Unlocking Private Investment A Roadmap to achieve Côte d’Ivoire’s 42 percent renewable energy target by 2030 About IFC IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit www.ifc.org. © International Finance Corporation [2018]. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 Internet: www.ifc.org The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. 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Cover photos: left: © Dominic Chavez/International Finance Corporation; right: iStockphoto Back cover photos: left: iStockphoto; right: © Dominic Chavez/International Finance Corporation Unlocking Private Investment A Roadmap to achieve Côte d’Ivoire’s 42 percent renewable energy target by 2030 Contents Foreword............................................................................................................. viii Acknowledgements................................................................................................ x Executive Summary................................................................................................. 1 Country Context and Background.............................................................................7 Power 8 Renewable Energy Potential 10 Côte d’Ivoire’s Innovative Vision to Attract Investment.............................................. 11 Hydropower...........................................................................................................17 Status 18 Challenges 20 Management of existing hydropower assets 20 Attracting the private sector 20 Potential Solutions 20 Improve the quality and transparency of information about hydropower resources and their development 20 Develop a clear government framework for hydro projects 21 Revise existing high-level resource study and include site prioritization 21 Adjust current approach to site prioritization to increase opportunities for new players in the market 21 Carry out feasibility studies to prepare a tender program for small hydropower 22 Biomass............................................................................................................... 23 Status 24 Challenges 25 Low demand for on-site thermal energy 25 Coordinating a range of stakeholders 25 High capital expenditures 26 Facilitating management and sourcing supply 26 Potential Solutions 26 Strengthen agricultural sector capacity 26 Define a government strategy for biomass and conduct a comprehensive mapping study 26 iv Develop pilot projects 29 Expand use of municipal solid waste and alternative feedstock 29 Variable Generation: Solar and Wind ........................................................................31 Utility-Scale Generation and Grid Integration 34 Current status 34 Challenges for utility-scale generation and grid integration 36 Potential solutions 38 Off-Grid 43 Challenges 43 Potential solutions 44 Mini-Grids and Distributed Generation 50 Challenges 50 Potential solutions 51 Cross-cutting Issues: Finance, Policy, and Regulation................................................ 55 Status 56 Challenges 57 Developing experience in the renewable energy sector 57 Maintaining a neutral, competitive process 57 Identifying appropriate investment promotion incentives 57 Potential Solutions 58 Map existing sources of funding available for renewable energy in Côte d’Ivoire, including concessional and grant funds 58 Explore feasibility of targeted guarantees 58 Maintain an updated investment prospectus for Côte d'Ivoire’s renewable energy sector in consultation with the private sector 59 Develop and implement an ongoing renewable energy policy monitoring framework based on ECOWAS experience 60 Create a renewable energy and energy-efficiency agency and one-stop shop for investment promotion 60 Next Steps............................................................................................................ 63  v Contents Annexes...............................................................................................................65 Resources 66 Hydropower 66 Biomass 66 Variable Generation: Solar and Wind 67 Grid-tied 67 Off-grid 68 Grid, mini-grid, and distributed generation 68 Finance and policy 69 Project Portfolio 70 Laws and Regulation for Clean Energy 70 vi Figure 1: Roadmap process 5 Figure 2: Market share and generation mix (2017) 9 Figure 3: Indicative pathways for scaling grid-tied renewable energy based on government plans (MW) 13 Figure 4: Annual costs of implementing renewable energy project pipeline ($M) 14 Figure 5: Total capacity and costs of identified renewable energy pipeline to 2030 ($M and MW) 15 Figure 6: Breakdown of power generation supply (% total GWh produced) 19 Figure 7: Power generation supply (GWh) 19 Figure 8: Direct normal solar irradiation in Côte d'Ivoire 35 Figure 9: Operating and proposed utility-scale solar PV project installed costs in Africa (2011-2018) 36 Figure 10: Average number of weeks to get connected to electricity 37 Figure 11: Electricity access and mobile phone ownership, Sub-Saharan Africa, 2016 (% of rural households) 48 Table 1: Installed capacity (2017, 2030) 13 Table 2: Costs for installation goals identified in pipeline 15 Table 3: Installed capacity (2017) 18  vii Foreword A long with the challenges it presents, addressing climate change also reveals immense opportunities. The International Finance Corporation (IFC)—a sister organization of the World Bank and member of the World Bank Group—analyzed the Paris Thierry Tanoh Agreement goals set by 21 of the largest Minister for Petroleum, Energy and Renewable Energy emerging market countries, and found Development, Côte d’Ivoire more than $23 trillion in climate-smart investment opportunities leading up to 2030. As a result of government policy leadership and private sector innovation, clean, renewable energy is becoming the technology of choice to meet growing demand and achieve ambitious goals for energy access and reduced emissions. Côte d’Ivoire is no exception. IFC and Côte d’Ivoire have been working together for over a decade to deliver Alzbeta Klein private sector solutions that expand the Director, Climate Business Department, International country’s power supply. Finance Corporation When the country set its target to achieve 42 percent renewable potential worth about $9 billion. A range of financial sources energy generation by 2030, IFC approached the Ministry of including blended concessional climate finance and commercial Petroleum, Energy and Renewable Energy Development to capital will need to be leveraged to achieve this ambitious goal. forge a partnership supporting private sector solutions that IFC will work with other development partners to support can help achieve this ambitious goal. This partnership builds companies working in Côte d’Ivoire in accessing such funds for on Côte d’Ivoire’s