Recording and presentations: Developing Minigrid Projects in Ethiopia
08 January 2020
Automated transcription (it may contain errors)
Belén Gallego 1:32
Good morning Good afternoon ladies and gentlemen, I just wanted to welcome you. This is the right place you are on the online session developing many great projects in Ethiopian. We’re just going to allow a couple more minutes for people to come into the room. And in the meanwhile, I invite you to share with us make sure you pick in your chat, all panelists, all attendees and you will introduce yourself, your company, your name, your company, and where you’re joining from. Thank you very much and usually we will start in a couple of minutes. Thank you
Good morning Good afternoon ladies and gentlemen, depending very much where you’re joining from and from what I can see here in the chat, you’re joining from absolutely everywhere. There are people from Chile from the US everyone in Latin America, Colombia. I’ve seen them names. Of course if you’re here you know there are people from India there are people from very many different price of Africa. I’d like to welcome your Today we are Here to start this year, these webinars this year, I Happy New Year to you all, this is our first webinar for 2020. And we’re starting with with a bang. And the reason why we’re starting with a bang is because if you are is right now one of the most interesting markets, at least in the region, and we are actually looking at technology that can change and revolutionize the way that we understand energy generation energy consumption, particularly in Africa, but not only in Africa. So today, we’re looking at developing many great projects at opia. And we have two people that are experts in this topic with us and I’d like to ask them to introduce themselves. So first, I’d like to ask john, if you can please introduce yourself and you know your experience with this topic.
Unknown Speaker 4:49
Morning everyone. My name is john Mac. So I work as a senior nav specialist at the World Bank in Washington DC, where I’m heading to global facility. Meaning grits. And I’m also providing what we call cross support to our operational colleagues in Nigeria and Ethiopia, where we’re providing financing for investments in Greece.
Belén Gallego 5:17
Excellent. And Inka. Please, I will ask you the same. Could you please introduce yourself and the work you’ve done in your experience for this topic? Thank you.
Unknown Speaker 5:25
Great, Perfect, thank you.
Unknown Speaker 5:28
Greetings from others. It’s actually holidays here today. So welcome Ghana to everyone. I am the gender and energy lead for the World Bank. I’m based in as map and I also provide cross support to the Africa program, where I lead all gender related work linked operations and have been working on the Ethiopia portfolio for the last four years.
Belén Gallego 5:54
Thank you very much, john Inka. Okay, so without further ado, this is the way that is going to work first. JOHN is going to give a presentation then Inka. And then we’ll have some time for answers. So please send your questions using the q amp a box at the bottom. But please bear in mind, we’re going to do as many questions as we can, we’ll have about 15 minutes or so. But it depends, you know, first come first serve, essentially. So, john, if you please can share this screen with us so that we can get ready. And if you if you guys have any questions, remember to use the q&a box okay with them once both presentations have gone through. And just a reminder for everyone, you know, just make sure I know that many of you have already been in many webinars before, but we do record this session and you will have access to the recordings. And you will also get access to the presentations that you’ve seen online now, so don’t worry because you will get access to those young Go ahead.
Unknown Speaker 6:53
Great, thank you. Thank you all for your
Belén Gallego 6:55
presentation perfectly. You’re ready to go.
Unknown Speaker 6:58
Great. Thanks. Can you Hear me? Well? Yes. Right. So thanks, everybody for joining this is and thanks for the land and colleagues to organize this. For us this is a unique opportunity to, to seek feedback and to share some of the initial ideas that we’re having around the Ethiopia program in particular on mini grids. So we’re very excited to be here. And everything that we’re sharing today is really at a very early stage. So it’s it’s very much the way certainly I look at it is that it’s very much a brainstorm session, rather than a report out of what we know and what we what we want to do. And also just to maybe just to step back that the World Bank we always work with governments, and so the World Bank Group also consists of of our colleagues at IFC work directly with the private sector. But in our case from the World Bank, we always go and work directly with governments and have to go through governments so and also some of the ideas that we’re sharing today. That’s impart RDS Empire. It’s built on the dialogue that we’re having with the government’s but the end of the day, it’s the government’s that will make the decision including in this case, the government of Ethiopia. So I also would like all the attendants to keep that in the back of of your mind as we as we move through the discussions.
