South Africa’s Lighting Revolution

2. South Africa’sLighting Revolution 11 July 2000 Barry Bredenkamp & Bob Price Bonesa

3. Agenda South Africa – General Background South Africa – Electricity Sector • Programme Description • Public Education • Residential Sector • Commercial and Government Sector Questions and Answers

4. Hello from sunny South Africa – the beautiful rainbow nation. Join us on our journey through the tunnel of light Hola desde la soleada Sudáfrica – la her-mosa Nación arco arco iris. Únase a nosotros ennuestra jornada a través del túnel de luz. Zdravime Vás ze slunecné jizni Afriky – nádherné zeme duhového národa. Pripojte se k námna nasi ceste svételnym tunelem. Greetings

5. Üdvözlet a napfenyes del-afrikabol – a különleges szivarvany nemzettol. Csatlakozz hozzank utazasunkon a feny alagut jan keresztül. Pagbati mula sa maaraw timog africa-ang bansang bahag-hari. Samahan po ninyo kami sa paglalakbay sa daan-yungib nang liwanag. Sveicieni no saulainãs dienvidãfrikas – burvïgo varanïksnu nãcias pievienoieties mums ce4oumã cauri gaismas tunelim. Greetings

6. Afrikaans: Hello English: Hello Ndebele: Litshonile / Salibonani Xhosa: Molo / Bhota Zulu: Sawubona Sepedi: Dumela / Thobela Venda: Ndi matseloni Sesotho: Dumela Tswana: Dumela Swati: Kusile Greetings from South Africa Hello !

7. ESKOM76% IFC/GEF24% ELI Shareholding & Funding Structure ESKOM100% EdisonPower 100% ESKOMEnterprises 100% Umongigesi 50% KareboInvestment Holdings 50% TSI 45% Africon 26% UmongiKarebo 29%

8. Statement Ms. Phumzile Mlambo-Ngcuka Minister of Minerals & Energy The Efficient Lighting Initiative – aimed at reducingelectricity demand, increasing efficiency andreducing emissions through the promotion ofCFLs in South Africa – will providereal benefits to the country.

9. Black White Coloured Indian South Africa Geography and Population • 1.2 million km2 • 43.3 million inhabitants

10. South Africa Economy and Wealth Economic data • GDP $133 billion • per capita GDP $3,166 • GDP growth 0.5% • unemployment rate 30.0% Economic inequality • wealthiest tenth owns ~50% of assets • poorest tenth owns ~1.5% of assets • split is largely based on ethnicity / race

11. Electricity in Residential Sector 70% of households are electrified • up from 30% in 1990 • government promises to electrify 300k more households per year into future Distribution • Eskom 20% • Municipalities 80% Payment method • pre-pay 40% • credit 60%

12. 1999 Electricity consumption by sector Other 200 Residential Commercial 150 Industrial/Mining Redistributor 100 GWh (000) 50 0 Eskom Redistributor* Electricity Data • 1999 Capacity 40,000 MW • 1999 Generation 193,000 GWh

13. Residential Sector Barriers Awareness is low - if educated about CFLs, people like them Affordability is essential - the current price, R30 - R80 deters purchase Accessibility is low - more stores must stock CFLs Acceptance is high - people like the shape, size & colourbut quality control is unknown

14. Acceptable pricerange 100 80 60 Good Buy Cheap 40 Expensive Too expensive 20 0 >R5 R10 R15 R20 R25 R30 R35 R40 R45 R50 R55 R60 R65 R70+ Price Sensitivity - LSM4 Opinion Survey

15. Customer: short pay-back • Eskom and other utilities • meets IEP target of 820 MW by 2019 • improves public/consumer image • recoup costs/losses through surcharge? • Environmental savings • water 29 giga-litres • CO2 22 mega-tons Benefits of ELI • Society: Total Resource Cost = R495 million

16. 600 500 National Cash Flow Avoided Costs Programme Costs 400 300 200 100 0 -100 -200 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Total Resource Cost Benefits All figures in millions of South African rands

17. Our Key Objectives Short term: 3 years • 1,5 million CFL’s in three years • 150 000 school children educated • 3 000 new CFL retail outlets • Reduce retail price to between R15 and R30 Long term: 20 years • Capture one-third of the lighting market • Approximately 34 million by year 2019 • 810 MW peak demand reduction Affordable electricity services to all

18. Public Education ELI Advertising Campaign • utilise above & below the line advertising - co-opt manufacturers’ ad spend • develop “ELI-certified” logo • provide information about CFLs’ financial, economic and environmental benefits

19. Public Education Schools, Colleges and Technicons • develop & disseminate educational materials • hold essay/art competitionsand professionaldesign competitions

20. Residential Lighting Newly electrified & new RDP homes • provide energy efficient fixtures with new electricity installations and couponsfor lamps • incentivise retailers in newly electrified communities to stock efficient lighting products

21. Residential Lighting Expand traditional retail channels • increase sales of CFLs & luminaires through a wholesale/retail subsidy • act as a broker forretail outlets thatwish to carryELI-qualified lamps

22. Residential Lighting Create new channels by providing: • links to CFL manufacturers/distributors • short-term product subsidies • inventory finance to stock CFLs

23. Residential Lighting Develop consumer CFL financing by: • establishing model transactions with financial institutions • pre-payment vendors (PPVs) stock ELI-approved products • PPVs offer financing & collect via bill/tariff • utilities aggregate payments & repay loan

24. C/I/I Sector Commercial & industrial programmes • arrange bulk purchases of ELI products • certify entrepreneurs as lighting installers • develop financing for lighting upgrades& product distribution

25. C/I/I Sector Government partnerships • help create initiatives that incentivisegovernment agencies to invest inlighting upgrades • fund model Energy PerformanceContracting transactions • conduct street/stop light demos

26. Budget Administration $ 560,000 Evaluation $ 620,000 Public Education $ 2,600,000 Residential Lighting $ 4,500,000 C/I/I Lighting $ 970,000 TOTAL $ 9,250,000

27. Questions & Answers The formidable task of providinghigh-quality, low-cost lighting services to South Africansnow has a solution.