significant hydropower assets (nearly 880 projects as needed. megawatts—23 percent of the current generation mix) to Our partnership does not end with this Roadmap. We want integrate new and innovative technologies and business models. to thank the experts working in the financial, technology, The Ministry and IFC are pleased to report that, over the past transport, and agriculture industries for their active year, more than 100 stakeholders across the public, private, participation, ideas, and input. We look forward to working and development finance sectors have provided their input with these stakeholders—and others—to implement these and ideas to help Côte d’Ivoire achieve the 42 percent target. solutions. We hope that this Roadmap and the unique It is one of the first countries to analyze its Paris Agreement private sector engagement process that we have undertaken commitments to identify investment opportunities for the will serve as an inspiration for other countries that seek to private sector. A series of dialogues contributed to the creation attract private investment and ideas to deliver on their Paris of this Roadmap, which provides a set of practical solutions, climate commitments while also achieving their economic including competitive international tenders for new generation; development goals.  resource availability studies to unlock new hydropower and wind potential; and policies to catalyze innovative off-grid solutions such as solar home systems. If these solutions can be realized, IFC estimates there is a renewable energy investment Thierry Tanoh Alzbeta Klein  ix Acknowledgements This report was prepared by the Climate Business Department A Cissé of the National Office of Technical Studies and (Alzbeta Klein, Director), Climate Finance and Policy Group Development (BNETD); Pascal Yao Amani of the Renewable (Vikram Widge, Head). The lead authors were Tom Kerr Energy Development Agency (ADERCI); and Koffi Rodrigne and Aditi Maheshwari; they were supported by consultants N’Guessan and Richard Dadi of the Ministry of Agriculture. Elizabeth Minchew, Andrew Carter, Pierre-Claver Kouakou, The following IFC colleagues also provided critical review and Melissa Olga Basque, and Tyler Chapman. Creative design, input: layout, and printing services were provided by the World Bank’s in-house printing and multimedia team, led by Manuella • IFC Infrastructure: Yasser Charafi, Celian Gondange Lea Palmioli, Gregory Wlosinski, and Adam Broadfoot. Copy • IFC InfraVentures: Jan Henri Dewulf editing services were provided by the team at Clarity Editorial, • IFC Advisory Services: Stefan Rajaonarivo, Dan Shepherd, led by Lara Godwin. French translation services were provided Jean-Francois Mercier, Alexander Larionov, Jeremy Levin, by Barbara Bohle and her team at Bohle Conference and Jonathan Wanjiru, Stratos Tavoulareas, Arthur Itotia Njagi, Language Services. Yulia Guzairova managed the budget. Elena Merle-Beral Our deepest gratitude to Cassandra Colbert, IFC Country Manager, for her leadership and engagement for this innovative • IFC Climate Business Department: Sean Whittaker, Guido partnership, and to her staff, particularly Esther Koko Agostinelli, Peter Mockel Williams, Pelagie Agbemebia, and Jordan Sera, who provided • IFC Financial Institutions Group: Quyen Nguyen essential support. • IFC Country Economics and Engagement: Frank Douamba, We would like to thank Thierry Tanoh, Minister of Petroleum, Vincent Floreani Energy and Renewable Energy Development, and his team, • IFC Blended Finance: Joyita Mukherjee, Riccardo Gonzalez including Cisse Sabati, Director General of Energy, and our focal point for this project, Konan Norbert N’goran, • World Bank Energy & Extractives Global Practice: Manuel Renewable Energy Director, for their invaluable support. Luengo, Pierre Audinet, Raihan Elahi Messrs Moussa Dosso, Moussa Kone, Guillaume "Guei" Many private companies and financiers provided critical Kouhie also provided important input. Thanks are also due input and participated actively in the working groups. This to CI-Energies, Amidou Traore, Director General, and his includes: Ralph A. Olayé and Ludovic Malan of Eranove, staff, notably Koutoua Euloge Kassi, Aphi Amoussou Nanan, Gad Cohen of Eleqtra, Denis Kouakou of Bandama, Zheng and Nagaky Diarrassouba, who have provided helpful Xiang of Sinohydro, Yapi Ogou of SODEN, Kombu Ekne contributions. Noel N’Guessan of LONO, Philipe Torset of Cabinet Nerun, In addition, we would like to thank the following government Mohamed Habbal of Nova Power, Sarah Bouhassoun of experts for their insights and contributions: Brou Stéphane Greenwish Partners, Marc Le Bourlout of SAGEMCOM, Noel N’drin, Aka Francis, and Achou Arnaud Sombo from Mamadou Traore of IVERTECH, Achi David of AD Solar, national electricity regulator ANARECI; Dr. Alain Serges Patrick Kouame and Shola Akindes of African Infrastructure Kouadio of the private sector engagement center CCESP; Investment Managers (AIIM), Marc Daubrey of Green Invest Ahoua Traore, Ulysse Guillao, and Jean-Louis Niagne of the Africa, Frank Ammel Kouadio of Eburnum Think Tank, Investment Promotion Center CEPICI; Messrs Benoit Hugues Mamadou Doumbia of Acteef, Jean-Jacques Ngono and Nago, Gustave Aboua and Richemond Assié of the Ministry of Florian Cammas of Finergreen, Edi Boraud of the Ivorian Health and Environment; Adama Kone, Adama Dao, Edmond Association of Renewable Energies and Energy Efficiency Coulibaly, and Diabi Sekou of the Ministry of Finance; Ben (AIENR), Julien Cot and Serge Coulibaly of PHAESUN/S-Tel, x Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 Jean Mallebay-Vacqueur and Diaby Bassaran of E2IE, Ayou • At the European Investment Bank, and their Global Fabrice Nguessan, Jean Rene Coffi, and Zahid Ahmed Hassen Energy Efficiency and Renewable Energy initiative (EIB & of Biotherm, Philippe Miquel and Tristan Bosser of Engie, GEEREF), Cyrille Arnould, Daniel Farchy, and Isabelle van Josiane Achi, Luwis Tiengoue, and Emile Guei of Holding Grunderbeeck. Group EOULEE, Paul-Francois Cattier of Schneider Electric, • At the European Union (EU), Hugo Van Tilborg and Samuel Julien Dubout of Fenix International, Kassim Cisse of Robert. Électricité de France, Cedrick Montetcho and Yves Komaclo of Oikocredit, Claude Koutoua of the General Association • At KfW, Andreas Fikre-Mariam. At GIZ, Frauke Krämer, of Enterprises of Côte d’Ivoire (CGECI), Appolinaire Ta Bi Heike Höss, and Michael Dreyer. of Green Invest Africa, and Kamal Abdelhafid and Thanae • At the United States Agency for International Development Bennani of Platinum Power. (USAID), Agustin Cornejo, Kathleen "Katie" Auth, Katrina We also wish to thank several development finance institutions Pielli, Komenan Koffi, Pepin Tchouate, and Miguel Franco. that were also key participants and provided helpful input, At the United States Trade and Development Agency including: (USTDA), Clare Sierawski. • At the African Development Bank (AfDB), Joao Duarte Finally, we would like to thank our funders, who made Cunha, Frédéric Reveiz Hérault, Philippe Ossoucah, and this project possible. The NDC Support Facility, housed in Antony Karembu. From the AfDB’s African Legal Support the World Bank’s Climate Change Group, including Ana Facility (ALSF), Hélène Nse Eyene. Bucher, Stephen Alan Hammer, Tom Witt, Yunziyi Lang, Sabine Cornieti, and Marius Kaiser. Also, the Public-Private • At the French Development Agency (AFD), Adama Diakite Infrastructure Advisory Facility (PPIAF), including Nuwan and Lise Piqueras. From Expertise France/SUNREF, Roger Suriyagoda and Bailo Diallo. N'guessan. At PROPARCO, Aurelie Askia, Fatoumata Sissoko-Sy, and Laurent Farge. • From West African Development Bank (BOAD), Oumar Temb. • At the Energy Center for Renewable Energy and Energy Efficiency (ECREEE), Nathalie Weisman.  