Unknown Speaker 8:46
Unknown Speaker 8:48
just to put this program in Ethiopia, in a in a broader context, is what we’re seeing from a global perspective is good news. So we see momentum in the energy access space and momentum towards universal access by 2030. If we got to get there, it’s up to all of us. But there’s good hope that we can get there, especially involving all the different solutions for grid extension, we integrate an outfit. So today, if you compare it to 2011, we had about globally about 82% of access to electricity. Today, we’re well above 87%. In addition, we also see now Africa, stepping up and for the first time in history is the electrification ratio outpacing the population growth and so also now an absolute fingers responding to See reductions in people without access in Africa. But that’s that’s good news. And when we look at the countries that are leading the charge, what we’re seeing is that these countries come in with a comprehensive approach. So they look at the policies that the country has they look at government leadership, they come into, into the sector with strategies, use spatial plans. And with that, investment programs, they focus on great extension mean event as well as off grid. And then there’s also a clear emphasis on the sustainability of the whole sector, making as good as the country come. Introducing cost reflective tariffs, and or providing concessional financing or subsidies to create a sustainable financial situation. The bank is supporting this efforts and really have stepped up from an investment perspective. over the period of 2014 to 2017, we had about $2.6 billion going to energy access and with with a significant portion of that going to mitigate an off grid. And in fact, the mini grid upgrades are the largest and the fastest growing investment areas in our portfolio. So for us, just to make sure that we’re all on the same page, and meaning great for us is basically anything that is not the main grid, and even mini grids that are connected to the main grid, but have an independent legal entity or our legal entity. We also consider it as a mini grid or micro grid as it was called in other places. So, we have a very broad definition and we did that. We did that based on the latest developments in in the market where we now see that mini grits really can produce high quality service 24 seven and and 97% uptime throughout the years. Basically bringing me integrated in a position that it can provide a well run utility quality electricity services.
Unknown Speaker 12:34
So, why the bank is getting more and more into mini grits? It’s, it’s not because we like me integrates even though we do, but, but there’s a lot of economic reasons behind it. And the looking at the component costs. Data Use have come down dramatically over the last year in particular Solar PV systems, the batteries, but also the smart meters, as well as the introduction differ the introduction of their energy efficient appliances for the solar meaning bits itself, but then also in the ecosystem where at times a decade ago, meaning Chris had to be designed by multidisciplinary teams going into the villages, costing about $40,000 per Village. Today with a geospatial tools that can be reduced to about three to $4,000 per side. So this is a magnitude magnitude shift. And making the whole equation of me integrates much closer to to affordability in our client countries. We also see a lot of movement with
Unknown Speaker 13:56
Unknown Speaker 14:00
corporations, like the ones here mentioned on the screen, as well as utility to come in with me integrates on a portfolio basis, clearly moving away from one or two pilots at a time to now looking at portfolios of dozens, if not hundreds of meaning grids to, to roll out so so the overall picture is for us many greats are becoming more and more competitive from a costing perspective having significant increase in quality of service, service delivery. And we also now see the, the the rollout pace, being much faster than it used to be. We just came back from the commission of the first project in Nigeria, where the project itself was from groundbreaking to commissioning. Only took 62 days. So about two months to get Get it up and going. So, so, from that perspective, the bank is is looking into mini grids and how to support the industry from an economic perspective, but also from a solution perspective that can contribute to accelerating the pace to which universal access by 2030. So, in Ethiopia and other countries, we basically see to eco sensors to industries that are that are entering into the mini grid space. One is is utilities and in in each GOP you is really taking the lead there. They have started with their initial ice they had support from the Greene County government. Wait a minute grid just outside to the capital. And now implementing 12 minutes on their world bank funded program. And with the African Development Bank, there’s no additional 37 projects that then are preparing of this proposed program at Delhi. The author four and a million dollars will think support and there’s about hundred dollar $50 million that is earmarked for for demeaning good sector. And that could translate to somewhere between a few hundred to maybe up to 1000 minutes that can be supported on the program. And so in part that is where to national utility, important that will be with the private sector or combination of the two of them. So, I think this is in this in this slide. You see the difference? ecosystems and different stakeholders and the different institutional setups and regulations that will come into play. And, and this is very much an ongoing dialogue in Ethiopia, on how to how to design a program properly and, and maybe in the early stages will have two or three approaches in parallel to get the industry going, one with the utility and other with the private sector, or cooperatives to get to get the systems off the ground. So for us, and we really appreciate that every country is different and every country comes in with its own environment and its own priorities and decision making process. What we do know is that about eight to 10 issues or core questions need to be answered one way or the other. So a good example is always the setting of retail terrorists. In in some countries the answer to that is we’re happy to have cost reflective tariff in other countries, it’s, we want to go with a universal tariff. In both cases, design designs of many great programs are possible. It’s just that they need to be tweaked for these particular circumstances.
