted with a rustproof coating and roof mounted. The mounting shall be such that minimum damage will be done to the roof. All holes resulting from this exercise shall be appropriately sealed with a weatherproof seal to prevent leakage. The panels shall be mounted at an elevation of between 1O and 150 facing either north or south only depending on the location. 13. Spares: Spare parts shall be provided by the installation company to customer. These shall include at least one (1) spare bulb, fuses or fuse wire and distilled water. 14. End user education: The end user shall be adequately trained on the minimum basic working and maintenance of the installed system during or immediately after the installation exercise. Annex E Sample User Service Contract (U 1) This contract is entered into between the appointed solar installation and maintenance company, herein referred to as the "installer," and the recipient of the solar loan, herein referred to as the "client." This Contract is entered into between the above parties for the purpose of ensuring the solar lighting system will have a long and useful life. 1. The solar battery and charge controller shall be locked inside a wooden box which shall only be accessible by the service company and, in the case of emergency or loss of keys, by the cooperative society. This is to insure that the battery is not misused and to lengthen the life of the system. 2. The client shall be responsible for (a) cleaning the module, (b) changing the lamps when they wear out, and (c) operating the system in a responsible manner. 3. The service company shall have the responsibility of maintaining and servicing the client's solar lighting system for an initial period of two (2) years. If the client so desires, he/she can extend the period of the contract. 4. Over the contract period, the service company shall visit the client a minimum of 3 times (at least once every six months from the time of installation) to maintain the system and make sure that it is in good working order. These visits shall be scheduled in advance with the cooperative society and/or client. 5. In addition to the above three service visits, the service company shall visit the system one (1) time, in response to a customer service request. On any other visit, the service company has the right to charge for unscheduled service calls. 6. A system service form will be filled in triplicate (copy to loan group, company and technical partner) by the service company on each service trip, and signed by the end-user. This form (copy attached) shall be used by the technical partner to evaluate system performance. During the trips the service company shall: (a) clean and top the battery, (b) check for bad cells, (c) clean and check output of the module, (d) check the status of the charge controller and appliances, (e) check the wiring and fuses, and (f) review the system performance with the client. 7. Payments to the service company will be made by the loan group for all of the systems. The first shall be upon installation of the system. Subsequent payments will be made after each round of maintenance. A-1I A-12 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 8. If the service company sees evidence of client tampering with the system, he/she shall report this in writing to the loan group and the technical partner. 9. If any component of the system under warranty fails,' the service company shall contact the technical partner to assist in the replacement of the unit. 10. At the end of the loan period (two years), the service company shall hand over the keys of the battery box to the client upon instruction by the loan group. 11. In the event of unresolved disputes between the client and the service company, the matter will be handed over to the loan group. In such cases, the decision of loan group will be final and not subject to further litigation. Loan recipient, Date Installer, Date Annex F Sample System Delivery Sheets System Delivery Sheet (D S1) This form should be completed by the system owner in triplicate. Copies should be given to the installer and technical partner. Customers details Name: Date: Address: Tel: Group: Village: District: Nearest Town: Please check Yes or No for the items delivered to your house. Item Specification Qty Delivered Module 12Wp 2 Charge controller SPCC 10 1 Lamp PL 9 2 Spare tubes 1 Battery 6EL70 70AH 1 Cables 2.5 & 4.0 mm 40 m Battery Box & Lock 1 1 DC/DC Voltage Converter 1 1 Battery Terminals Ordinary 1 set Wire clips & tacks 1 A-13 A-14 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Switches 2 Sockets & Plug 1 Fuses Fuse Card 1 Connector strips 1 Junction box 2 Main switch 15A 1 Module mount 1 Distilled water 1 Comments: Customer's signature: Technician's signature: Annex F: Sample System Delivery Sheets A-15 System Delivery Sheet (D S2) This form should be completed by the system owner in triplicate. Copies should be given to the installer and technical