xi xii Photo © Dominic Chavez / IFC Executive Summary C ountries around the world are working towards a low-carbon future. Since the adoption of the Paris Agreement in December 2015, 189 countries have submitted national plans that set clear goals to increase investment in renewable energy, energy efficiency, sustainable infrastructure, climate-smart agriculture, and more. Beyond setting the stage for bottom-up action, these Nationally Determined Contributions (NDCs) also opened up massive potential for investment—nearly $23 trillion according to the 2016 International Finance Corporation (IFC) Climate Investment Opportunities in Emerging Markets report.1 Much of this investment will need to come from the private sector. Governments— including Côte d’Ivoire—are increasingly interested in working with the private sector to unlock vital finance and develop innovative solutions. Costs for renewable energy are rapidly decreasing and in certain cases can be less expensive than generating electricity from fossil fuels. This has helped to radically change the model of energy development and access around the globe, and a larger share of the energy mix is expected to be renewable in future. In regions like Sub-Saharan Africa where there is high interest in expanding infrastructure to improve access to energy, there is an opportunity to leapfrog traditional electrification approaches and develop new models that are cleaner, more efficient, and focused on customer and business needs. There is significant opportunity for private sector investment to meet Côte d’Ivoire’s renewable energy goals Côte d’Ivoire’s commitments are ambitious. The country's NDC, released in 2016, set a target to reduce its greenhouse-gas emissions by 28 percent by 2030, including a target to generate 42 percent of electricity from renewable energy by 2030.2 As highlighted in the IFC Climate Investment Opportunities report, the country is focused on spurring economic growth and solidifying its role as an economic engine for West Africa. Photo © SE4ALL The government recognizes the important role of private that the need for affordable tariffs for all is balanced with the sector investment in expanding renewable energy penetration. need for the project promoter to profit from its investment.6 Overall, Côte d’Ivoire’s 2016-2020 National Development Partnerships such as that between IFC and the Ministry of Program aims to attract $32 million in private investment.3 Petroleum, Energy and Renewable Energy Development The main drivers of sustained growth are expected to be both are vital to contributing to the knowledge base that will public and private investments in infrastructure, opening up pave the way for the private sector. Private companies will significant opportunities for the energy and electricity sectors. demonstrate interest once they understand the appropriate The Ministry of Petroleum, Energy and Renewable Energy demands, incentives, and supporting mechanisms that allow Development is developing the overall strategy and policy an investment to provide appropriate risk-adjusted returns. framework for including renewables into the energy mix. The Through the structured engagement process and this Roadmap, Société des Energies de Côte d’Ivoire (CI-Energies), a state- the private sector can gain this knowledge and use its strengths owned asset holding company, is moving this framework efficiently and effectively. forward and has mapped technology-specific needs and is One area in which the Roadmap offers value is by identifying offering tenders to develop the projects that will contribute opportunities within the renewable energy sector. There are to NDC goals. Although Côte d’Ivoire has yet to increase its further opportunities for increased use of solar PV in both power generation capacity, it has made substantial progress in grid-connected and decentralized (distributed) applications, improving the existing transmission and distribution network including off-grid and energy self-supply options. Developing and restoring the energy sector’s financial viability. grid-connected solar power via auctions and programs like the The Generation and Transmission Master Plan, Distribution IFC’s Scaling Solar initiative may help to clarify the true price Master Plan, and Grid Automation Master Plan support the of solar development in the country. Significant hydroelectricity government in defining investment selection criteria that can (hydro) assets have already been developed and will continue help meet both domestic and regional demand, and ensure to grow. To date, agricultural companies have not seen a secure supply. For example, although Côte d’Ivoire’s grid strong business case for biomass power projects, but new is extensive, it needs to increase its connections through projects under development may change that perspective. The densification. This is being addressed in part by the largest Biokala project will provide an important test case for utility- International Development Association (IDA) loan to the scale electricity production. Wind power is also a possibility country ($325 million) in 2017. The loan aims to improve 4 with good potential that the government of Côte d’Ivoire is the transmission and distribution network to provide interested in exploring further. electricity access in 200 villages, and is complemented by The government has prioritized extension of the electricity additional concessional financing to support the government grid as the primary means of increasing electricity access, in consolidating the financial viability of the sector. These and is working with development partners to implement this. operations are critical to attract new private investors and However, further improvements to the grid to reduce losses achieve the