Unknown Speaker 18:29
So from a loping perspective, we’re quite active. As I mentioned before, we have now about 34 operations with many great components, of which about $700 million is coming from ADA and strap and other World Bank managed funds. Leveraging about a billion dollars from the private sector, government and development partners. We have another 14 operations in Preparation on the preparation, including the one that we’re discussing today in Ethiopia. So just to, to indicate here that, that this is not the first program, but that it’s and in that sense that we’re not alone in this endeavor, but we can really build on a lot of experiences that are happening in the world at the at the same time. Yes. So as briefly mentioned, so, have these eight to 10 issues. Let me just highlight maybe four or five of them at this stage, one aspect that that we’re looking at this is the business models. And I also briefly touched upon that in.
Unknown Speaker 19:54
In Ethiopia, we do have an
Unknown Speaker 19:59
environment Where we’re basically dealing with a closed economy that is starting to open up, and where the utility has played the key role of service in electricity service delivery in the country. So we have to work with the utility in order to get things going. at an early stage, at the same time, the utility as well as the government, as well as private sector and development partners.
Unknown Speaker 20:33
All are saying the same thing that
Unknown Speaker 20:36
we need to move beyond that. So either in a public private partnership with the utility, or by lifting some purely private sector led initiatives, or having a combination of of these three business business models in an early stage of the program, so we’re talking Is that true and we really would love to have your feedback on that as well. And if they’re creative ideas out there, this is a time to, to bring it forward. So that we can make it part of our preparation process, but also make it part of the investment program. If if that seems to be the way to go. The different models that we have different learning from in different countries, I will not go through it in great detail the slides will be available after the webinar, but just to indicate that, that there’s quite some experience out there that we can build up, build on in for for the Ethiopian design. So the second key point that we want to raise is that an integrated program without productive uses is basically a non existing program. We’re very outspoken about that, based on extensive work that we have done over the last years that a mini grid with only household connections with one or two or three light bulbs with a phone charger are much better off from an economic financial perspective, having these electricity services delivered with standalone solar systems, a location that is well chosen that has economic activities that a where want to have suppressed productive uses in these communities. And based on that the mini grid is coming into into into being as a much greater chance of overall sustainability in the long run, and this graph just emphasizes this that is the load factor of a media grid is is low, the gray area 22%. The LCP is 55 cents per kilowatt hour. But if the load factor is very high in the case of 80% with a, what we call anchor load for chocolate telecom tower or an irrigation system, and then the lcbo reduces dramatically to 35 cents per kilowatt hour, and these are the costs. So this is this is a system, the lcbo he’s mentioned here are without concessional financing or without subsidies. So, incorporating subsidies will bring the LCS he will bring the tariffs to a much more affordable level for 40 engineers. So in Ethiopia, we have started to We
Unknown Speaker 24:02
were building on, on several initiatives
Unknown Speaker 24:07
where the agriculture is looked at in in great detail. There seem to be a lot of momentum about around irrigation, and potential for introducing better irrigation systems and ridet. Moving away from a one, one harvest per season
Unknown Speaker 24:31
economy to maybe two or three times
Unknown Speaker 24:35
leading to Rural Economic Development. So the way we’re coming in at this is from an appliance perspective. And here you see this, the six sectors that together with a TA, the Ministry of Agriculture, Rmi and other organizations. We’re trying to bring These these sectors and now together and have a subset of appliances for each of the sectors been focused on to help create these economic development and productive uses. And with that the sustainability of the meaning grid. And appliances, even after the communities are sold on that is applying to need to come in, in many cases are too expensive, too high upfront costs for the end users. So the introduction of end user financing either through the mini grid operator or micro finance institutions or otherwise, is certainly also a major priority for for the program that we’re working on. So the third element for us is that we’re having the discussion with the government on is on the regulations and there, there’s a lot of lot of momentum. And this is just to indicate again that it’s much more a decision tree than and then coming in with a preset notion. And the overall consensus there again, is that there needs to be an a solution to the retail tariff that the universal tariff that is currently in place is very low. And that means that for an access program with meaning grids, that you would then need a significant amount of subsidies, or that the retail terrorists associated with the productive users or with me integrates can be different from the universal tariff, allowing for lower public lower involvement of public funding. So these discussions are ongoing and some of the draft regulations around mini grits are available with the regulator on the web pages and we’re going Now reviewing that, but we also would love the participants, if they’re interested in the