partner. Customers details Name: Date: Address: Tel: Group: Village: District: Nearest Town: Please check Yes or No for the items delivered to your house. Item Specification Qty Delivered Module MSX 40 1 Battery 6EL100 IOOAH 1 Charge controller SPCC 10 1 Lamp PL 9 4 Spare tubes 2 Cables 2.5 & 4.0 mm Battery Box & Lock for one 1 DC/DC voltage Converter 1 Battery Terminals Ordinary 1 set Wire clips & tacks 1 Switches 4 DC sockets & Plug 2 Fuses Fuse Card 1 A-16 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Connector strips 15A130A 2 Junction box 3 Main switch 30A 1 Module mount 1 Distilled water 1 Comments: Customer's signature: Technician's signature: Annex F: Sample System Delivery Sheets A-17 Svstem Delivery Sheet (D S3) This form should be completed by the system owner in triplicate. Copies should be given to the installer and technical partner. Customers details Name: Date: Address: Tel: Group: Village: District: Nearest Town: Please check Yes or No for the items delivered to your house. Item Specification Qty Delivered Module MSX 60 1 Battery 6EL100 100AH 1 Charge controller SPCC 16 1 Lamp PL 9 6 Spare tubes 2 Cables 2.5& 4.0 mm loom Cable 1 Om Battery Box & Lock 1 DC/DC Converter 1 Battery Terminals Ordinary 1 set Wire clips & tacks 1 Switches 6 Sockets & Plug 2 Fuses Fuse Card 1 A-18 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Connector strips 15AJ30A 3 Junction box 4 Main switch 30A 1 Module mount 1 Distilled water 1 Comments: Customer's signature: Technician's signature: Annex G Sample Job Completion Sheet This formn should be completed by the technician in triplicate and countersigned by the system owner. Copies should be given to system owner, installer, and technical partner. Technicians Name: _ Customers details Name: Date: Address: Group: Sub-location: Village: Location: District: Nearest Town: Technical info: System voltage: Solar Modules Manufacturer Model Wattage Serial No. Lights Manufacturer Type Wattage Quantity Charge Manufacturer Model Current IN Current OUT controller A-19 A-20 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Battery Manufacturer Model Capacity(Ah) Quantity Other Loads Manufacturer Model Wattage Serial No. System Tests Module(s) Isc: Amps Continuity: Module(s) Voc: VDC Module(s) polarity: Polarity of outlets: Battery voltage: VDC Voltage drop: VDC Battery polarity: Final visual inspection: Spares Item Type /model Quantity CFL (lights) Battery water Fuses Guarantee card(s) signed: Yes / No. System explained: Yes / No. Annex G: Sample Job Completion Sheet A-21 Comments: Technician's signature: Customer's signature: Annex H Sample System Inspection Sheet (I 1) This form should be completed in triplicate and copies retained by the technical partner, loan group and the installation company. Customer: District: Solar Company: Technician name (s): ACCEPT REJECT 1. Solar Module Manufacturer: Model No: Serial No: Voc Peak Watts: 2. Battery: Manufacturer: Model: Manufacture Date: A-23 A-24 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Amp Hours: 3. Battery Box and box clipping: 4. Charge Regulator Manufacturer: Model No: _ Serial No: _ 5. Lamps (ALL LAMPS FLUORESCENT) Manufacturer: _ Model: _ Watts: Number Watts: Number TV Interference: Radio Interference: Insect Proof: 6. Other loads. (List loads and wattage) ACCEPT REJECT W W _W Annex H: Sample System Inspection Sheet A-25 7. Wiring and Voltage Drops Load Cabling mrnm2 Vdc Solar Cable rnm2 _ Vdc Battery Cable nmn2 _ Vdc Cable Properly Secured to Walls Cable through wall or roof Mount through roof All Connections in boxes Switches working & well installed Sockets working /Properly installed Voltage droppers working Battery wiring 7. Solar Array mounting Types of: Module facing North/ South 8. Spares on site Distilled Water Fluorescent tubes Fuses 9. FUSES A-26 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 10. SYSTEM OVERALL APPROVAL RATING ACCEPT REJECT General Comments and Changes Required: Inspector Namne: Signature: Date: Customer Signature: Date: Annex I Sample System Maintenance/ Service Sheet (M 1) This form should be completed by the technician in triplicate and countersigned by the system owner. A copy should be submitted to EAA. Customer: Group: District: Technician's Name: Company: Is this a scheduled visit? Yes/ No. Date: System Check list (see next page) A-27 A-28 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Battery Voltage (when arriving) VDC Sun conditions: BCght Ooudy Time: 7 8 9 10 11 12 1 2 3 4 5 Controller Battery low Light High LOW Cut-off Load fuse OK Blown Battery voltage(with solar disconnected and loads OFF) VDC Sun conditions: BnghtCloudy Time: 7 8 9 10 11 12 1 2 3 4 5 Battery voltage(with solar disconnected and loads ON) VDC Sun conditions: Bright Cloudy Time: 7 8 9 10 11 12 1 2 3 4 5 Battery Acid Level OK Low Battery Terrninals Clean Corroded Top of Battery Cean Dirty Solar Module (s) OCean Dirty Solar Module voltage (Voc) VDC Solar Module Current (Isc) Amps Sun conditions: Bright Cloudy Time: 7 8 9 10 11 12 1 2 3 4 5 Fluorescent Lights #OK XBlack DC/DC Converter OK Faulty j Switches # OK # Faulty Sockets OK Faulty Battery Voltage (when leaving) VDC Sun conditions: Bright Cloudy Time: 7 8 9 10 11 12 1 2 3 4 5 Controller Battery low light ON OFF Has system disconnected ? Yes/ No. Work performed and Comments. Please indicate if any part of the system has been tampered with. Next service is due on: Technician's Signature: Customer Signature: Annex J Technical Drawings Wooden or metal (flat) roof mount Metal triangular wall mount A-29 A-30 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Wooden battery box with lock and built-in charge controller. ICftLLe. t~~~ - I _ __ _ _ __ _ _ __ _ _ Annex K Sample Survey and Loan Contract Individual Details and Loan Application 1. Name: 2. Postal Address: _ Telephone: Fax No: _ 3. I.D. CardNo: 4. Age: 5. Marital Status: 6. Education: 7. Employed- Yes ( No (J 8. Type of Employment: 9. Monthly Income (salary) Kshs. 10. Other Sources I. Farming Income Kshs. II. Business Income Kshs. m. Others Income Kshs. 11. Solar System details A-31 A-32 Implementation Manual: Financing Mechanisms for Solar Electric Equipment (a) Do you have a solar electric system (or part of a system) already? Yes(_) No( ) If yes, give details. How can it be up-graded? (b) How many rooms do you wish to provide lights for? Please list in order of importance and number of hours. Room Imnortance No. of HouTrs Sitttina room Bedroom 1 Bedroom 2 Bedroom 4 P5ediroom 4 Kitchen Rathroom Toilet Corridor Others, (c) What electric appliances do you have now? Cassette player? Give number of cells. Television? (black and white or Colour?) How many hours do you wish to use them? (d) What other electric appliances do you intend to buy when you when you get PV system? 12. Amount of loan requested: Kshs. Annex 1: Sample System Maintenance/Service Sheet A-33 FOR OFFICIAL USE ONLY Approval by Group Approval by K-REP Date and Stamnp: A-34 Implementation Manual: Financing Mechanisms for Solar Electric Equipment Loan Agreement Memorandum of Agreement for Loan made this day of_ One thousand Nine Hundred and Ninety Between self-help Group, P.O. Box (hereinafter called the Borrower on the one Part) and Kenya Rural Enterprise Programme _ _ (hereinafter called the lender on the other part). WHEREBY IT IS AGREED THAT: 1. Kenya rural Enterprise Programme lends Kenya Shillings in the form of a loan repayable within years/months. 2. The loan will attract a service charge at the rate of 32.5% p.a on reducing balance equivalent to 18.5 p.a flat rate. 3. The loan will be repaid in a period of 24 months through a banker's order recorded in the Group account in favor of SOLAR account. 4. The total repayment amount will be as follows:- Principal Kshs. Service Charge Kshs. Total Kshs. Total amount in words: Kenya Shillings only. 5. The principal pls service charge will be paid in equal monthly installments of Kshs. as per the attached repayment schedule. 6. The date of the first-installment will be Annex 1: Sample System Maintenance/Service Sheet A-35 7. The date of the last installment will be 8. The loan will be used for on-lending to the Group members for installation of their household Solar systems. 9. The loan will be used only for the purpose stated in No. 8 above. 10. Security for the loan willb e a Group Guarantee executed by all the members undertaking to be jointly and severally liable for repaying the loan in full. 11. If the borrower is unable to repay the loan, K-REP will have the right to institute legal action to recover the debt in full. This will only be done on the approval of the K-REP Projects Review Committee. 12. This agreement will remain in force as long as there is outstanding balances of the loan. Declaration We the Borrowers (Group) and the Lender (K-REP) certify that we have read and understood the terms and conditions of this Loan Agreement and do hereby confirm that we shall abide by them. SIGNED on the behalf of the borrower in the presence of Name: Signature: _ Signed by All Group members on their behalf and on behalf of A-36 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 1. Name: ID. No.: Signature: 2. Name: ID. No.: Signature: 3. Name: ID. No.: Signature: 4. Name: ED. No.: Signature: 5. Name: _ ID. No.: Signature: 6. Name: [D. No.: Signature: Annex 1: Sample System Maintenance/Service Sheet A-37 On behalf of Kenya Rural Enterprise Programme (The Lender) below: In the presence of: Name: Signature: Date: _ A-38 Implementation Manual: Financing Mechanisms for Solar Electric Equipment CREDIT OFFICER MONTHLY MONITIORING FORM 1. Name of group 2. Number of members 3. Attendance at meetings Date of meeting No. who attended 4. Number of loan made by groups to individual members Loan Status Total amount loaned Ksh. ii. Amount due Kshs. iii. Amount paid Kshs. _ iv. No. of loans 30 days overdue Amount _ 60 days overdue Amount over 60 days overdue Amount _ V. Loan repayment rate ___ 6. Savings Current savings as per latest bank balance Kshs. Saved this month Amount withdrawn this month Kshs. Annex 1: Sample System Maintenance/Service Sheet A-39 Field Officer's Sigature Date SAVINGS TRANSACTIONS LOAN APPLICATION Months Date Deposit Interest Forfeiture | and Date Amount Loan Interest Total Loan Signature I 2 _ _ _ X _ _ _ _ _ _ 5 6 . 