government’s ambitious target of near-universal and incorporate proper grid code are needed. Côte d’Ivoire’s access to electricity by 2020.5 energy mix is dominated by dispatchable7 generation sources The Electricity Code passed in 2014 is another piece of (hydro and gas), so the grid is already capable of managing legislation that will harness the existing private sector interest the addition of intermittent renewable energy sources. This and continue to push innovative projects such as small- capability will be improved through smart grid technologies, scale grid-connected solar photovoltaic (PV) and biomass automation, and control systems. projects beyond proposals into implementation. However, Renewable energy also has a key role to play in energy access it is important that the code continue to include renewable- through decentralized solutions, including mini-grids and solar specific objectives and policies to support the continued sale home systems. While these often have a lower initial cost than and delivery of electricity to the grid. Autorité Nationale building the interconnected grid for distant sites, they can incur de Régulation du Secteur de l’Electricité de Côte d’Ivoire a higher cost per kilowatt hour (kWh) to generate electricity. (ANARÉ), the electricity regulator, is responsible for ensuring In the case of mini-grids this is offset against advantages such as speed of deployment and end-user economic benefits, Executive Summary 3 savings on grid interconnection, and potentially some sector to bolster scarce public resources. This approach helps reduction in losses, but a subsidy may be required to ensure the achieve the dual goals of reducing poverty and boosting shared government’s priority of matching grid-connected retail tariffs prosperity.8 is achieved. In addition, separate industries can be connected Through a series of structured public-private dialogues over using innovative business models: pay-as-you-go solar home the past 12 months, IFC and the Ministry of Petroleum, systems increase financial inclusion, often include the sale Energy and Renewable Energy Development have worked of efficient appliances on credit, and build customers’ credit with stakeholders to identify key constraints and solutions history, helping to attract investment. that will help achieve Côte d’Ivoire’s NDC target of 42 As a major producer of agricultural products, Côte d’Ivoire has percent renewable energy by 2030. The dialogues included ample feedstock for biomass production. The challenge lies in international and local stakeholders, including government securing a reliable supply of these feedstocks. The Roadmap departments, banks, trade groups, civil society, and private offers several options for how this supply chain can become businesses. Development partners included IFC, the World strong and dependable. For example, there are already plans to Bank, the AfDB, the Centre for Renewable Energy and Energy develop grid-tied biomass generation projects that can support Efficiency, the European Investment Bank, the European the eventual development of a mechanism that aggregates Union (EU), the French Development Agency, GIZ, the Japan supply, relieves the burden on individual agricultural entities, International Cooperation Agency, KfW (German development reduces upstream risk, and stabilizes prices. bank), the United States Agency for International Development (USAID), the United States Trade and Development Agency, and the West African Development Bank. IFC supports Côte d’Ivoire’s bright future with an innovative partnership To date, IFC and the Ministry of Petroleum, Energy and Renewable Energy Development have engaged in three main To chart a course towards achieving these targets, IFC activities as part of the Roadmap process (see Figure 1).9 partnered with the Ministry of Petroleum, Energy and Renewable Energy Development to develop a Roadmap for • A launch event from December 14–15, 2017 in Abidjan, meeting the country’s renewable energy goals. This innovative attended by over 100 participants from electricity approach is among the first of its kind, and Côte d’Ivoire is companies, regulators, government agencies, development leading the way. The partnership strongly promotes the World partners, project developers, distributors, banks, investors, Bank Group’s Maximizing Finance for Development (MFD) and other private companies. approach, which seeks to sustainably leverage the private B OX 1 What is a roadmap? A roadmap is a specialized type of a strategy, and monitoring The process includes two types of strategic plan that outlines activities and updating it as necessary. activities (expert judgement and an institution can undertake to “Roadmapping” engages and aligns consensus, and data and analysis) and achieve stated goals and outcomes. diverse stakeholders in a common four phases (planning and preparation, This is best understood as an evolving course of action while building visioning, roadmap development, and process of creating and implementing relationships and generating solutions. implementation and revision). 4 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 FIGURE 1: Roadmap process WGs developed solutions for each of the priority work areas. Focus is on solutions that can be delivered in the near-term. This was an opportunity to Met with government (Energy finalize priority solutions, Ministry, Environment Working Group identify relevant case studies, and select Ministry, Investment Promotion Agency), private Meetings champions to carry companies, banks, and donors. solutions forward. Scoping Mission Working Group DEC Meeting 2 2017 AUG Mid-MAR 2017 2017 End-FEB JUL 2018 2018 Kick-o Workshop 100+ participants, including government, MAY 7–9, private (banks, developers, Draft Solutions 2018 corporates), and donors. Delivered Draft solutions provided as input into a larger renewable energy strategy under Deliver Final development by the Ministry. Roadmap Share top priority actions with Ministry and stakeholders at high-level workshop. • A Working Group Workshop from February 27 to March Implementing the Roadmap will help 2, 2018, hosted by IFC, to get input from renewable energy Côte d’Ivoire unlock private investment stakeholders. Involved direct consultations on potential Côte d’Ivoire’s energy sector is growing, but there is a need to actions to be included in the Roadmap. Preliminary key restore and improve its financial sustainability and solidify the solutions were identified in roundtables at that workshop. private sector’s willingness to invest. This will require more These solutions were verified in bilateral discussions with sustainable levels of short-term debt to be contracted within the stakeholders before and after the workshop. sector, and a plan to clear existing arrears must