ENHANCED IMPLEMENTATION AND OPERATIONALIZATION OF EAPP CC & IRB: A Royal Government of Norway financed project K

1. EASTERN AFRICA POWER POOL ENHANCED IMPLEMENTATION AND OPERATIONALIZATION OF EAPP CC & IRB: A Royal Government of Norway financed project KICK-OFF MEETING 24th August t2012 Addis Ababa, Ethiopia Eastern Africa Power Pool

2. Enhanced CC & IRB Operationalization Outline • The Context • 1.1 The power pool: Institutional setup & Objectives • 1.2 Trade and infrastructure: Existing & Future • 2. Background • 3. The Program • 3.1 Goal • 3.2 Purpose, • 3.3 Activities. Eastern Africa Power Pool

3. Enhanced CC & IRB Operationalization • 1.1 The Power Pool • Established in 2005 • 9 countries & 12 utilities • A special arm of COMESA [ Egypt Libya South Sudan Ethiopia DRC Tanzania Potential Members: Djibouti, Uganda, Eritrea, Somalia, and South Sudan Eastern Africa Power Pool

4. Enhanced CC & IRB Operationalization 1.1 The Power Pool Contd… EAPPObjectives • 1.Secure power supply for the region’s countries • 2. Optimize the use of energy resources through investment • 3 Increase power supply and hence access in the region • 4. Reduce electricity cost by interconnection & power trade • 5. Provide efficient coordination in power production, transmission& trade • 6. Create a conducive environment for investment • 7. Facilitate the development of competitive electricity market Eastern Africa Power Pool

5. Enhanced CC & IRB Operationalization The Power Pool: EAPP Achievements • IRB established • Regional Master Plan & Grid Code proposed • Market design & Road Map to 2025 proposed. • Market Rules & standard PPAs proposed • Regional data base of documents implemented • Management consultancy service implemented • IRB and CC core staff recruited and retained • Capacity Building provided for utilities and EAPP staff • Transmission standards prepared • Harmonization of technical standards began • 2012-2014 Corporate Plan prepared • Excellent relations with partners

6. Enhanced CC & IRB Operationalization • 1.2 Trade and Infrastructure • The infrastructure development • is encouraging • Trade is bilateral between • neighboring countries. • Region is reach in resources. • Seasonal variations in rainfall • contributes to reliability • The regional master plan • indicates a number of feasible • least cost projects. Existing and expected Interconnections Eastern Africa Power Pool

7. Enhanced CC & IRB Operationalization • 2. Background • Assisted by donors, EAPP has conducted the following institutional strengthening projects over the last three years. • Operationalization of CC and IRB Program (MFA Norway financed) • Regional Master Plan and Grid Code Project (IPPF/NEPAD financed) • Technical Assistance and Capacity Building Project (EC financed) • Powering Progress Project (USAID financed) Eastern Africa Power Pool

8. Enhanced CC & IRB Operationalization • 2. Background Contd… • Under the 2009-2011Operationalization of CC and IRB program, EAPP has conducted the following. • Core staff of CC and IRB were recruited and retained • A training project was launched to train EAPP and utilities staff • A regional database of documents consisting of some three thousand documents was implemented; hardware and software was procured • A management consultant was hired and studied detailed structure and system • A procurement consultant was hired and assisted in procurement • External audit and coordination activities were also financed Eastern Africa Power Pool

9. Enhanced CC & IRB Operationalization • 2. Background Contd… • Despite the achievements, additional support was needed. EAPP has therefore requested and obtained a new grant from MFA. • New program is called “Enhanced Implementation and Operationalization of EAPP CC and IRB” • The new program is based on the Project Document (PD) prepared by EAPP. • The PD, and hence the new program addresses issues identified in the EAPP Corporate Plan (CP). • The EAPP Corporate Plan was presented and discussed by the Steering Committee. Eastern Africa Power Pool

10. Enhanced CC & IRB Operationalization • 3. The Program • The ‘Enhanced Operationalization and Implementation of the EAPP CC and IRB program has the following features. • It is a technical assistance project • It has a three year horizon: 2012-2015 • Contributes to the achievement of the goals in the EAPP Corporate Plan. • The activities are in harmony with the anticipated development of the power market and infrastructure • Focuses on a hands-on exercise, instead of formal training to develop human capacity Eastern Africa Power Pool