8 _ _ _ l _ _ __ _ _ _ _ _ _ _ 9 _ _ 10 == l 12 ______T 13 _ _ _ _ _ _ _ _ _ 14 _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ 15 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 16 _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 17 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Joint UNDP/World Bank ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) LIST OF REPORTS ON COMPLETED ACTIVITIES Region/Country Activity/Report Title Date Number SUB-SAHARAN AFRICA (AFR) Africa Regional Anglophone Africa Household Energy Workshop (English) 07/88 085/88 Regional Power Seminar on Reducing Electric Power System Losses in Africa (English) 08/88 087/88 Institutional Evaluation of EGL (English) 02/89 098/89 Biomass Mapping Regional Workshops (English) 05/89 -- Francophone Household Energy Workshop (French) 08/89 -- Interafrican Electrical Engineering College: Proposals for Short- and Long-Term Development (English) 03/90 112/90 Biomass Assessment and Mapping (English) 03/90 -- Symposium on Power Sector Reform and Efficiency Improvement in Sub-Saharan Africa (English) 06/96 182/96 Commercialization of Marginal Gas Fields (English) 12/97 201/97 Commercilizing Natural Gas: Lessons from the Seminar in Nairobi for Sub-Saharan Africa and Beyond 01/00 225/00 Angola Energy Assessment (English and Portuguese) 05/89 4708-ANG Power Rehabilitation and Technical Assistance (English) 10/91 142/91 Benin Energy Assessment (English and French) 06/85 5222-BEN Botswana Energy Assessment (English) 09/84 4998-BT Pump Electrification Prefeasibility Study (English) 01/86 047/86 Review of Electricity Service Connection Policy (English) 07/87 071/87 Tuli Block Farms Electrification Study (English) 07/87 072/87 Household Energy Issues Study (English) 02/88 -- Urban Household Energy Strategy Study (English) 05/91 132/91 Burkina Faso Energy Assessment (English and French) 01/86 5730-BUR Technical Assistance Program (English) 03/86 052/86 Urban Household Energy Strategy Study (English and French) 06/91 134/91 Burundi Energy Assessment (English) 06/82 3778-BU Petroleum Supply Management (English) 01/84 012/84 Status Report (English and French) 02/84 011/84 Presentation of Energy Projects for the Fourth Five-Year Plan (1983-1987) (English and French) 05/85 036/85 Improved Charcoal Cookstove Strategy (English and French) 09/85 042/85 Peat Utilization Project (English) 11/85 046/85 Energy Assessment (English and French) 01/92 9215-BU Cape Verde Energy Assessment (English and Portuguese) 08/84 5073-CV Household Energy Strategy Study (English) 02/90 110/90 Central African Republic Energy Assessement (French) 08/92 9898-CAR Chad Elements of Strategy for Urban Household Energy The Case of N'djamena (French) 12/93 160/94 Comoros Energy Assessment (English and French) 01/88 7104-COM In Search of Better Ways to Develop Solar Markets: The Case of Comoros 05/00 230/00 Congo Energy Assessment (English) 01/88 6420-COB Power Development Plan (English and French) 03/90 106/90 Cote d'Ivoire Energy Assessment (English and French) 04/85 5250-IVC Improved Biomass Utilization (English and French) 04/87 069/87 - 2 - Region/Country Activity/Report Title Date Number Cote d'lvoire Power System Efficiency Study (English) 12/87 -- Power Sector Efficiency Study (French) 02/92 140/91 Project of Energy Efficiency in Buildings (English) 09/95 175/95 Ethiopia Energy Assessment (English) 07/84 4741-ET Power System Efficiency Study (English) 10/85 045/85 Agricultural Residue Briquetting Pilot Project (English) 12/86 062/86 Bagasse Study (English) 12/86 063/86 Cooking Efficiency Project (English) 12/87 -- Energy Assessment (English) 02/96 179/96 Gabon Energy Assessment (English) 07/88 6915-GA The Gambia Energy Assessment (English) 11/83 4743-GM Solar Water Heating Retrofit Project (English) 02/85 030/85 Solar Photovoltaic Applications (English) 03/85 032/85 Petroleum Supply Management Assistance (English) 04/85 035/85 Ghana Energy Assessment (English) 11/86 6234-GH Energy Rationalization in the Industrial Sector (English) 06/88 084/88 Sawmill Residues Utilization Study (English) 11/88 074/87 Industrial Energy Efficiency (English) 11/92 148/92 Guinea Energy Assessment (English) 11/86 6137-GUI Household Energy Strategy (English and French) 01/94 163/94 Guinea-Bissau Energy Assessment (English and Portuguese) 08/84 5083-GUB Recommended Technical Assistance Projects (English & Portuguese) 04/85 033/85 Management Options for the Electric Power and Water Supply Subsectors (English) 02/90 100/90 Power and Water Institutional Restructuring (French) 04/91 118/91 Kenya Energy Assessment (English) 05/82 3800-KE Power System Efficiency Study (English) 03/84 014/84 Status Report (English) 05/84 016/84 Coal Conversion Action Plan (English) 02/87 -- Solar Water Heating Study (English) 02/87 066/87 Peri-Urban Woodfuel Development (English) 10/87 076/87 Power Master Plan (English) . 