be agreed upon • From May 7–9, 2018, IFC hosted a second Working Group so the government can re-establish credibility in terms of timely Workshop to validate the identified solutions, structure payments. Finally, the effective management and application them effectively, and seek champions to drive them forward. of the cashflow waterfall—the tiered structure of payments The structured dialogues have included extensive bilateral according to seniority, on which investors have historically discussions with the government and other actors. relied, can be improved. Fortunately, strong government buy-in to the roadmapping process has contributed to the development Executive Summary 5 of a plan to move forward and reinvigorate the flow of private finance. This Roadmap process has been strongly supported by the government of Côte d’Ivoire—a vital step in ensuring the longevity and success of the proposed solutions. There is a strong network of dedicated institutions and champions willing to set these solutions in motion, and this Roadmap provides a step-by-step process that includes activities to achieve stated goals and outcomes. IFC aims to continue its support by helping to implement the solutions in line with its understanding of global best practice to help create viable markets for renewable energy. The road ahead The roadmapping process generated several key recommendations, most importantly the need to expand existing tender processes across various energy technologies. Progress has been made in the biomass sector with recent tenders issued for cocoa and cotton and lessons can be learned for other technologies as well. Specifically, clarifying and simplifying the necessary procedures and requirements can improve competitiveness for potential investors. Feasibility studies and expanded resource availability reports can improve competitiveness as well, supporting the private sector’s understanding of investment potential. Other recommendations to highlight include: • When needed, develop or clarify government policies and frameworks for project design and implementation to ensure transparency and effectiveness. • Institutionalize existing efforts to improve electricity grid access and resiliency. • Leverage global lessons learned across all sectors to develop appropriate financing structures and incentives for multiple technologies while incorporating quality assurance processes for new products, such as solar home systems. The main product of the Roadmap has been to engage a variety of stakeholders in consistent and constructive dialogue. The work done by project partners thus far has launched Côte d’Ivoire on a promising pathway towards meeting their 42 percent goal. To build on this success, the Roadmap recommends partnering with a local industry body and potential donors to jointly contribute to a broader private sector engagement platform. The platform could then serve as a bridge to the public sector and donor community to support ongoing development and implementation of clean energy solutions. Country Context and Background C ôte d'Ivoire is a dynamic country with one of the fastest growing economies in the world. Supportive fiscal policies, renewed political stability, and structural reforms to improve the business investment climate have led to a strong surge in economic activity and unprecedented GDP growth. The country had an average real growth rate of 8.5 percent per year (among the highest in Sub-Saharan Africa) from 2012 to 2015, driven by agriculture, services, industry, increased domestic demand, and growing investment.10 The agricultural sector is the backbone of the Ivorian economy, accounting for 25 percent of GDP and more than three-quarters of non-oil exports.11 Two-thirds of households depend on agriculture for their employment and income.12 The economic outlook for the next three years is positive, based on an expected average growth rate of about 7 percent, moderate inflation, prudent fiscal and monetary policies to control public finances, and continued reforms to improve the business climate and facilitate the efficient use of public-private partnerships.13 From a longer-term perspective, this economic environment is expected to increase energy consumption by an estimated 6.55 percent between 2014 and 2030.14 Côte d’Ivoire’s economic growth has been driven by commodity-based exports, which will remain key to growth in the medium term. The most important export crops—cocoa, rubber, oil palm, cotton, and cashew—are the main sources of smallholders’ income and the centerpieces of the country’s major farming systems. The impact of producing export commodities extends to other sectors through input provision, processing, transport, financial services, taxes, energy, and final consumption, giving export crops a key role in creating jobs and reducing poverty. Power With an installed generation capacity of 2,199 megawatts (MW),15 Côte d’Ivoire’s electrical system is the third largest in West Africa, after Nigeria and Ghana. Power capacity is dominated by natural gas-fired generation (1,320 MW) and Since 2011, net power demand has grown at an average rate hydropower (879 MW). Despite this significant hydropower 16 of more than 11 percent per year, outpacing the average yearly capacity, the generation mix—energy generated in megawatt GDP growth rate, which was almost 9 percent for the same hours (MWh)—is dominated by gas-fired power. Natural gas period. Due to increasing electrification, industrial activity, and independent power producers (IPPs) represent 60 percent of higher energy exports, peak demand has grown at an average total Ivorian production (with a 68 percent capacity factor), rate of 6.9 percent since 2011, reaching almost 1,300 MW in while hydro production is 40 percent (with a 27 percent December 2016. capacity factor). Traditionally, contract structures have 17 Power demand is expected to continue to grow at more than favored gas producers. As gas capacity increases under the 7 percent per year until 2025, driving demand for limited same contractual framework, it is difficult to displace gas natural gas, which is needed for industry and gold mining.19 production with renewables. Therefore, while in the near-term In addition, Côte d’Ivoire is a net exporter of electricity, with gas is cheap because of offshore supplies, in the longer term grid connections to Benin, Burkina Faso, Ghana, and Togo.20 more diversification will be required. Its export commitments to other West African Power Pool21 The 2011 National Strategic Action Plan for the Development countries will expand with the expected 2019 completion of of the Electricity Sector aims to increase total installed capacity the Côte d’Ivoire-Liberia-Sierra Leone-Guinea transmission to 3,000 MW by 2020. This will be achieved through public- 18 