Presentation Transcript

1. PRO POOR PPP Gianluca Sambucini Secretary of the Committee on Sustainable Energy SUSTAINABLE ENERGY DIVISION Tunis 3-5 October 2012
2. Contents Setting the context The renewable option Strategic Public Private Partnerships How a Pro-poor differs from a standard PPP Report Recommendations Case studies
3. Section 1.0Setting the Context
4. Pillars of sustainable development
5. The impact of energy inequality The multidimensional negative social and environmental impacts of energy inequality Source: Sovacool (2011).
6. Policy Relevance
7. Section 2.0The Renewable Option
8. Energy needs of the rural poor
9. Wind Advantages: The Energy source is free, Fully Sustainable once built Disadvantages: Wind volume fluctuates, and therefore requires a back-up, Potentially large areas are required, Visual pollution Solar Advantages: Energy can be generated off-grid, Offers modularity and scalability Disadvantages: High upfront capital costs, High risk of technological obsolescence, Requirement for water cooling, a major issue in arid rural regions Renewable options Water Advantages: Once constructed energy can be produced at a constant rate, More reliable than wind and solar Disadvantages: High upfront cost, Finding a suitable site can be difficult Biomass Advantages: Reasonable cost, An inexhaustible fuel source if harnessed properly Disadvantages: More expensive that traditional fossil fuels, a less concentrated form of energy, making it less efficient
10. The challenges of energy deployment Geographically dispersed villages Inadequate focus on local resources Inadequate Interest of the private sector Need for better monitoring Ineffective targeting of subsidies Affordability of Energy cost Availability of ready to use technology Energy crops competing with food crops Who pays?
11. Key areas to consider when selecting a option* EnvironmentalEffectiveness Resource availability Ecological impact Technical feasibility Financial viability Educational potential Social and economic impacts *The appendices of the full report contains lists of detailed key questions for each of these areas
12. Section 3.0Strategic Public Private Partnerships
13. What is a PPP? Public private partnerships (PPPs) are arrangements between government and private sector entities for the purpose of providing public infrastructure, community facilities and related services. Such partnerships are characterized by the sharing of investment, risk, responsibility and reward between the partners. The most successful partnership arrangements draw on the strengths of both the public and private sector to establish complementary relationships.
14. Advantages and Disadvantages
15. Common Governance Risks Provision of a part-time project manager and limited resourcing of the project team Loss of continuity and knowledge through badly managed or frequent changes in the project team Lack of resources, including advisers, or, conversely, excessive reliance on advisers for decision making Insufficient delegation of powers to the project management group Interference from other bodies outside the governance structure Poor management of the day-to-day resources, including the external advisers A project board that is too large and unable to meet as required to make key decisions.
16. Delivery models Management and lease contracts a private entity takes over the management of a state-owned enterprise for a fixed period, while ownership and investment decisions remain with the state Concessions a private entity takes over the management of a state-owned enterprise for a given period, during which it assumes significant investment risk Greenfield projects a private entity or a public-private joint venture builds and operates a new facility. Divestitures divestitures a private entity buys an equity stake in a state-owned enterprise through an asset sale, public offering, or mass privatization program.
17. The PPP implementation model
18. Section 4.0How is a Pro-Poor PPP Different?
19. Pro-Poor requires a different focus In a traditional PPP the focus is on financial return ……..a profit making venture In a Pro-Poor PPP the focus is on community engagement, lives improved and gender inclusiveness …..delivering a social good 50%
20. Section 5.0Recommendations
21. A Global problem; requiring local solutions Governmental buy-in for the long term The importance of local engagement for sustainable success Learn by doing, continuously improve and redeploy Develop pro-poor PPP energy Global Champions Feed outcomes into future UN policy and programs Develop and agree a Pro-poor renewable energy attractiveness index Develop a Pro-poor diagnostic for regional specific implementation
22. Case Studies
23. Water and Electricity Services Provision in Gabon 20 Year concession for the production, transport, and distribution of both water and electricity in Gabon. Financial close was completed in 1997 with a capital value of US$ 135million The Government provided strong policy support to the project since its conception. The Government prepared the ground for private sector participation by developing an appropriate legal, institutional, and contractual framework and by putting in place an appropriate pricing policy. The Government preserved a good social climate throughout processing of the transaction by completing the restructuring of SEEG prior to the operation. The contract defined the investment obligations and set coverage targets for the consortium. The experience in this case shows that if some contractual clauses are to be negotiated during the life of the contract, it is important to set and adhere to realistic deadlines and to have safeguards in place to allow for proper regulation of the contract in the absence of an agreement. The provision of various utilities allowed cross-subsidization of less profitable areas and economies of scale.
24. Lighting a billion lives in India It has so far covered 1500 villages in India, benefitting 370,400 people Local entrepreneurs are trained to operate and manage the solar charging station and rent out certified, bright, and quality solar lanterns to the community every evening based on a fee-for-service model. The Efficient functioning of the local level institutions (international agencies, NGO’s and local partnership networks) required continuous mobilization, training and capacity building. Prior to inception of the project, community sensitization and engagement was conducted, this was part of a broader capacity building of all key stakeholders. It is interesting to note that the initiative doesn't only focus on making access to modern sources of energy affordable to the targets users; it also tries to enhance their income and affordability by extending additional income generating oppo One of the key strengths of the programme lies in the fact that it has been able to develop convergence with other developmental programmes in providing co-benefits to rural community. For example, the programme model was customized to provide lighting in tribal residential schools in remote parts of Koraput district or Odisha, with opportunities like mobile phone charging, to bridge the gap from both ends.
25. Zambia’s solar project The Zambia photovoltaic-energy service company (PV-ESCO) project began in 1996 by the Ministry of Energy, in cooperation with the Stockholm Environmental institute and the Swedish International development Authority. This project promoted learning and training through constant interactions between ESCO technicians and households, as well as technicians and universities. A managed role-out has meant that the project has been tightly controlled, monitored and subsequently improved throughout Awareness campaigns and regular spot checks by technicians build trust with customers, and penalties for overuse have helped results in more sustainable battery charging. Households using the program have commented how the quality of light is much better than fossil-fuelled lamps and also that they feel more connected to the modern world with access to telephony, radio, and television. Units have also been distributed to shops, bars, restaurants, and motels which have reported an increase in business.
26. Contacts THANK YOU! For more info, please contact the UNECE staff responsiblefor thisproject: Adam Sek, RegionalAdviser: adam.sek@unece.orgor Gianluca Sambucini, Secretary of the CSE: gianluca.sambucini@unece.org