11/87 -- Power Loss Reduction Study (English) 09/96 186/96 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 07/00 231/00 Lesotho Energy Assessment (English) 01/84 4676-LSO Liberia Energy Assessment (English) 12/84 5279-LBR Recommended Technical Assistance Projects (English) 06/85 038/85 Power System Efficiency Study (English) 12/87 081/87 Madagascar Energy Assessment (English) 01/87 5700-MAG Power System Efficiency Study (English and French) 12/87 075/87 Environmental Impact of Woodfuels (French) 10/95 176/95 Malawi Energy Assessment (English) 08/82 3903-MAL Technical Assistance to Improve the Efficiency of Fuelwood Use in the Tobacco Industry (English) 11/83 009/83 Status Report (English) 01/84 013/84 Mali Energy Assessment (English and French) 11/91 8423-MLI Household Energy Strategy (English and French) 03/92 147/92 Islamic Republic of Mauritania Energy Assessment (English and French) 04/85 5224-MAU Household Energy Strategy Study (English and French) 07/90 123/90 - 3 - Region/Country Activity/Report Title Date Number Mauritius Energy Assessment (English) 12/81 3510-MAS Status Report (English) 10/83 008/83 Power System Efficiency Audit (English) 05/87 070/87 Bagasse Power Potential (English) 10/87 077/87 Energy Sector Review (English) 12/94 3643-MAS Mozambique Energy Assessment (English) 01/87 6128-MOZ Household Electricity Utilization Study (English) 03/90 113/90 Electricity Tariffs Study (English) 06/96 181/96 Sample Survey of Low Voltage Electricity Customers 06/97 195/97 Namibia Energy Assessment (English) 03/93 11320-NAM Niger Energy Assessment (French) 05/84 4642-NIR Status Report (English and French) 02/86 051/86 Improved Stoves Project (English and French) 12/87 080/87 Household Energy Conservation and Substitution (English and French) 01/88 082/88 Nigeria Energy Assessment (English) 08/83 4440-UNI Energy Assessment (English) 07/93 11672-UNI Rwanda Energy Assessment (English) 06/82 3779-RW Status Report (English and French) 05/84 017/84 Improved Charcoal Cookstove Strategy (English and French) 08/86 059/86 Improved Charcoal Production Techniques (English and French) 02/87 065/87 Energy Assessment (English and French) 07/91 8017-RW Commercialization of Improved Charcoal Stoves and Carbonization Techniques Mid-Term Progress Report (English and French) 12/91 141/91 SADC SADC Regional Power Interconnection Study, Vols. I-IV (English) 12/93 -- SADCC SADCC Regional Sector: Regional Capacity-Building Program for Energy Surveys and Policy Analysis (English) - 11/91 -- Sao Tome and Principe Energy Assessment (English) 10/85 5803-STP Senegal Energy Assessment (English) 07/83 4182-SE Status Report (English and French) 10/84 025/84 Industrial Energy Conservation Study (English) 05/85 037/85 Preparatory Assistance for Donor Meeting (English and French) 04/86 056/86 Urban Household Energy Strategy (English) 02/89 096/89 Industrial Energy Conservation Program (English) 05/94 165/94 Seychelles Energy Assessment (English) 01/84 4693-SEY Electric Power System Efficiency Study (English) 08/84 021/84 Sierra Leone Energy Assessment (English) 10/87 6597-SL Somalia Energy Assessment (English) 12/85 5796-SO South Africa Options for the Structure and Regulation of Natural Republic of Gas Industry (English) 05/95 172/95 Sudan Management Assistance to the Ministry of Energy and Mining 05/83 003/83 Energy Assessment (English) 07/83 4511-SU Power System Efficiency Study (English) 06/84 018/84 Status Report (English) 11/84 026/84 Wood Energy/Forestry Feasibility (English) 07/87 073/87 Swaziland Energy Assessment (English) 02/87 6262-SW Household Energy Strategy Study 10/97 198/97 Tanzania Energy Assessment (English) 11/84 4969-TA Peri-Urban Woodfaels Feasibility Study (English) 08/88 086/88 Tobacco Curing Efficiency Study (English) 05/89 102/89 Remote Sensing and Mapping of Woodlands (English) 06/90 -- -4 - Region/Country Activity/Report Title Date Number Tanzania Industrial Energy Efficiency Technical Assistance (English) 08/90 122/90 Power Loss Reduction Volume 1: Transmission and Distribution SystemTechnical Loss Reduction and Network Development (English) 06/98 204A/98 Power Loss Reduction Volume 2: Reduction of Non-Technical Losses (English) 06/98 204B/98 Togo Energy Assessment (English) 06/85 5221-TO Wood Recovery in the Nangbeto Lake (English and French) 04/86 055/86 Power Efficiency Improvement (English and French) 12/87 078/87 Uganda Energy Assessment (English) 07/83 4453-UG Status Report (English) 08/84 020/84 Institutional Review of the Energy Sector (English) 01/85 029/85 Energy Efficiency in Tobacco Curing Industry (English) 02/86 049/86 