1. Energy Week 2006 Funding: GPOBA and ESMAP Kilian Reiche and Dana Rysankova The World Bank OBA for Offgrid Electricity Access Bolivia IDTR - Early Lessons

2. Electricity and ICT services via decentralized PPP US$60M – 10 years – 3 Phases Phase I – Investment &TA > 15,000 SHS + grid in Phase I >100k Bolivians benefit directly >1 million cell phone access –connection+use! –pro poor regulation –universal access fund Challenges: low population density, high poverty, socio- cultural issues, diverse indigenous population, political/social/fiscal crisis. IDTR Bolivia Decentralized Infrastructure for Rural Transformation

3. hardeasiest hardesteasier Closer to 100%  more offgrid Source: ESMAP 2006

4. Demand: - remote - low demand + income - high risk + cost 2000 DataGDP/ Cap [$] Pop/ km 2 GDP/ km 2 [$] Bolivia1,035 8 7,535 Paraguay1,5041418,479 Peru2,0562041,608 Ecuador1,0474647,912 Columbia1,9354171,363 Brazil3,5032069,669 Chile4,7032093,190 Venezuela2,0252753,282 Argentina7,70214102,504  Offgrid + Subsidies

5. New SHS Medium Term Service Contracts Market Stage  Competition Type: New SHS Medium Term Service Contracts Market Stage  Competition Type: Third way in between dealer + concession US$ 10M for 15,000+ SHS 14 areas (400-3000 SHS each) max. no. users at fixed subsidy Price caps and benchmarking prevent predatory pricing New Medium Term Service Contracts –deep market penetration w/o problems of classical concession –3+4 years (limits risk exposure) –OBA: choice (user, supplier), creativity, performance incentives –Decentralized market development (supply, demand) –Decentralized M&E (costs in remote areas)

6. New SHS Medium Term Service Contracts Targeting: self selection + geographic Area selection based on productive potential, grid plans and synergies with ICT Beyond Connection: Productive Uses and Training for SME and HH Tenders need attention: - professional transaction advice - road show!  6 bidders entered 30 bids in tough times…

7. Road Show: Many bidders  bidding works Efficiency: Transaction Costs < Gain

8. Tender reduced national SHS Prices Asia 2005 China50 Wp $300-400 Bangladesh50Wp $350 Philippines50Wp$400-500 LAC 2005 (incl. inst.) Bolivia IDTR50Wp$600 Nicaragua50Wp$800 Mexico75Wp$1000 Argentina100Wp$1000 1.Reduced 40% from Bolivia UNDP 2004 2.of this, 25% from tender min in spite of PV shortage 3.Bolivia IDTR 2005 lowest in LAC…

9. 1.Input-Output:project – provider – user 2.Well informed choice: creativity – winner’s curse (in/out) 3.Efficiency: control – capital costs (15/80/5%) 4.Tender Document: watertight – simple 5.Quality: equipment – system – service (Ah) 6.Risks: government – operator – user (battery) 7.Poll:Bank! SHS OBA Tender  Trade Offs! Data Room – www.idtr.gov.bo

10. Balanced OBA design helped project to survive in tough times … OBA means balancing trade-offs!  Partnership lasts if fair deal for both sides! PPP: Bidders buy in!  30 bids in 2005 …in spite of country climate PPP: new Government accepts the model!  2006 mission confirms contracts + scale-up plans … in spite of strong stance against PPI

11. Thank you! Thank you! OBA for Offgrid Electricity Access Bolivia IDTR - Early Lessons www.idtr.gov.bo