line.22 Another contributing factor is the “Electricity for private partnership arrangements, with hydropower and solar All” program (Programme Électricité Pour Tous), which was as priority technologies. The increased capacity will allow Côte adopted in 2014. Electricity for All aims to annually connect d’Ivoire to meet growing domestic demand and maintain the 200,000 households to the electricity system, achieving a 60 country’s status as a regional energy hub. percent access rate (1 million households) by 2020.23 Gross electricity generation in 2016 was more than 10,000 Despite the government’s aim to develop a better balance in its gigawatt hours (GWh), up from 8,607 GWh in 2015. Power energy mix to reduce reliance on fossil fuels, thermal generation consumption (net of energy losses and exports to neighboring is expected to grow. About 1,340 MW of new combined cycle countries) is about 6,400 GWh (8 percent higher than in 2015). gas turbine capacity is being developed and a 700 MW coal FIGURE 2: Market share and generation mix (2017) Market share by installed capacity (MW) Generation mix by production source Oil (Vridi) Aggreko Hydro IPP CIE 4% (CIE) 20% 27% 27% 17% Azito Energie IPP 73% 36% Natural Gas CIPREL (CIPREL, Azito, Aggreko) IPP Country Context and Background 9 plant is planned in San Pedro, although it has questionable • Biomass: The government has announced plans to include viability and low support. There are also questions as to 24 biomass-fueled generation capacity in the energy mix by whether there are cost-effective renewable alternatives to these 2030 and has identified some pilot projects to develop and projects. build grid-connected facilities that can contribute to this target.30 They have also issued recent tenders for cotton and cocoa biomass. Proposals are mainly for small-to- Renewable Energy Potential medium scale power from agri-processors and private There is strong potential for renewable energy investment in project developers. The biofuels sector is still in its early Côte d’Ivoire. IFC’s 2016 Climate Investment Opportunities stages, but biogas pilot projects and bioethanol are being in Emerging Markets report found that meeting the country’s investigated using sugarcane, maize, and sweet sorghum. NDC will create an estimated $10 billion25 in investment A comprehensive mapping study could inform a national potential in climate-smart sectors, $9 billion26 of which is tied biomass strategy that includes strengthening the agricultural to the 42 percent renewable energy target. The private sector sector’s capacity. is expected to make up the bulk of these investments, with • Variable generation (solar and wind): Solar and wind government support. This Roadmap provides guidance on resources are extensive, but their full potential requires how Côte d’Ivoire can work towards achieving this objective, further study.31 An important part of this process is to identifying relevant stakeholders, their roles, and the steps include grid connectivity plans because the country’s highest that will make generating the required investment possible. irradiation is in the northern region, where there is less Potential projects and solutions include: demand. However, with the grid updates specified in the • Hydro: With an estimated capacity of more than 879 MW Generation and Transmission Master Plan, these resources —which can theoretically generate about 700 GWh per can be delivered nationally. As with other energy projects, year—Côte d’Ivoire has good potential for hydropower an improved and simplified tender process can bring in new development.27 To date, the Soubré development (275 MW) investors eager to enter the growing market in grid-tied, off- on the Sassandra River is the most recently commissioned grid, and mini-grid/distributed generation. project. Hydropower projects in the pipeline for the next 10 years include Singrobo (44 MW), Gribo Popoli (112 MW), Boutoubré (156 MW), and Louaga (283 MW). The Ivorian government has identified 33 other hydro projects which have been financed, for a total capacity of 3,883 MW (including Tahibli, Daboitié, Tiboto, Tayaboui, and Gao).28 The Ministry of Petroleum, Energy and Renewable Energy Development is planning the development of at least 81 MW of small hydropower projects before 2030. The EU also has plans to develop several new sites. Twenty potential sites with individual capacities between 1 MW and 12.5 MW were identified in a high-level study.29 When combined with improved access to quality information about existing resources and revised high-level resource studies, these projects are just the beginning. A new policy and regulatory framework can help support priority sites to achieve maximum energy potential and open the market to new players. 10 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 Côte d’Ivoire’s Innovative Vision to Attract Investment I n its NDC, Côte d’Ivoire set a target to have 42 percent of its energy produced by renewable energy by 2030 (with a breakdown of 26 percent large hydro and the other 16 percent into “other”—solar biomass, small hydro, and wind).32 The National Action Plan for Renewable Energy outlines plans for installed capacity (MW) and generation (GWh).33 The projections are ambitious, partly because they give high capacity factors34 to hydro (60 percent for small, 46 percent for large) and biomass (84 percent), but they show the 42 percent target being achieved in generation (MWh). CI-Energies has published a pipeline of energy projects, some of which are for renewable energy.35 It is estimated that even if all these projects are built, there will still be a 13 percent shortfall in installed renewable energy capacity by 2030.36 Photo © Dominic Chavez / IFC 12 FIGURE 3: Indicative pathways for scaling grid-tied renewable energy based on government plans (MW) 3,000 2,500 2,000 1,500 1,000 500 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Solar PV Biomass Small hydro (up to 30MW) Large hydro (above 30 MW) Source: Plan d'Actions National des Energies Renouvelables (PANER) (2016) TABLE 1: Installed capacity (2017, 2030) 2017 2030 Installed capacity (MW) 2017 actual 2030—plan 2030—pipeline Thermal—gas 1,320 2,548 2,728 Thermal—coal 1,400 1,400 Hydro 879 1,891 1,891 Solar 420 320 Biomass 500 236 Total installed capacity (MW) 2,199 6,759 6,575 Total thermal 1,320 3,948 4,128 Total renewable energy 879 2,811 2,447 Shortfall vs. plan -13% Source: CI-Energies Reference Document (February 2018), Developpement du Secteur de L’electricite de la Côte d’Ivoire. Côte d’Ivoire’s Innovative Vision to Attract Investment 13 To achieve its targets, Côte d’Ivoire will need to consider Using the CI-Energies pipeline for each source of energy, increasing the number of high-likelihood renewable energy IFC estimates that delivering on