General Information South African Export Development Fund (SAEDF) March 2009

2 Location

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4 Solar Water Heater

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6 Overall view of light and SWH interventions

7 Electrical interventions

8 Sectional view of ceiling installation

9 Ceiling installation - Public Works

10 Background Project Owner/client: Kuyasa Community-based Energy Services entity (to be formed) Long-term finance, maintenance and democratic participation Project Funder: Department of Environmental Affairs and Tourism (DEAT) Project finance and management oversight Institutional stakeholder:City of Cape Town (CoCT) Enabling and facilitating implementation Implementer: South African Export Development Fund (SAEDF) Day to day management of implementation, contracting of suppliers and labour Players & functions

11 Key aspects 2,309 houses (minimum) Budget shortfall underwritten by SAEDF Kuyasa community empowerment / investment / jobs / ownership Sustainability and ongoing local contribution Carbon finance, cost contribution and collection Complimentary initiatives Greening Support to community initiatives

12 Kuyasa project outputs 2.82 Tons of Carbon Credits (1.2 for SWH) per unit/per annum Total tons of 6,511 p/a. Income of approx R 780,000 p/a (at Euro10/ton) Ongoing communal income Skilled and semi-skilled jobs created for 60 persons - ongoing maintenance jobs and business opportunities Modeling and informing future sustainability in low cost housing

13 Energy poverty can be understood as limited access to and/or affordability of energy services thus affecting both energy choices and consumption patterns of poor households. Therefore due to energy poverty, the demand for energy services in these households is said to be suppressed = Because of poverty or lack of infrastructure energy service levels are below those that would otherwise have been consumed The unsuppressed level of consumption for houses without ceilings, with electric hot-water storage geysers and incandescent lamps can be predicted using calibrated theoretical models (baselines) Suppressed Demand

14 Suppressed Demand Morning Evening Thermal power required to reach 21 o C Thermal energy required without ceilings and ceiling insulation Outdoor ambient winters day temperature profile Current level of space heating Suppressed demand for thermal energy Thermal energy required in houses with ceilings and ceiling insulation

15 Benefits Social Respiratory health burden reduced Provision of hot water – health / comfort Household cost savings due to energy efficiency Employment opportunities (EPWP) Economic Peak demand reduced – defers new installed capacity Leadership for low cost housing / energy industry Entrepreneurial opportunities Environmental Largest project of its kind in Africa - Leadership City SWH target – 10% by 2010 (ie houses) Project assists this target Implementing global commitments Governance Local participation and decision-making

16 High level impact Placing energy poverty in low income housing firmly on the national agenda New roll-out and replication Local manufacture / improved technology Solar energy adaptation Open Vented Solar Water Heater Balanced pressure Tempered water Quality / Longevity Water-wise Easy maintenance Low cost 16

17 I never thought a poor person like me could have a solar geyser. We are warm now, we are saving, we dont get flu as often. Life is much easier. I get a lot of visitors now – no one can laugh at my house. The project has given the people of this community dignity. The project brought skills and jobs for young men, they dont hang around street corners anymore. Our children are much safer now, no more hanging wires. The project makes us proud.

18 What will it cost? Collection of contribution Monetize basic electricity grant New Technology RebateExisting Technology Nett Additional Cost Solar Water Heaters 6,5002,500*4,000 Ceiling Insulation 3,39202,2821,110 Wall Insulation Floor Insulation Total6,566 Source: Quantity Surveyor estimates based on current Solar Water Heater and Thermal Efficiency Technology and standard specifications. * Based on a similar Solar Water Heater currently on the Eskom Solar Water Incentive.

19 Can we afford to do it? Carbon finance DSM finance Eskom SWH subsidy Collection of contribution Public works Monetize basic electricity grant

Can we afford not to? Sustainable model delivering on the critical imperatives: Service delivery / Poverty alleviation Micro economic benefits at household level Economic co-benefits Health Job creation / skills development Macro economic benefits Avoided new power generation 20

21 Finance for large-scale roll-out Commercially viable to finance and roll out SWHs in low-cost housing on a large scale through a combination of: Hot water supply - monthly payment – Collection through pre-paid electricity Demand side finance Eskom SWH subsidy Carbon finance - programmatic CDM Public works (labour and local skills development) Large scale roll-out of alternative energy possible Ensuring pro-poor service delivery and poverty alleviation; Supplying community ownership, jobs and ongoing maintenance; Supplying commercially viable development through public/private partnerships.

Some final notes Many small sources of emissions make transaction costs high Cost R30m in implementation costs R for verification (awaiting completion) 95% completion awaiting final DEA payment Scale… Government investment and ownership of CERs Suppressed demand needs to be included in methodological approach for replication NAMAs may be more appropriate 22

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