Fuelwood/Forestry Feasibility Study (English) 03/86 053/86 Power System Efficiency Study (English) 12/88 092/88 Energy Efficiency Improvement in the Brick and Tile Industry (English) 02/89 097/89 Tobacco Curing Pilot Project (English) 03/89 UNDP Terninal Report Energy Assessment (English) 12/96 193/96 Rural Electrification Strategy Study 09/99 221/99 Zaire Energy Assessment (English) 05/86 5837-ZR Zambia Energy Assessment (English) 01/83 4110-ZA Status Report (English) 08/85 039/85 Energy Sector Institutional Review (English) 11/86 060/86 Power Subsector Efficiency Study (English) 02/89 093/88 Energy Strategy Study (English) 02/89 094/88 Urban Household Energy Strategy Study (English) 08/90 121/90 Zimbabwe Energy Assessment (English) 06/82 3765-ZIM Power System Efficiency Study (English) 06/83 005/83 Status Report (English) 08/84 019/84 Power Sector Management Assistance Project (English) 04/85 034/85 Power Sector Management Institution Building (English) 09/89 -- Petroleum Management Assistance (English) 12/89 109/89 Charcoal Utilization Prefeasibility Study (English) 06/90 119/90 Integrated Energy Strategy Evaluation (English) 01/92 8768-ZIM Energy Efficiency Technical Assistance Project: Strategic Framework for a National Energy Efficiency Improvement Program (English) 04/94 -- Capacity Building for the National Energy Efficiency Improvement Progranmme (NEEIP) (English) 12/94 -- Rural Electrification Study 03/00 228/00 EAST ASIA AND PACIFIC (EAP) Asia Regional Pacific Household and Rural Energy Seminar (English) 11/90 -- China County-Level Rural Energy Assessments (English) 05/89 101/89 Fuelwood Forestry Preinvestment Study (English) 12/89 105/89 Strategic Options for Power Sector Reforn in China (English) 07/93 156/93 Energy Efficiency and Pollution Control in Township and Village Enterprises (TVE) Industry (English) 11/94 168/94 -5 - Region/Country Activity/Report Title Date Number China Energy for Rural Development in China: An Assessment Based on a Joint Chinese/ESMAP Study in Six Counties (English) 06/96 183/96 Improving the Technical Efficiency of Decentralized Power Companies 09/99 222/999 Fiji Energy Assessment (English) 06/83 4462-FIJ Indonesia Energy Assessment (English) 11/81 3543-IND Status Report (English) 09/84 022/84 Power Generation Efficiency Study (English) 02/86 050/86 Energy Efficiency in the Brick, Tile and Lime Industries (English) 04/87 067/87 Diesel Generating Plant Efficiency Study (English) 12/88 095/88 Urban Household Energy Strategy Study (English) 02/90 107/90 Biomass Gasifier Preinvestment Study Vols. I & II (English) 12/90 124/90 Prospects for Biomass Power Generation with Emphasis on Palm Oil, Sugar, Rubberwood and Plywood Residues (English) 11/94 167/94 Lao PDR Urban Electricity Demand Assessment Study (English) 03/93 154/93 Institutional Development for Off-Grid Electrification 06/99 215/99 Malaysia Sabah Power System Efficiency Study (English) 03/87 068/87 Gas Utilization Study (English) 09/91 9645-MA Myanmar Energy Assessment (English) 06/85 5416-BA Papua New Guinea Energy Assessment (English) 06/82 3882-PNG Status Report (English) 07/83 006/83 Energy Strategy Paper (English) -- -- Institutional Review -in the Energy Sector (English) 10/84 023/84 Power Tariff Study (English) 10/84 024/84 Philippines Commercial Potential for Power Production from Agricultural Residues (English) 12/93 157/93 Energy Conservation Study (English) 08/94 -- Solomon Islands Energy Assessment (English) 06/83 4404-SOL Energy Assessment (English) 01/92 979-SOL South Pacific Petroleum Transport in the South Pacific (English) 05/86 -- Thailand Energy Assessment (English) 09/85 5793-TH Rural Energy Issues and Options (English) 09/85 044/85 Accelerated Dissemination of Improved Stoves and Charcoal Kilns (English) 09/87 079/87 Northeast Region Village Forestry and Woodfaels Preinvestment Study (English) 02/88 083/88 Impact of Lower Oil Prices (English) 08/88 -- Coal Development and Utilization Study (English) 10/89 -- Tonga Energy Assessment (English) 06/85 5498-TON Vanuatu Energy Assessment (English) 06/85 5577-VA Vietnam Rural and Household Energy-Issues and Options (English) 01/94 161/94 Power Sector Reform and Restructuring in Vietnam: Final Report to the Steering Committee (English and Vietnamese) 09/95 174/95 Household Energy Technical Assistance: Improved Coal Briquetting and Commercialized Dissemination of Higher Efficiency Biomass and Coal Stoves (English) 01/96 178/96 Western Samoa Energy Assessment (English) 06/85 5497-WSO -6 - Region/Country Activity/Report Title Date Number SOUTH ASIA (SAS) Bangladesh Energy Assessment (English) 10/82 3873-BD Priority Investment Program (English) 05/83 002/83 Status Report (English) 04/84 015/84 Bangladesh Power System Efficiency Study (English) .02/85 031/85 Small Scale Uses of Gas Prefeasibility Study (English) 12/88 -- India Opportunities for Commercialization of Nonconventional Energy Systems (English) 11/88 091/88 Maharashtra Bagasse Energy Efficiency Project (English) 07/90 120/90 Mini-Hydro Development on Irrigation Dams and Canal Drops Vols. I. II and III (English) 07/91 139/91 WindFarm Pre-Investment Study (English) 12/92 150/92 Power Sector Reform Seminar (English) 04/94 166/94 Environmental Issues in the Power Sector (English) 06/98 205/98 Environmental Issues in the Power Sector: Manual for Environmental Decision Making (English) 06/99 213/99 Household Energy Strategies for Urban India: The Case of Hyderabad 06/99 214/99 Nepal Energy Assessment (English) 08/83 4474-NEP Status Report (English) 01/85 028/84 Energy Efficiency & Fuel Substitution in Industries (English) 06/93 158/93 Pakistan Household Energy Assessment (English) 05/88 -- Assessment of Photovoltaic Programs, Applications, and Markets (English) 10/89 103/89 National Household Energy Survey and Strategy Formulation Study: Project Terminal Report (English) 03/94 -- Managing the Energy Transition (English) 10/94 Lighting Efficiency Improvement Program Phase 1: Commercial Buildings Five Year Plan (English) 10/94 -- Sri Lanka Energy Assessment (English) 05/82 3792-CE Power System Loss Reduction Study (English) 07/83 007/83 Status Report (English) 01/84 010/84 Industrial Energy Conservation Study (English) 03/86 054/86 EUROPE AND CENTRAL ASIA (ECA) Bulgaria Natural Gas Policies and Issues (English) 10/96 188/96 Central and Eastem Europe Power Sector Reform in Selected Countries 07/97 196/97 Eastern Europe The Future of Natural Gas in Eastem Europe (English) 08/92 149/92 Kazakhstan Natural Gas Investment Study, Volumes 1, 2 & 3 12/97 199/97 Kazakhstan,& Kyrgyzstan Opportunities for Renewable Energy Development 11/97 16855-KAZ Poland Energy Sector Restructuring Program Vols. I-V (English) 01/93 153/93 Natural Gas Upstream Policy (English and Polish) 08/98 206/98 Energy Sector Restructuring Program: Establishing the Energy Regulation Authority 10/98 208/98 Portugal Energy Assessment (English) 04/84 4824-PO Romania Natural Gas Development Strategy (English) 12/96 192/96 Slovenia Workshop on Private Participation in the Power Sector (English) 02/99 211/99 -7 - Region/Country Activity/Report Title Date Number Turkey Energy Assessment (English) 03/83 3877-TU Energy and the Environment: Issues and Options Paper 04/00 229/00 MIDDLE EAST AND NORTH AFRICA (MNA) Arab Republic of Egypt Energy Assessment (English) 10/96 189/96 Energy Assessment (English and French) 03/84 4157-MOR Status Report (English and French) 01/86 048/86 Morocco Energy Sector Institutional Development Study (English and French) 07/95 173/95 Natural Gas Pricing Study (French) 10/98 209/98 Gas Development Plan Phase II (French) 02/99 210/99 Syria Energy Assessment (English) 05/86 5822-SYR Electric Power Efficiency Study (English) 09/88 089/88 Energy Efficiency Improvement in the Cement Sector (English) 04/89 099/89 Syria Energy Efficiency Improvement in the Fertilizer Sector (English) 06/90 115/90 Tunisia Fuel Substitution (English. and French) 03/90 -- Power Efficiency Study (English and French) 02/92 136/91 Energy Management Strategy in the Residential and Tertiary Sectors (English) 04/92 146/92 Renewable Energy Strategy Study, Volume I (French) 11/96 190A/96 Renewable Energy Strategy Study, Volume II (French) 11/96 190B/96 Yemen Energy Assessment (English) 12/84 4892-YAR Energy Investment Priorities (English) 02/87 6376-YAR Household Energy Strategy Study Phase I (English) 03/91 126/91 LATIN AMERICA AND THE CARIBBEAN (LAC) LAC Regional Regional Seminar on Electric Power System Loss Reduction in the Caribbean (English) . 07/89 -- Elirnination of Lead in Gasoline in Latin America and the Caribbean (English and Spanish) 04/97 194/97 Elimination of Lead in Gasoline in Latin America and the Caribbean - Status Report (English and Spanish) 12/97 200/97 Harmonization of Fuels Specifications in Latin America and the Caribbean (English and Spanish) 06/98 203/98 Bolivia Energy Assessment (English) 04/83 4213-BO National Energy Plan (English) 12/87 -- La Paz Private Power Technical Assistance (English) 11/90 111/90 Prefeasibility Evaluation Rural Electrification and Demand Assessment (English and Spanish) 04/91 129/91 National Energy Plan (Spanish) 08/91 131/91 Private Power Generation and Transrnission (English) 01/92 137/91 Natural Gas Distribution: Econormics and Regulation (English) 03/92 125/92 Natural Gas Sector Policies and Issues (English and Spanish) 12/93 164/93 Household Rural Energy Strategy (English and Spanish) 01/94 162/94 Preparation of Capitalization of the Hydrocarbon Sector 12/96 191/96 Brazil Energy Efficiency & Conservation: Strategic Partnership for Energy Efficiency in Brazil (English) 01/95 170/95 -8- Region/Country Activity/Report Title Date Number Brazil Hydro and Thermal Power Sector Study 09/97 197/97 Chile Energy Sector Review (English) 08/88 7129-CH Colombia Energy Strategy Paper (English) 12/86 -- Power Sector Restructuring (English) 11/94 169/94 Colombia Energy