GOP market to, to please also have a look at that and share their views on awareness should go. This is just to indicate that regulation should not be stagnant regulations, but that they really should grow over time with the grow of the meaning good sector. In the initial phase, maybe a little bit more open to allow parties to come in over time, with the number of people being surf, and more and more monopolistic behavior coming into the picture, the being a bit more detail oriented and rigorous. So this slide just on the access to finance just indicates what I just said before that with a relatively high load factor. The costs were Calm down, but then also if for example, we had a private sector lead component and a performance based grant introduced, then you can see tears coming down into the teams per kilowatt Pikia per kilowatt hour and making it affordable to a very large part of the population in Ethiopia. The focus of the program for now is proposed to to be on solar hybrid mini grids, not to exclude exclude other renewable energy meaning grits, but with the scaling that is happening now around solar mini grids, and the potential for cost reduction and for the rollout of portfolios instead of individual projects. We really think that this is where also the emphasis will come on the D autopia program
Unknown Speaker 29:04
to more. The geospatial portfolio planning that I already mentioned, is very much an ongoing process for each yoga. And here is an example of Nigeria where the government went through a similar program process, identifying on national level where it makes sense to have mini grants. In that case, it was 10s of thousands of mini grants and on economic parameters, bringing bring it a portfolio down to resulting in what is the portfolio with the best bang of the public buck in in the country. And then uploading this information on a platform that then can be used for either bidding out on their an EPC an O and M contract approach, or providing it as market intelligence to the private sector. can then choose their decides that they want to develop. The last slide is on the international and local industry that as mentioned that there is a big ask in the country to have partnerships. And we have also seen this in other places that with increased emphasis of the private sector and utilities, international utilities into the sector, there is almost a natural match between these parties who have a great understanding of the technology have access to to semi commercial and commercial financing. But they have and lacked the, the on the ground experience in the client countries and in Ethiopia. That’s that’s no different. So we see a great opportunity for partnership between the international local industry To help get the
Unknown Speaker 31:03
program off the ground. And
Unknown Speaker 31:08
just to indicate that a lot of these more generic lessons, we have recently documented this in our latest report on mini grids for half a billion people, so it’s available on our web page. And we go into a bit more of the detail around some of these issues that I just highlighted. And it also will help to, to to inform the dialogue in Ethiopia about the experiences in other countries. So maybe just to close off that we’re in dialogue also with the government about having a national events around mini grids in February, February 13, and maybe two days for 1314, or forever at 12 and 13. But this is just too To bring this to your attention that as mentioned, this is an ongoing dialogue. And we very much would like to have you there as well. The invitations will go out shortly. And we’ll make sure that if you show interest through the chat, and that was to share the invitation with you. So without Bill and I have lost track of time, I hope I’m still okay. With that. Let me hand it back to you.
Belén Gallego 32:33
Thank you very much, john, if I can just ask you to stop sharing your screen and I would also request if you have the link to that to the mini grids for half a billion people you can really put it in the chat so that people can you know, just download it directly because I think I mean it’s a it’s a large document but it has a lot of detail. You know you need any further it’s definitely there. So thank you very much john. Income going to now as if you please You shared your screen, as I predicted, because I knew this john was going to go over time, but you still have your 15 minutes. So don’t worry, we still have 10 minutes or so for questions for questions thereafter for to answer questions. So what hadn’t read you, and we can see your presentation.
Unknown Speaker 33:19
But that’s fantastic. So I’m going to complement what john has spoken about, and come in with the gender lens, because I think we’ve really started to realize that we’re making big investments in sectors we’re building human capital, and we know that their poverty reduction elements to this work, but unless specifically looked at, we don’t often reap those benefits. And just like Yon said, we have no way of saying these are all the models, we really, really would like to leverage all the expertise in the room. And yet hear from you in terms of what you think works, what’s practical, because we also Know that many grid developers, utilities and other stakeholders are under, under extreme, they sometimes in challenging situations, so so we hear that as well. So I’m going to be focusing on closing gender gaps in many grid sector, with the focus on what we’ve done in Ethiopia, and other countries as well. And we basically, if we don’t do anything around this issue, we’re going to wait another 217 years, and that doesn’t seem to fund. The World Bank focuses on these issues for three reasons we believe it enhances development outcomes. So if we’re talking about a mini grid, for example, we want to have our users be as productive as as possible. So they are actual, you know, they’re, they’re bringing goods to market, they’re