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| | <br/> | | <br/> |
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| − | = RBF - Casestudies =
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| | + | = RBF - Casestudies for Off-grid Solar = |
| | | | |
| | == EnDev - Tanzania == | | == EnDev - Tanzania == |
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| | |} | | |} |
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| | + | <br/> |
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| − | == World Bank - Kenya == | + | == World Bank - Kenya == |
| | | | |
| | {| border="1" cellspacing="0" cellpadding="1" style="width:100%;" | | {| border="1" cellspacing="0" cellpadding="1" style="width:100%;" |
| | |- | | |- |
| − | | style="text-align: center; background-color: rgb(79,129,189)" colspan="2" | <span style="color: rgb(255,255,255)">'''World Bank facility for solar | + | | style="text-align: center; background-color: rgb(79,129,189)" colspan="2" | <span style="color:#FFFFFF;">'''World Bank facility for solar home systems under the Kenya Off-Grid Solar Access Project (KOSAP)'''<br/></span> |
| − | home systems under the Kenya Off-Grid Solar Access Project (KOSAP)'''</span> | + | |
| | |- | | |- |
| | | style="background-color: rgb(219,229,241)" | | | | style="background-color: rgb(219,229,241)" | |
| − | ''KOSAP is a World Bank–funded project, implemented by the government of Kenya, that aims to | + | ''KOSAP is a World Bank–funded project, implemented by the government of Kenya, that aims to'' expand electricity access through off-grid solar products and solar mini-grids in Kenya’s underserved counties—the poorer and more remote regions in north and northeast Kenya. It includes an off-grid solar component of $42 million, made up of a $12 million RBF facility and a $30 million debt facility. SNV and SunFunder were chosen as implementation partners by the government of Kenya, following a competitive selection process. The facilities were launched in June 2019.'' |
| − | expand electricity access through off-grid solar products and solar mini-grids in Kenya’s underserved | + | |
| − | counties—the poorer and more remote regions in north and northeast Kenya. It includes an off-grid | + | |
| − | solar component of $42 million, made up of a $12 million RBF facility and a $30 million debt facility. | + | |
| − | SNV and SunFunder were chosen as implementation partners by the government of Kenya, following a | + | |
| − | competitive selection process. The facilities were launched in June 2019. .'' | + | |
| | | | |
| − | ''This facility competitively awards financial incentives to companies to compensate them for the | + | ''This facility competitively awards financial incentives to companies to compensate them for the'' up-front, ongoing, and opportunity costs associated with expanding into underserved counties. Counties are divided into service territories, and tenders are held for each service territory. Companies bid based on a financing amount per household that they estimate would be required to electrify the household and a sales target they estimate they can reach. The companies with the lowest financing requirements win, assuming they meet eligibility criteria, have proven track records, and can reasonably be expected to stay in the underserved county once the subsidy period comes to an end. For each tender, there is a percent cap for the maximum amount any individual company can receive, in order to ensure that there are multiple, competing companies in each service territory and customers have a meaningful choice of products and suppliers.'' |
| − | up-front, ongoing, and opportunity costs associated with expanding into underserved counties. | + | |
| − | Counties are divided into service territories, and tenders are held for each service territory. Companies | + | |} |
| − | bid based on a financing amount per household that they estimate would be required to electrify the | + | |
| − | household and a sales target they estimate they can reach. The companies with the lowest financing | + | == United Kingdom == |
| − | requirements win, assuming they meet eligibility criteria, have proven track records, and can reasonably | + | |
| − | be expected to stay in the underserved county once the subsidy period comes to an end. For each | + | {| border="1" cellspacing="0" cellpadding="1" style="width:100%;" |
| − | tender, there is a percent cap for the maximum amount any individual company can receive, in order | + | |- |
| − | to ensure that there are multiple, competing companies in each service territory and customers have a | + | | style="text-align: center; background-color: rgb(79,129,189)" colspan="2" | <span style="color:#FFFFFF;">'''The Renewable Heat |
| − | meaningful choice of products and suppliers.'' | + | Initiative'''<br/></span> |
| | + | |- |
| | + | | style="background-color: rgb(219,229,241)" | |
| | + | ''The U.K. government instituted the Renewable Heat Incentive in 2011, in order to encourage a switch |
| | + | away from fossil fuel–based heating systems. The program subsidized each unit of heat produced from |
| | + | renewable energy. It encouraged commercial, industrial, and residential users to install renewable |
| | + | energy technologies, including biomass boilers, solar water heaters, and heat pumps.'' |
| | + | |
| | + | ''Payments were made to domestic and nondomestic installers on the basis of each kilowatt hour (kWh) |
| | + | their product produced. The initial subsidy was £0.09 ($0.12) per kWh for heat and £0.10 ($0.13) per |
| | + | kWh for hot water. The annual subsidy for installers was to last 20 years for commercial installations and |
| | + | 7 years for home installations. On this basis, installers could expect to recover the costs of installation |
| | + | within five to eight years from the incentive. Payments received were tax free.'' |
| | + | |
| | + | ''In 2017 the scheme came under intense scrutiny for overspending, and a public inquiry was launched. |
| | + | During the inquiry, allegations were made that some users installed heating systems to profit from the |
| | + | scheme rather than to meet genuine heating needs. In 2017 the subsidy was reduced, highlighting the |
| | + | risk to installers where payments are made over a long period, during which there is potential for policy |
| | + | change..'' |
| | | | |
| | |} | | |} |
For the off-grid solar marke, the RBF could be based on indicators such as: no of SHS systems installed, no of homes or businesses served and volume of energy (Kwh) produced. They can be either one time payment upon instalment of the system or distributed over lifetime to promote also after-sales services[1][2][3].
Results-based financing should not be seen as a 'silver bullet', but as a potentially useful addition to the range of measures that developing country governments and their development partners might deploy to promote energy sector development. Commonly cited limitations of RBF include the need for agents to secure pre-financing, higher data collection and auditing costs, and the challenge of accurately setting the incentive to avoid rent-seeking whilst achieving the desired results.
Other challenges include: certain companies can make fraud outcomes (i.e installign the technologies but not delivering the adequate energy), can be expensive for the funding agencies in case of high demand for it, RBF that pays only after the service has been deliverd may not be suitable for earlier stage companies[3].
Aside from OBA there is limited experience with RBF in the energy sector. In part to build up this experience a number of programs and initiatives are actively exploring ways to pilot and mainstream RBF into their activities. These include:
