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1a The Role of SGBs in Clean Energy Development Jeffrey Haeni USAID/EGAT/I&E Infrastructure Workshop.

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Presentation on theme: "1a The Role of SGBs in Clean Energy Development Jeffrey Haeni USAID/EGAT/I&E Infrastructure Workshop."— Presentation transcript:

1 1a The Role of SGBs in Clean Energy Development Jeffrey Haeni USAID/EGAT/I&E Infrastructure Workshop

2 2 Alternative Scenario or BAU? $26 trillion in global energy spending by 2030 and there will still be… –1.4B w/out electricity –2.6B using traditional cooking fuels Source: UN Population Projections, 2006 ; IEA World Energy Outlook, 2008

3 3 The SME Concept

4 4 Lambark-LPG-Ghana SEUL-Solar-Uganda SME-RE-Biomass-Cambodia VEV-Wind-Senegal Toyola-Stoves-Ghana LEDCO-Hydro-Nepal MOP-Fruit Drying-Uganda Red Ceramics- Natural Gas-Bolivia Two Decades of Successful Enterprise Experience … 100s of Examples Source: E+Co

5 5 The Clean Energy SGB Universe Definition: <300 employees, <15 million in revenues/assets (IFC) Types of Services: Lighting, electricity for appliances, improved cooking, water-pumping, agro-processing, motive transport Technologies: LPG, Solar PV, solar thermal, improved biomass cookstoves, hydro, wind, biogas, gasification, biofuels Interaction with Customers: Single buyer PPAs, inside-the-fence deals, large numbers of retail customers

6 6 The SGB Universe Business models: How will the customer pay? Cash, 30-day credit, long term credit rental, fee-for-service/utility model, supplementary subsidies provided directly to business, vouchers systems, … Niche in the value chain? Sourcing, manufacture, distribution, retail, maintenance, project operator… Operational structure? One company w/ everything in house, one company employing contractors, franchise model, … Ownership? Private (single owner, limited partnership, corporation, association), public-private partnerships, community/cooperatively owned, etc, …

7 7 SME Universe Current Status: Technology/Application Installations Biogas 16 million PV 2 million Small Wind <10,000 Source: REN What Can be Achieved? Source: Innovations in Rural Energy Delivery – Navigant

8 8

9 9 SME Development Toolkit: Methodology Assemble a cross-section of real-world examples –There are 16 of these, and counting From examples, identify criteria linked with success and failure, replicability and growth –1 programmatic & 1 enterprise framework developed Develop a set of implementation tools for USAID staff to evaluate and improve existing programs and propose new ones. –“Tools” include: the 2 frameworks, financial analysis tutorials, portfolio spreadsheets and the effects of carbon finance, concrete step-by-step materials on how to plan a business and create proposals

10 Policy Technology Enterprise The Framework for Program Implementation There are 3 main elements that, in combination, can characterize most support programs. The most effective programs address all 3 in a balanced fashion.

11 Policy Technology Enterprise Program Challenges Some programs, for example, put relatively too much emphasis on policy and neglect the technology and enterprise aspects. The potential positive impacts, then, “spill” out and are not realized.

12 12 The Framework for SGBs: Creation and sustained success Entrepreneur (e)‏ Technology (t)‏ Services (Es)‏ Finance (Ef)‏ Demand (d)‏ Knowledge (k)‏ Services (Cs)‏ Finance (Cf)‏ Financial Policy & Enabling Environment EnvironmentalSocial E (Enterprise)‏ C (Customer)‏

13 13 Cross-cutting Topics Policy and enabling environments Carbon finance Subsidies Avenues of intervention

14 14 Policy and enabling environments Key issue areas affecting energy SMEs (can be positive or negative, depending) –Government/donor energy support programs –Preferential/discriminatory tax treatment –Business and banking environment

15 15 Carbon Finance Represents a potential additional source of revenue for energy SMEs –Must balance carbon development costs against anticipated revenues CERs - difficult, narrow range of profitability VERs – ~ 10,000 t/yr by 2010 “hurdle rate” –Single enterprises or programs of activities –Need for specialized carbon developer

16 16 Subsidies What makes a subsidy “smart?” –Effective, achieves its stated aims –Satisfies the “But-for” principle –Cost-benefit analysis –Efficient, compared to alternative strategies Hard subsidies (provide forms of direct financial benefits) vs Market readiness subsidies (build human capacity, awareness, etc.)

17 17 Avenues of Intervention Variety of ways to get involved –Information (collection, analysis, dissemination) –Market readiness (training, advocacy, awareness-raising) –Transactions (program implementation, finance)

18 18 The Wikispace Rationale for creating a Wikispace –Dynamic, easily updated, supports multiple media formats, more “2D” (as opposed to a “linear” report) –Can be opened up for future collaboration, leveraging collective intelligence and expertise

19 19 The Wikispace

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