Engaging different categories of social finance actors to address effects of climate change 1.6.2012 INAISE, Paris Dr

1. Engaging different categories of social finance actors to address effects of climate change 1.6.2012 INAISE, Paris Dr. Annemarie Goedmakers CEO/Executive President

2. An introduction to FRES • Providing energy services in rural areas in developing countries • Focus on electricity for households & small enterprises • Starting up small scale electricity companies • Commercial & sustainable approach • Objectives • 55.000 customers in 2016 • 100.000 customers in 2020

3. Why rural electrification? • 1.6 billion people worldwide do not have access to electricity • Figures for Sub-Saharan Africa • 585 million people without electricity • Rural electrification rate: 14,3 % • Expansion of the public electricity grid is too expensive • Lamp oil & candles • Do not supply enough light • Have a harmful effect on people & environment

4. Effects of rural electrification • Economic • Stimulates local economic activity • Expansion of production capacity of local companies • Transfer of knowledge how to manage companies (financial & organizational) • Social • Brings light to schools, hospitals & homes • Improved access to communication and media • Health & safety • Reduction of health problems caused by smoke or used batteries • Reduced fire risk at home • Greater safety on the street thanks to public lighting

5. Solar Home Systems (core product) • For households & small enterprises • Access to energy in remote areas • Cheaper per lumen or kWh than candles, lamp oil, and car batteries • Quick installation & removal • Little maintenance • No emission of harmful substances

6. Solar Minigrids (applied in specific cases) • For higher energy requirements • For households & small enterprises • Advantages of power generated by a solar plant: • Little maintenance • No emission of harmful substances • No dependence on diesel import & unstable diesel prices

7. Fee For Service • Customer pays a monthly fee for access to electricity • Fee depends on the service level chosen by the customer (number of light bulbs & power points in the house) • Similar cost level as the traditional, polluting resources (candles, lamp oil,…) • Advantages: • Low initial investment for customer (entrance fee) • No unexpected costs for installment, maintenance and replacements • Service & payments in local energy stores

8. FRES in South Africa • Local company: NuRa • Year of foundation: 2001 • Concession area: Kwazulu-Natal • Number of customers: 13,619 (March 2012) • Products: SHS & LPG • Target: 29.000 customers in 2016 • Employees: 83 • Energy stores: 13 • Funded by the Dutch Government, Nuon, FRES and the South-African Government

9. FRES in Mali • Local company: Yeelen Kura • Year of foundation: 2001 • Concession area: Sikasso and Segou • Number of customers: 4.002 (March 2012) • Products: SHS, minigrids • Target: 10.028 customers in 2016 • Employees: 39 • Energy stores: 15 • Funded by the Malian and the Dutch government, Nuon, EDF, and FRES

10. FRES in Burkina Faso • Local company: Yeelen Ba • Year of foundation: 2008 • Concession area: Kénédougou • Number of customers: 799 (March 2012) • Product: SHS • Target: 4.500 customers in 2016 • Employees: 16 • Energy stores: 5 • Funded by the EU, Nuon and FRES

11. FRES in Uganda • Local company: FRES Uganda • Year of foundation: 2010 • Concession area: Mbarara, BushenyiRukungirui and Mpigi • Number of customers: 57 (March 2012) • Product: SHS • Target: 6.000 customers in 2016 • Employees: 10 • Energy stores: 1 • Funded by the Dutch and the Ugandan government, Nuon, FRES and StichtingDoen

12. FRES in Guinea Bissau • Local company: FRES Guinea Bissau • Year of foundation: 2011 • Concession area: Gabu • Number of customers: 0 (March 2012) • Product: SHS • Target: 3.500 customers in 2016 • Employees: 1 • Energy stores: 1 • Funded by the EU, Nuon and FRES

13. FRES business model • Standardized • Focus on specific target groups • Replicable in many countries with only minor adaptations to local situation • Economy of scale • Low financial impact on clients

14. Partners and modes of intervention • Donor organizations: provide funding for the initial investments needed • Public authorities: facilitate the implementation of activities in their countries and support with favorable taxation and expertise • Private companies: offer sponsoringand provide specific expertise for free • Universities and Technology Institutes: provide students, research methodology and innovations • Non-governmental organizations: provide funding and assist in implementation of activities in the field

15. Nuon-DGIS-FRES PPP (public private partnership) • Partners: • NV Nuon (private funding partner) • Dutch Government (DGIS) (public funding partner) • FRES (NGO: executing partner) • Aims: • accelerate reaching objectives of DGIS and FRES • increase impact of funding • shared knowledge and responsibility • Problems: • public partner decided not to be a member of the supervisory board • difference between agreed objectives and reality in the field • “cultural” misunderstandings • legal constraints in way of funding for public partner • mistrust

16. Lessons learned • Understand each others interests and limitations • Trust each other • Theory and practice differ • Activities to address MDG’s are not profitable on a short term • Rural electrification in developing countries is as expensive as in developed countries • Renewable energy sources need high upfront investments

17. Annual Report • FRES publishes an annual report on its • economic • environmental • social • governance • financial • performance according to the guidelines of the Global Reporting Initiative (GRI C level ) and the “Transparent Price” .

18. Why essential? • Accountability and transparency • Quantifies impact on MDG’s • Enabling external stakeholders to understand FRES’s true value, and tangible and intangible assets • Increased understanding of risks and opportunities • Clarifying links between financial and non-financial performance • Benchmarking FRES companies • Comparing performance with other NGO’s • Sector (rural electrification) benchmarking • Demonstrating influence on (combat against) climate change

19. Partners