General Information South African Export Development Fund (SAEDF) March 2009

1. General Information South African Export Development Fund (SAEDF) March 2009 Kuyasacdm@telkomsa.net

2. Location

3. Location

4. Solar Water Heater

5. Solar Water Heater

6. Overall view of light and SWH interventions

7. Electrical interventions

8. Sectional view of ceiling installation

9. Ceiling installation - Public Works

10. Background Players & functions Project Owner/client: Kuyasa Community-based Energy Services entity (to be formed) Long-term finance, maintenance and democratic participation Project Funder: Department of Environmental Affairs and Tourism (DEAT) Project finance and management oversight Institutional stakeholder: City of Cape Town (CoCT) Enabling and facilitating implementation Implementer: South African Export Development Fund (SAEDF) Day to day management of implementation, contracting of suppliers and labour

11. Key aspects • 2,309 houses (minimum) • Budget shortfall underwritten by SAEDF • Kuyasa community empowerment / investment / jobs / ownership • Sustainability and ongoing local contribution • Carbon finance, cost contribution and collection • Complimentary initiatives • Greening • Support to community initiatives

12. Kuyasa project outputs • 2.82 Tons of Carbon Credits (1.2 for SWH) per unit/per annum • Total tons of 6,511 p/a. Income of approx R 780,000 p/a (at Euro10/ton) • Ongoing communal income • Skilled and semi-skilled jobs created for 60 persons - ongoing maintenance jobs and business opportunities • Modeling and informing future sustainability in low cost housing

13. Suppressed Demand • Energy poverty can be understood as limited access to and/or affordability of energy services thus affecting both energy choices and consumption patterns of poor households. • Therefore due to energy poverty, the demand for energy services in these households is said to be “suppressed” = • Because of poverty or lack of infrastructure energy service levels are below those that would otherwise have been consumed • The unsuppressed level of consumption for houses without ceilings, with electric hot-water storage geysers and incandescent lamps can be predicted using calibrated theoretical models (baselines)

14. Suppressed Demand Thermal power required to reach 21oC Outdoor ambient winter’s day temperature profile Thermal energy required without ceilings and ceiling insulation Suppressed demand for thermal energy Thermal energy required in houses with ceilings and ceiling insulation Current level of space heating Morning Evening

15. Benefits Social • Respiratory health burden reduced • Provision of hot water – health / comfort • Household cost savings due to energy efficiency • Employment opportunities (EPWP) Economic • Peak demand reduced – defers new installed capacity • Leadership for low cost housing / energy industry • Entrepreneurial opportunities Environmental • Largest project of its kind in Africa - Leadership • City SWH target – 10% by 2010 (ie 80 000 houses) Project assists this target • Implementing global commitments Governance • Local participation and decision-making

16. High level impact Placing energy poverty in low income housing firmly on the national agenda New roll-out and replication Local manufacture / improved technology Solar energy adaptation Open Vented Solar Water Heater Balanced pressure Tempered water Quality / Longevity Water-wise Easy maintenance Low cost 16

17. “The project brought skills and jobs for young men, they don’t hang around street corners anymore.“ “I get a lot of visitors now – no one can laugh at my house.” “We are warm now, we are saving, we don’t get flu as often. Life is much easier.” “The project makes us proud.” “I never thought a poor person like me could have a solar geyser.” “Our children are much safer now, no more hanging wires.” “The project has given the people of this community dignity.” 17

18. What will it cost? Monetizebasic electricity grant Collection of contribution

19. Can we afford to do it? Monetizebasic electricity grant Collection of contribution Public works Carbon finance DSM finance Eskom SWH subsidy

20. Can we afford not to? Sustainable model delivering on the critical imperatives: Service delivery / Poverty alleviation Micro economic benefits at household level Economic co-benefits Health Job creation / skills development Macro economic benefits Avoided new power generation 20

21. Finance for large-scale roll-out Commercially viable to finance and roll out SWHs in low-cost housing on a large scale through a combination of: • Hot water supply - monthly payment • Collection through pre-paid electricity • Demand side finance • Eskom SWH subsidy • Carbon finance - programmatic CDM • Public works (labour and local skills development) • Large scale roll-out of alternative energy possible • Ensuring pro-poor service delivery and poverty alleviation; • Supplying community ownership, jobs and ongoing maintenance; • Supplying commercially viable development through public/private partnerships.

22. Some final notes • Many small sources of emissions make transaction costs high • Cost R30m in implementation costs • R200 000 for verification (awaiting completion) • 95% completion awaiting final DEA payment • Scale… Government investment and ownership of CERs • Suppressed demand needs to be included in methodological approach for replication • NAMAs may be more appropriate