Efficiency Report for the Commercial and Public Sector (English) 06/96 184/96 Costa Rica Energy Assessment (English and Spanish) 01/84 4655-CR Recommended Technical Assistance Projects (English) 11/84 027/84 Forest Residues Utilization Study (English and Spanish) 02/90 108/90 Dominican Republic Energy Assessment (English) 05/91 8234-DO Ecuador Energy Assessment (Spanish) 12/85 5865-EC Energy Strategy Phase I (Spanish) 07/88 -- Energy Strategy (English) 04/91 -- Private Minihydropower Development Study (English) 11/92 -- Energy Pricing Subsidies and Interfuel Substitution (English) 08/94 11798-EC Energy Pricing, Poverty and Social Mitigation (English) 08/94 12831-EC Guatemala Issues and Options in the Energy Sector (English) 09/93 12160-GU Haiti Energy Assessment (English and French) 06/82 3672-HA Status Report (English and French) 08/85 041/85 Household Energy Strategy (English and French) 12/91 143/91 Honduras Energy Assessment (English) 08/87 6476-HO Petroleum Supply Management (English) 03/91 128/91 Jamaica Energy Assessment (English) 04/85 5466-JM Petroleum Procurement, Refining, and Distribution Study (English) 11/86 061/86 Energy Efficiency Building Code Phase I (English) 03/88 -- Energy Efficiency Standards and Labels Phase I (English) 03/88 -- Management Information System Phase I (English) 03/88 -- Charcoal Production Project (English) 09/88 090/88 FIDCO Sawmill Residues Utilization Study (English) 09/88 088/88 Energy Sector Strategy and Investment Planning Study (English) 07/92 135/92 Mexico Improved Charcoal Production Within Forest Management for the State of Veracruz (English and Spanish) 08/91 138/91 Energy Efficiency Management Technical Assistance to the Cornision Nacional para el Ahorro de Energia (CONAE) (English) 04/96 180/96 Panama Power System Efficiency Study (English) 06/83 004/83 Paraguay Energy Assessment (English) 10/84 5145-PA Recommended Technical Assistance Projects (English) 09/85 -- Status Report (English and Spanish) 09/85 043/85 Peru Energy Assessment (English) 01/84 4677-PE Status Report (English) 08/85 040/85 Proposal for a Stove Dissemination Program in the Sierra (English and Spanish) 02/87 064/87 Energy Strategy (English and Spanish) 12/90 -- Study of Energy Taxation and Liberalization of the Hydrocarbons Sector (English and Spanish) 120/93 159/93 Reform and Privatization in the Hydrocarbon Sector (English and Spanish) 07/99 216/99 Saint Lucia Energy Assessment (English) 09/84 5111-SLU St. Vincent and the Grenadines Energy Assessment (English) 09/84 5103-STV - 9 - Region/Country Activity/Report Title Date Number Sub Andean Environmental and Social Regulation of Oil and Gas Operations in Sensitive Areas of the Sub-Andean Basin (English and Spanish) 07/99 217/99 Trinidad and Tobago Energy Assessment (English) 12/85 5930-TR GLOBAL Energy End Use Efficiency: Research and Strategy (English) 11/89 -- Women and Energy--A Resource Guide The International Network: Policies and Experience (English) 04/90 -- Guidelines for Utility Customer Management and Metering (English and Spanish) 07/91 -- Assessment of Personal Computer Models for Energy Planning in Developing Countries (English) 10/91 -- Long-Term Gas Contracts Principles and Applications (English) 02/93 152/93 Comparative Behavior of Firms Under Public and Private Ownership (English) 05/93 155/93 Development of Regional Electric Power Networks (English) 10/94 -- Roundtable on Energy Efficiency (English) 02/95 171/95 Assessing Pollution Abatement Policies with a Case Study of Ankara (English) 11/95 177/95 A Synopsis of the Third Annual Roundtable on Independent Power Projects: Rhetoric and Reality (English) 08/96 187/96 Rural Energy and Development Roundtable (English) 05/98 202/98 A Synopsis of the Second Roundtable on Energy Efficiency. Institutional and Financial Delivery Mechanisms (English) 09/98 207/98 The Effect of a Shadow Price on Carbon Emission in the Energy Portfolio of the World Bank: A Carbon Backcasting Exercise (English) 02/99 212/99 Increasing the Efficiency of Gas Distribution Phase 1: Case Studies and Thematic Data Sheets 07/99 218/99 Global Energy Sector Reform in Developing Countries: A Scorecard 07/99 219/99 Global Lighting Services for the Poor Phase II: Text Marketing of Small "Solar" Batteries for Rural Electrification Purposes 08/99 220/99 A Review of the Renewable Energy Activities of the UNDP/ World Bank Energy Sector Management Assistance Programme 1993 to 1998 11/99 223/99 Energy, Transportation and Environment: Policy Options for Environmental Improvement 12/99 224/99 Privatization, Competition and Regulation in the British Electricity Industry, With Implications for Developing Countries 02/00 226/00 Reducing the Cost of Grid Extension for Rural Electrification 02/00 227/00 7/31/00 The World Bank 1818 H Street, NW Washington, DC 20433 USA Tel.: 1.202.458.2321 Fax.: 1.202.522.3018 Internet: www.worldbank.org/esmap Email: esmap@worldbank.org A joint UJNDPiWorld Bank Programme