11. Enhanced CC & IRB Operationalization • 3. The Program Contd.. • The Program addresses • the EAPP Strategic Issues • Identified in the CP • The Program and the • CP have the same time • horizon: 2012-2014 • The Program activities • address EAPP’s strategic • issues. Eastern Africa Power Pool

12. Enhanced CC & IRB Operationalization 3. The Program 3.1 Program Goal: The Goal of this program is to: Contribute to the efficient and effective market operation, system operation coordination, and regulatory services for the regional power market. Eastern Africa Power Pool

13. Enhanced CC & IRB Operationalization • Purpose of the program: • Operationalize CC and IRB for the commercial operation and regulation of the Eastern Africa power market. • Operationalize the Regional Grid Code (RGC) for the planning and technical operation of the interconnected regional power system. • Create and operationalize sub-committees/working groups to streamline the regulation, techno-commercial operation and planning of the regional power system. • Implement and build on the MFA financed management consultancy outputs.

14. Enhanced CC & IRB Operationalization • Supported activities: • The project finances the following category of activities • Development and implementation of pilot project • Set up and operationalization of technical sub-committees and working groups • Twining services • Attachment to regulatory agencies/boards • Procurement of planning hardware and software • EAPP stakeholder and coordination meetings • COM, SCM, IRB & development partners meetings • Retention of recruited CC and IRB staff Eastern Africa Power Pool

15. Enhanced CC & IRB Operationalization • i/ Pilot Projects • Objective: • Enhance skills and knowledge through practice. • Identify gaps in system operation and regulation • Forge close ties between staff (CC, IRB, utilities, etc) • Develop procedures, formats and guidelines • Implementation arrangement: • SINELAC, Kenya-Uganda, and Ethio-Djibouti-Sudan interconnections will be used as reference cases. Eastern Africa Power Pool

16. Enhanced CC & IRB Operationalization • i/ Pilot Project Contd… • Approach: There are two steps. • Step One: • Develop the Pilot project in consultation with stakeholders and twining assistant • Refine activities, and schedule • Develop required formats and agree on procedures Eastern Africa Power Pool

17. Enhanced CC & IRB Operationalization • i/ Pilot Project Contd… • Step Two: • Implement the pilots • Initial exercise will focus on the Operations Code. • National control center and EAPP staff will work together to apply the Interconnection Code • No confidential data will be required by EAPP • Application of the market operation procedures depends on permissive conditions. Eastern Africa Power Pool

18. Enhanced CC & IRB Operationalization • ii/ Set up and operationalization of sub-committees and working groups • Set up the Environmental Sub-Committee • Update membership of Planning & Operations Sub-Committees • Set up the market working group • Examine the need for other working groups • Develop and implement internal procedures for all the committees and working groups • Nominate chairpersons, identify activities and develop schedule, and carry out activities Eastern Africa Power Pool

19. Enhanced CC & IRB Operationalization • ii/ Set up and operationalization of sub-committees and working groups Contd… • Activities of the working groups over the coming period include: • Develop the various rules, policies, procedures, and formats system operation coordination, planning, regulation including environmental impact assessments • Advise EAPP on various system operational, regulatory, planning and market development/operation issues. Eastern Africa Power Pool

20. Enhanced CC & IRB Operationalization • iii/ Twining Services • The service aims at transferring experiential knowledge and skills. • Twining agreements have already been made with SAPP, Energinet, and Nordpool • Experts from these organizations will work with EAPP to assist and guide on various activities • Outline Terms of Reference Eastern Africa Power Pool

21. Enhanced CC & IRB Operationalization • iv/ Attachment to national regulators • Staff will have a working visit to national regulators • Objective is to learn from their experience • Information and data on the national regulation will be gathered • Discussions on legal and regulatory provisions with a view to identifying harmonization issues • Outputs (reports and findings) will serve as input to harmonization process Eastern Africa Power Pool

22. Enhanced CC & IRB Operationalization • v/ Power system planning hardware and software • This covers the procurement of planning software and hardware • The software includes PSS/E and OPTGEN • The equipment will be used in the updating of the regional master plan • The facility will be used by EAPP staff and the Planning and Operations Sub-Committees Eastern Africa Power Pool

23. Enhanced CC & IRB Operationalization • vi/ Other Expenses • To further strengthen the institutional capacity of EAPP, the program will also cover the following expenses. • COM, SCM, and IRB meetings with development partners • Stakeholder and coordination meetings • Retention of CC and IRB staff Eastern Africa Power Pool

24. Enhanced CC & IRB Operationalization Eastern Africa Power Pool