transforming their lives. And then we also think there’s a moral imperative to this work. Sometimes we don’t have the business case, for instance, on working on women’s employment and talent management issues. When you don’t have positive balance sheets at a utility level. And then in terms of risk management, and this is particularly important for many grids, depending on the size is that you often bring in external labor. We’ve had a lot of reflection at the World Bank in terms of gender based violence, and the power dynamics between laborers that might not be from that community or people from the community who will now be earning cash income, there are issues around prostitution, there are issues around pregnancy, and there are issues around sexual harassment. So these are issues that we’re actually going to be have already started working on in terms of the mini grid work in Ethiopia, that’s coming down the pipeline are being developed right now. So we have a lot of countries in the world. There’s not one that’s gender equal yet even Iceland and and Norway, are struggling to, for instance, reduce pay gaps for equal work. And we know that there are really big investments in the energy sector, happening every every year. In the trillions, for example, in 2018, and the argument we put forward is that when there’s money, and people involved, there’s always opportunities to address address these issues. We also know that there’s a real business case to looking at these issues in terms of GDP growth. And we also know that there are, you know, you’re not harnessing your full talent in terms of when you make investments in female engineers, and then they graduate and then they go to institutions and businesses that don’t take them seriously. Don’t think they’re a valuable asset, etc, and and retain them and then they go to health and education. So we think this is important to look at, in terms of what many grids has to do with gender equality. This is often spoken about, but we know that there are time and drudgery elements to energy services, and those fall on women. So if you’re talking about mills and blenders and refrigerators and also complementary technologies around electric stove, etc. You can see two to three hours of time saving and then the non tangibles are really drudgery, which is basically or your life is, is tough, and you’re using technologies that have been around forever. We also know from studies in South Africa, Nicaragua, Guatemala that we have women entering the labor force at higher rates due to electrification. So of course, this links to the time and drudgery discussion around agency and voice, you have a lot of opportunity in electrification committees to make sure that women are represented and we’ve found endlessly that if we don’t kind of nudge for this participation, we we see men setting priorities around planning, who should be electrified, what services matters. So you might be missing out on a woman’s group that is producing soap or clinics that might be off the beaten track and are not being prioritized a water pumping, etc. And then around safety, so women have different safety. needs to men, and might think that public lighting in markets or certain streets is more important. And therefore, it’s important for many grid developers to really have that conversation.
Unknown Speaker 38:11
Just a quick summary of what we do. We work on addressing data gaps, and I’ll speak to some of those and how they relate to the mini grid sector. We try to push new research forward. So work we do on geothermal, and various other issues. And Yon and I also work together on the mini grids handbook. Then our main focus is actually sitting with teams and clients and working on the operations. Over $4 billion of investment went to board or were proved last year and then in 55, actually 61% of those projects, we worked with clients on addressing gender gaps and that’s, that’s exciting shift for us and we no longer really talk about mainstreaming we really try talk about jobs intrapreneurship skills developments And assets. And then we also try to build partnerships. Our main clients, as young already pointed out on our utilities and ministries and development banks, but we also like to partner with with CSOs and various partners on the ground. Over the last few years, we’ve worked in about 94 countries. The work is focused on various issues depending on the needs of those client countries. And in Africa, of course, that’s very focused on the access agenda. In Latin America, we were looking at the sticky gaps and labor force participation and fostering talent. And in the six countries around geothermal, you’ll often need two to three people managing a geothermal plant and then you can put investments in to really bring women into the sector and make sure that they have the skills and feel feel welcome in that space. And these are some of the some of the areas We work on so we work on off grid, clean cooking. women in science, technology, engineering, mathematics. And we do a lot of work on data because that’s all. We have a lot of fun with that. So coming to Ethiopia, we’ve been working here for the last three and a half years, we basically came in and spent a year mapping all the gender gaps that could relate to the energy sector. We, for instance, found that there were only 10% academics, female academics in the sector. So we know that role modeling has a huge influence on where you see yourself in your life. If you can’t see it, you can’t be it. We also saw that there were a lack of childcare provisions in the energy sector. We knew that they were no sexual harassment policies in place at the utility level and safe transport and toilets and facilities. So what we decided to do under $2 billion portfolio is to really engage stakeholders and put in place tangible actions Under 370 $5 million electrification program and as john mentioned, they are awesome mini grids under that.