these plans could create an projects in the pipeline. The pipeline plan should be aligned investment opportunity of over $4.7 billion.37 with the targets to ensure consistency and communicate the government’s objectives to investors. FIGURE 4: Annual costs of implementing renewable energy project pipeline ($M) $1,200 $1,000 $800 $600 $400 $200 $0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Hydro (dam) Hydro (RoR) Solar PV Biomass Source: CI-Energies Reference Document (February 2018), Developpement du Secteur de l’electricite de la Côte D’ivoire 14 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 FIGURE 5: Total capacity and costs of identified renewable energy pipeline to 2030 ($M and MW) $429 $484 236 MW $258 320 MW 936 MW 76 MW $3,592 Hydro (dam) Hydro (RoR) Solar PV Biomass Source: CI-Energies Reference Document (February 2018) utilizing cost/MW information from pipeline using XOF/USD exchange rate of 556.56 as of May 16, 2018 TABLE 2: Costs for installation goals identified in pipeline cost ($/w 2030 new build Source installed) pipeline (MW) Total Cost ($M) Hydro (dam) $3.84 936 $3,592 Hydro (RoR) $3.40 76 $258 Solar PV $1.54 320 $494 Biomass $1.82 236 $429 Total 1,568 $4,773 Source: CI-Energies Reference Document (February 2018). Using XOF/USD exchange rate of 556.56 as of May 16, 2018 Côte d’Ivoire’s Innovative Vision to Attract Investment 15 16 Hydropower Status Today, electricity in Côte d’Ivoire comes from a mix of thermal (mostly natural gas) and hydropower generation sources. As shown in Table 3: Installed capacity (2017), total installed electrical generation capacity was 2,195 MW38 at the end of 2017, including 879 MW in hydro capacity (seven hydroelectric stations). TABLE 3: Installed capacity (2017) Installed capacity % of Plant Type (MW) total Soubré Hydro 275 13% Taabo Hydro 210 10% Kossou Hydro 174 8% Buyo Hydro 165 8% Ayame 1 Hydro 20 2% Ayame 2 Hydro 30 2% Faye/Grah Hydro 5 0% Total hydro 879 42% CIPREL CCGT 543 25% Azito Energie IPP CCGT 430 20% Aggreko IPP Gas 200 9% Total gas 1,173 53% Vridi Tag 5000 OCD, 100 5% IGCC Total HVO-Oil 100 5% Total installed capacity 2,152 100% Source: IFC elaborations on CIE, ANARÉ, operators’ websites, excluding solar PV and biomass. Photo © Arne Hoel/The World Bank Côte d’Ivoire has substantial untapped hydroelectric potential, Almost all thermal power generation is owned and operated but still relies on limited natural gas to fuel its generation by the private sector, representing 60 percent (55 percent gas, capacity. Natural gas-fired plants represent 55 percent of total 5 percent oil) of Ivorian electricity generation in terms of MW installed capacity, all run by independent power producers. installed, and 82 percent of energy generation in terms of GWh Hydropower stations represent 40 percent of the total and are all (see Figure 6). The hydropower plants are all state-owned. managed by the private utility Companie Ivorienne d’Électricité Since 2011, power generation has increased by 10 percent per (CIE). The oil plant Vridi Tag 5000, controlled and managed by year, reaching 9,939 GWh at the end of 2016 (see Figure 7).40 CIE, represents the remaining 5 percent of capacity.39 FIGURE 6: Breakdown of power generation supply (% total GWh produced) 100% 2% 7% 7% 3% 3% 2% 90% 80% 70% 70% 60% 67% 70% 73% 81% 82% 50% 40% 30% 20% 29% 25% 23% 23% 10% 16% 15% 0% 2011 2012 2013 2014 2015 2016 Hydropower Natural gas (CIPREL, Azito, Aggreko) Oil (Vridi) Source: IFC elaborations on ANARE (Rapport d’Activités, 2015), CIE (Rapport Annuel, 2016).41 FIGURE 7: Power generation supply (GWh) 12,000 236 10,000 295 534 281 8,000 494 97 6,000 8,187 5,971 6,901 4,000 4,733 5,306 4,228 2,000 1,744 1,789 1,727 1,900 1,340 1,516 0 2011 2012 2013 2014 2015 2016 Hydropower Natural gas (CIPREL, Azito, Aggreko) Oil (Vridi) Source: IFC elaborations on CIE, ANARÉ (2016)42 Hydropower 19 Large hydropower is one of the most cost-effective generation Challenges options in the country. Through CI-Energies, the government intends to ensure that no more than 60 percent of generation MANAGEMENT OF EXISTING HYDROPOWER capacity is made up of a single technology and is targeting ASSETS a 30 percent contribution from hydropower.43 The country The average existing hydropower capacity factor was has considerable potential for hydropower, with an estimated 26.7 percent in 2016,48 below an average global factor of capacity of more than 1,900 MW, which could generate about 50 percent for new projects.49 This low capacity is partly due 10,000 GWh per year. However, these assumptions are based to take-or-pay commitments. Although favorable to IPPs, these on studies conducted in 1979, and probably do not reflect the commitments can lead to inflexibility in the management of capacity that can be economically developed within the current generation facilities and even force water spillage. As a result, environmental and social performance standards. There remains energy produced by the IPPs must be produced and purchased significant untapped hydroelectric potential, but only one hydro as a priority. This arrangement can increase the complexity of plant has been built in the past 30 years: The Soubré project developing a cost-effective, efficient development plan. (275 MW) was commissioned on the Sassandra River in 2017, with financing from EximBank China. It will be transferred to AT T R A C T I N G T H E P R I VAT E S E C T O R CI-Energies.44 Other potentially attractive hydro sites are not yet at sufficiently advanced stages of technical preparation to be Most hydropower project memoranda of understanding for the commissioned before 2020. Hydropower projects in the pipeline next 10 to 15 years have been allocated to private developers. over the next 10 years include Singrobo (44 MW, concession It is important to consider potential delays to projects and the agreement signed), Gribo Popoli (112 MW, concession effect this could have on private developers. Private companies agreement signed), Boutoubré (156 MW), and Louaga may hesitate to invest heavily in much-needed viability studies, (280 MW).45 There are substantial opportunities for public- which may not guarantee that the project will move forward private partnerships in the sector. once the studies are completed. More broadly, a lack of existing demand and performance data from the power sector makes The Côte d’Ivoire government has also signed several memoranda it difficult for private developers to know if these are solid of understanding with private developers on other sites (Gao, development opportunities. In addition, lack of competition Tayaboui, Aboisso, Daboitié, Kouroukoro, and Tiboto). The makes it difficult to achieve the best price for each project. studies are at various stages.46 Challenges include increased social While IPPs have historically