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Road Map and Investment Financing Prospectus

Road Map and Investment Financing Prospectus. Peter Hoogland, November 22 2013. PRESENTATION OUTLINE. What is the Road Map and Prospectus? Why is it important? What are the components of the Road Map and Prospectus? What is our approach and process for its development?.

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Road Map and Investment Financing Prospectus

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  1. Road Map and Investment Financing Prospectus Peter Hoogland, November 22 2013

  2. PRESENTATION OUTLINE • What is the Road Map and Prospectus? • Why is it important? • What are the components of the Road Map and Prospectus? • What is our approach and process for its development?

  3. What is the Road Map and Prospectus? The Government’s vision, development priorities and target outcomes for achieving universal access by 2030 • Universal access to electricity by 2030 Goal • Clear targets, intermediate goals and milestones to measure progress • Integrated, sector-wide approach (grid and off-grid) Path

  4. Why is it important? Road Map and Prospectus It’s all about realization… Many Players One Team One Plan Actions Vision Sector wide least cost plan Institutional Framework Universal Access by 2030 Sustainable Financing Package

  5. What is the content of the Road Map and Prospectus? • Government’s goal and targets • Geospatial rollout plan for the distribution network What infrastructure needs to built to connect all customers at the least cost? • Technology options for grid extension and off grid • Locations and number of households requiring connections • Least-cost priority order for new connections • Total costs (investment and recurrent) This is the work being done by the Columbia University team

  6. What is the content of the Road Map and Prospectus? • Required institutional framework …delivering the right • Policies • Regulations • Implementation arrangements • Business models for service provision It defines • Roles • Responsibilities • Accountabilities… We will discuss this further this afternoon • A sustainable financing platform and a bankable prospectus These last two tasks are being carried out by the Castalia team

  7. What is the content of the Road Map and Prospectus? • Technical assistance and capacity building plan to ensure successful implementation of the program: • Delivering the program is a step change in capacity over current connection rates • A results monitoring plan to track, measure and update the program • How are we tracking against the targets? • What lessons are we learning? • How do we update the program?

  8. What is the Investment Prospectus? 2. Investment funding requirements for each year of the rollout program and the potential sources of funds? 1. Projects – from rollout for 2015 to 2020 3. Financing gap – how to cover the gap between costs and revenues 4. Syndication of financing – grants, loans, government budget, equity, and technical assistance

  9. Funding requirements The funding for the capital investment and the required technical assistance will be large. Potential sources are: • Utilities • Government • Private sector • Donors This funding will be determined in consultation with stakeholders

  10. The financing gap Revenues include connection costs and tariff income Costs include recurrent costs and any cost of capital Significant increases in electric access have not been achieved without some Government support to bridge the financing gap

  11. Bridging the financing gap The options for bridging the financing gap are: • Government budget funds • Donor grants and concessional loans • Cross-subsidies within the sector • Cross-subsidies from outside the sector

  12. Government financial support • Commercial Viability • Service providers (public or private) must be viable for the rollout to be sustainable • Customer Affordability • Electricity must be affordable to all for universal access to be achieved The government must ensure both commercial viability and affordability for success…

  13. Examples from other countries Kenya Investment prospectus includes a sector wide approach Distribution investments are linked with generation and transmission

  14. Examples from other countries Investment prospectus includes a sector wide approach Rwanda Generation, transmission, and distribution costs are all part of the total investment plan

  15. Our approach and process The Road Map and Prospectus is the Government’s plan . The Government heads a collaborative and evolving process Goal and targets Develop least-cost roll out plan Develop institutional framework Develop funding requirements Develop financing framework

  16. Summary Two key messages, the Roadmap and Prospectus is more than a plan…. • Integrated sector wide program—not just a list of individual projects • An action plan with enablers that ensure the realization of the vision of universal access Many Players One Team One Plan

  17. Contact us • 36 - 38 Young Street • SYDNEY 2000 • Australia • T: +61 9231 6862 • Peter.Hoogland@castalia-advisors.com • www.castalia-advisors.com

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