Unknown Speaker 41:08
And all of that was bundled up with technical support or so to the national electrification program, which they are two parts of one was on grid, and one was off grid. So on the on grid side commitments were made in terms of getting from a baseline of 20% female employment to 30%. That was a national target set. So we came in with financing and technical assistance to make that happen. Some of the work we for instance, have done is to ensure that this scholarship program available for about 44 female employees of the utility that has a 22,000 employees, so it’s across 11 regions, it’s really extensive that they can get master’s degrees because we can see that women have lower educational attainments and therefore they cannot progress in their careers. We also put in place support in terms of financing for short upskilling programs and and Bunch of programs between universities and the utility, we see that there’s really that lack of the exchange on what what are the sector developments? What are the potential areas of opportunities in terms of career journey. We’re financing childcare provision in all 11 regions, lactation rooms, nurses, etc for for children. And this, of course has benefits for both male and female employees. We’re also working on sexual harassment. So there are policies in place there are repercussions if codes of conduct are broken. And this is really important to retain talent. We’re also working on female entrepreneurship and off grid sector. But there’s also a story link below. And you can have a look and I’ll try weave it into the further points that I that I raise. So looking at the mini grid sector, we’ve kind of maps areas where they are entry points. So you can think about that. The owners of a company you can think of the employees, you can think about the managers, you can think about the customers, you can think about the government, you can think about the value chains and the suppliers, you can think about access to, to finance. And all of these have have ended I mentioned. So I’ll briefly be running through some of these areas, starting with policy and procurement. Moving on to what’s possible on the business models, looking at institutional footprints, customer engagement, and the consumer finance models and then productive uses of energy, and monitoring and evaluation. And again, this is not an exhaustive list. In many ways, it’s been kind of hard for us to document best practices in the mini grid sector. So we welcome opportunities and you sharing some of that because often it sits with people and it’s not published. So policy and procurement I’ve mentioned that we put in place really tangible language, and the National electrification program with the government on the on grid and off grid sector. And that was commitments on employment addressing issues around affordability and access to finance. Investing in skills development, you know, we’re going to be building mini grids. So how are we going to make sure that all that cash income is not going to just land in the hands of men, especially when you’re in rural context where you’re starting with a with a low skill set in any case. So we in the rise in the rise report, which is our regulatory indicators for Sustainable Energy report, we’ve been mapping what governments have actually been doing in terms of looking at gender specific regulations and electrification planning. And unfortunately, there aren’t many best practices. So we have some work and allow where female headed households were lagging behind and connection and they were targeted, with the provision of being able to pay off that connection fee of a time We’ve got some work in Tanzania. And then if you guys manage so the recommendation here is really try involve diverse groups. In terms of female Business Association, agricultural cooperatives. In your policy formulation, they might have very different visions and ideas and what matters. Then in terms of procurement, we’ve got the example from South Africa, which of course can can be debated a lot in terms of what the unions think what the private sector things etc. But non price factors were embedded in the independent power procurement process in terms of female owned companies, and then also in terms of the social benefits that should be reaped from from the work.
Unknown Speaker 45:42
Then in terms of your mini grid business model, we don’t know which direction we’re going to go into Ethiopia. But we’re already working on making sure that you know when we’re doing our market analysis, and we’re doing our studies around productive uses of energy that we have minimum collect sex disaggregated information That we make sure that our marketing and our outreach activities really ensure that they reach both women and men. We know that people have different aspirations. And we need to market for that. And then of course, many developers have an incentive to enhance woman’s participation given their role as energy managers at the household level. Then in terms of also employment, we know that many grid companies have a footprint of employees. So we’ve had, we’ve been doing a lot of data collection. And you can see, this is not all this is not related only to the mini grid sector. But we’ve been trying to work with companies around the world to look at the technical staff, the non technical staff, and where they’d like to go in terms of the percentages in terms of participation, etc. recommendations on this is really what we’ve been doing a deep dive on NFLPA is look at the education sector. Work on the school to work transition. So, you know, we’ve been trying to we’re about to launch a video on Ethiopia where we look at role modeling, you know, what the issues are in the sector. And then issues around paid family leave, mentorship, etc. So really how is your company messaging in terms of what the values are, and the policies on diversity. This is an example from the Solomon Islands on woman’s employment where there are many grids. This is almost a rural a, a, you know, you’re working on on low skilled jobs too many to large extent, but there’s still economic opportunities in terms of cleaning large solar panels. And the ideas came from the transport sector, which often does very large public works programs. So this has been fantastic work to see go forward and it builds on the partnership with the Pacific. Perfect power Association. So in the previous slide I mentioned the data on that that has been
Unknown Speaker 48:06
has been collected by our team.
Unknown Speaker 48:10
Customer Engagement and consumer finance models, it’s important to know what the affordability constraints are, and who’s connected and who’s not at this point. So we’re lucky to have the multi tier framework and for instance, in Rwanda, we see that female headed households lag lag both on grid access and off grid access, drivers of that often affordability constraints, lack of awareness about the connection process. You know, not enough education around the benefits of access so many grid developers should draw on this kind of data and look at both, you know, the willingness to pay and then the affordability constraints. There are also different options in terms of structuring the consumer finance models. john mayer Some of these already subsidies, credit schemes, ready boards, smart end to end operations. So all of these really need to consider that women have less access to finance. they borrow less formally. And they face various constraints. So taking the credit line and Ethiopia, we found that this is for the off grid sector that men were borrowing at higher rates overall. So at about about 72%, and women at about 28% of that access to finance and they were borrowing for bigger systems for solar home systems. But then we saw the gap closed for lanterns. And again, this brings in the question of, once you go into community have these issues in mind and try work with microfinance institutions or development banks to really look at those end user needs. On productive uses of energy. We know that women tend to be less productive if they Our farmers, there are various drivers on that in terms of smaller plot sizes, crop choices, mobility constraints, and then norms around the sectors that they find themselves in. So as a mini grid developer, of course, this is not only a responsibility, but as a utility. And if you want to enhance development outcomes, you should be aware that you might see those differentials and you’re going to have them even more exaggerated if women can’t connect up front to, to the mini grids. We have work here in Nigeria, we’ve made a commitment to enhance productive uses of energy for female headed businesses and female farmers by 5%. We set this target based on the fact that we knew that the productivity gap was 18.6%. And we’ve put in place technical assistance of 400,000 to really look at these agro processing dynamics. Moving to monitoring and evaluation important really for us in our projects is to set targets because what is measured can’t get done. So these are just some examples, you could look at the productivity gaps, or you could look at issues around training opportunities, you know, gaps in women’s employment, you could stop publishing data on this, and setting targets. So these are just some suggestions. And I will stop there just to say that there is a team behind this. And we look forward to really under Adele shaping this agenda and taking it forward from honored to off grid.
Belén Gallego 51:37
Thank you very much. Inka. Thank you very much. I’m just going to ask you to stop sharing your screen so that we can now see you both and we don’t have a lot of time. I think the good thing is that we’ve got a lot more detail perhaps that we were planning to originally you know, with short presentations, but this is really interesting. There’s been a lot a lot of questions. There’s so many of them, that I have kind of like picked Few of the topics that repeat themselves, and I’d like to ask you, we only have about five, six minutes Really? And then we should, you know, stop for today. So, you know, if you you want to answer, you know, you take your returns each of the questions and we’ll see how far we can get. So one of the questions that was coming again and again is what is the minimum viable capacity or like, you know, total, the mini great is usually, you know, whether, you know, what is considered a micro really was considered a mini grid, what are the ranges? So, can we clarify that so that people understand, you know, john, do you want to take the question here.
Unknown Speaker 52:42
So, I think I’m the terminology micro grid or meaning grid for us, we we use them both. And what we see is micro grids is typically used in OECD countries meaning creates is used in our client countries, but it’s it’s not defined by from an engineering perspective, so it’s not like a five kilowatt system as small as a micro grid, five kilowatt and larger is a mini grid. So, so we use them both. And then on the viability I think today, what it really comes down to is that it’s not a size matter, or 40 minutes, you can have ones that are as small as just providing electricity to maybe 50 or 100 hundred clients up to hundreds of thousands of clients, for example, we’re seeing now in DRC, but it’s very much the focus is on that the right locations are selected. And that with that, with that also the productive uses is is is promoted and based on that the viability of the individual projects as well as the portfolio. Dan comes into into being
Belén Gallego 54:00
One of one of the questions let me ask first a technical thing and someone was asking you know, you you actually don’t mention storage in the drawing that you had its storage considering these mini grids and or not and everything’s renewable by and large just so that we can also
Unknown Speaker 54:20
so again, it’s driven by the economics. So many greats in the past used to be diesel based and in some countries run a river hydro base in a Paul and other places are today with the cost coming down on the solar side, it pushes out the diesel fuel costs. It’s it’s cheaper to invest in the solar panel than to buy your diesel fuel for example. And then now with the batteries cost coming down, it becomes a hybrid system where the solar electricity is produced during the day starting in the batteries and then for the beacon around six or seven o’clock at night, you then have a bit of diesel backup system. So it’s very much to show our battery system with some level of, of digital technology. So this
Belén Gallego 55:14
is back, okay. Just one more along the lines of the technical side, why pick mini grids and not home kits? Like what is the reasoning behind going down this line rather than the other,
Unknown Speaker 55:28
its consumption. So if if a home or an end user is just using or has a need, and the electricity demand for that are small, so for lighting for charging, maybe for a radio, then typically a solar home system is a better solution from a financial and economic perspective. However, when you start to introduce larger loads like power tools, Welding machines refrigerating large scale ventilation for storage. And then it makes much more sense to go with, with a mini grid in comparison to a standalone system. But But these these, these two areas have have some, some overlap. But that’s the rough division.
Belén Gallego 56:27
So the work of a bunch of questions about SEO and how this is going to come down and you had an assumed decrease in SEO we that was significant from 2018 to 2013. The question is really what is driving that? That dropping SUV?
Unknown Speaker 56:43
Yeah, so it’s, it’s a combination of all these factors. So one is that with the introduction of, of the solar hybrid mini grid, now, you have a unique opportunity to also introduce your electric appliances. So if that is done as part of an National Program. If that if that is done with a focus on energy efficient appliances, then you already save on the invest investment up front. So for example, a lot of the appliances today have 50 to 60% less energy consumption than they had five to 10 years ago. So using those appliances in and designing your mini grid for dabbe now reduces the investment cost for you mini grid by more than 200%. So that’s the starting point. And then on top of that, you you have to the reduction in the components, the solar PV systems as managing the battery costs, the energy management systems, which includes the controller and the inverter, the smart meters, and all of that is, is dramatically the costs are dramatically declining. Not necessarily by the success of the mini grid sector, but by the success as elsewhere solar PV utility scale is driving the cost down for PV batteries are driven bound by the automotive industry. So and the energy management systems, for example, are very much enough of what was used with the variable renewable energy like wind in for large projects. So, so that’s that’s what is driving these cost reductions. And then also what as mentioned, is the whole portfolio approach where the now to do spatial planning upfront. In the past, significant investments had to go into that sometimes as high as the cost of the investment themselves. That now also can for about 95% can be done behind the desk rather than having to go into each face to face you. individually. So that’s, that’s what driving
Belén Gallego 59:05
hope that also, you know, financing costs will come down over time for house agent with local banks. But I can understand that at least the components in that part is is is slowly coming down. Yeah. All right. One thing about local skills, a lot of people here are saying, you know, you know, even if someone else comes and builds it, you know, we still need local know how upskilling and you know, I think Lincoln was talking more along those lines, you know, with agenda item or like thing included as well. But, you know, this is really how is it going to do knowledge transfer going to happen, you know, what, how does that happen? So, I don’t know whether either of you want to talk about this?
Unknown Speaker 59:45
No, I think so. Let me kick it off. And then it’s exactly also what I was saying. There’s a very big gender element to that but so, so one is that there because these these projects, are so. So community client focused, that if you don’t have the proper buy in of the local communities and the potential customers, lessons I’ve learned time and again, that you’re just setting yourself up as an investor as a developer or as a national program for for failure. So it’s very important early on that this local buy in is there. And and with that, the local industry plays a critical role, simply because in many cases also in Ethiopia, they have been on the ground for for many years. So that’s very important. And I think also what we’re seeing and Inka can build on that is expanded this is that we’re seeing that where, where women are involved the viability of the project. goes up from, from a financial economic perspective, but also from a sustainability perspective in relation to productive users in relation to handling of financial matters. There’s a, there’s a lot of evidence that making that part of an overall design is is essential.
Unknown Speaker 1:01:27
Great, yes. So one of the big challenges also for us has been to map both the providers of upskilling by the university and small the technical training institutes and then at the same time to build the HR systems in in the utility and to look at the skills in the private sector, both internationally and locally. We like to segment with us in terms of really high skilled and then more vocational training. So we are currently in the process of working on that in terms of the the mini grid sector but we’ve we’ve been doing a lot of that work for the utility itself and the broader energy energy sector. So really again thinking about recruitment retention promotion, and making sure that also the sector messages in terms of new developments and market opportunities and building good HR systems which are not digital etc.
Belén Gallego 1:02:31
Thank you very much. jonica and unfortunately we are the end of an hour we had so many questions we haven’t really been able to get on you know with them but I mean, we knew you know, time is limited. There has been a lot of interest as you can see from from the chat from the questions. So I will run Crisco DNS mob is constantly working in this topic. You know, you have so much intelligence out there, you know, visit the website, by all means, and those people that have signed up also will receive information about the event that we are planning Well, you guys have planning in in December. So anything else you guys to add before we say goodbye?
Unknown Speaker 1:03:07
Well, I’m really I’m seeing all these comments and questions coming in, we’re really going to take them seriously. So I don’t know if we can promise that we will answer all of them individually. I am now I’m inclined to say yes, but I think reality after the webinar might be slightly different. But we’re definitely going to look at all of them. So thank you so much for for going those feedbacks.
Belén Gallego 1:03:32
Thinking nice evening. Can you have anything to add?
Unknown Speaker 1:03:35
No, we’re always available. happy to hear any sort of knowledge and developments on on gender and many grids. Because, yeah, that would be fantastic to know more about.
Belén Gallego 1:03:46
Right. Well, thank you very much. We’re going to say goodbye for now. And we’ll see you hopefully in the next webinar, or maybe in the event in Addis Ababa. Thank you very much.
Transcribed by https://otter.ai