been the favored structure, future and environmental change since the sites’ potential was originally projects will likely involve private sector participation at the assessed. In addition to these medium/large hydropower engineering, procurement, and construction stages, and be projects, the Ministry of Petroleum, Energy and Renewable transferred to CI-Energies on completion. Energy Development is planning to develop 81 MW of small hydropower projects before 2030. In addition, 20 potential sites with individual capacities between 1 MW and 12.5 MW have Potential Solutions also been identified. IMPROVE THE QUALITY AND A Master Plan for hydropower development in Côte d’Ivoire T R A N S PA R E N C Y O F I N F O R M AT I O N A B O U T was prepared by the government in 2014. The list below shows HYDROPOWER RESOURCES AND THEIR the distribution of existing (in bold) and planned hydropower D E V E LO P M E N T projects from upstream to downstream for each main Côte • Review existing data and identify gaps in data availability d’Ivoire river basin.47 and quality. • Sassandra River basin: Gao, Kouroukoro, Tayaboui, Buyo, • Develop consensus among stakeholders on how to capture Soubré, Gribo Popoli, Boutoubré, Louga. high-quality, relevant data that is useful for projections. As a • Bandama River basin: Kossou, Taabo, Daboitié, Singrobo, start, publish data on who owns existing hydrological data, Tiassale. so that developers can provide information from active sites continuously. This will allow potential stakeholders • Comoé River basin: Ayamé 1, Ayamé 2, Aboisso. to compare projections and actual production, and help • Cavally River: Tiboto. 20 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 the government identify the impacts of climate change and more. Because developers have found detailed safeguard other threats. studies necessary but expensive, the government could explore new ways of funding them.51 For example, the government D E V E LO P A C L E A R G OV E R N M E N T could conduct a high-level study and share these results with FRAMEWORK FOR HYDRO PROJECTS interested bidders in a transparent manner. The framework should incorporate systems for responding Improving the ability to identify whether the hydrology risk to environmental and social impacts, as well as guidelines for allocations between developers and the government are fair and acquiring land that are in line with best practices and lender examining whether they should be reallocated would support requirements. While the framework exists, it requires further further developer interest. Studies for site prioritization that institutional support from Ministries in charge of Energy, Water place a project in the context of a national strategy for resource and Forests, Environment, Construction, the Interior, Fisheries, use could draw private interest by signaling its role in a broader and Agriculture to be fully implemented. This approach should public sector strategy. bear in mind the cost of feasibility studies.50 A D J U S T C U R R E N T A P P ROAC H TO REVISE EXISTING HIGH-LEVEL RESOURCE S I T E P R I O R I T I Z AT I O N T O I N C R E A S E S T U D Y A N D I N C L U D E S I T E P R I O R I T I Z AT I O N O P P O R T U N I T I E S F O R N E W P L AY E R S I N T H E MARKET Using existing resource studies as a base, updated hydrology data on river basins should be incorporated by Ministries CI-Energies has already overseen the attribution of potential in charge of Energy and Finance as well as CI-Energies to hydro sites for development. As such, a tender process for assess flows, storage, installed capacity, output of downstream these sites is not necessary. However, other sites could be sites, and institutional options for optimizing water resource approached differently. For example, the government could management. High-priority sites could include a pre- or full carry out feasibility studies, followed by a re-tendering feasibility study, a geological study, hydrology data, and process. Alternatively, it could conduct competitive bidding B OX 2 Developing Togo’s hydro sector IFC and the AfDB are supporting the The project will determine private using a competitive tender. Finally, development of Togo’s hydropower developers and financiers’ interest the project will review the legal and potential to maximize private sector in investing in and developing the regulatory framework, including investments. The project includes a best site. Research will include enterprise-level regulations and review of the sector’s structure and risks perceived, main operational fiscal issues on project finance and projected developments, with a focus constraints, preferred structure, and operational development (both for on energy balance and generation cost assumptions. After an analysis IPPs and public-private partnerships)— cost-related changes. The project also of risk allocations, and financial and and make recommendations on the outlines the energy sector’s overall operational implications from a future development of private sector- strategy and least-cost expansion public and private sector perspective, led hydropower generation in Togo. plan while considering the challenges the project will select two or three relating to national and regional priority sites out of eight and develop interconnection. a roadmap for these sites, possibly Hydropower 21 for developers who can carry out their own feasibility studies where appropriate. While the government will continue to own large hydro and CI-Energies will continue to manage it, tests could determine whether the private sector could efficiently manage the operation, maintenance, or rehabilitation of older sites. C A R RY O U T F E A S I B I L I T Y S T U D I E S T O P R E PA R E A T E N D E R P R O G R A M F O R S M A L L HYDROPOWER Tenders need to define the project in detail, including a feasibility study, in the request for proposal package. Such studies are time-consuming, expensive, and the government is more likely to conduct them with support from development partners. For example, the EU is preparing a project as part of Energos 2 that includes the development of eight small hydro sites totaling over 40 MW, including feasibility studies.52 To reduce costs, sites could be bundled and documentation and processes standardized. Working Group Contributors The following organizations participated in the Hydropower Working Group: • Bureau National D’Etudes Techniques et de Developpement (BNETD) • Électricité de France (EDF) • AfDB • Eranove • Platinum Power • CI-Energies • Direction Générale de l’Energie • Developers including Bandama and Sinohydro • EU • Oikocredit 22 Biomass Status Biomass energy—the use of organic products like plants and animal waste as fuel—can reduce households’ dependence on a power grid challenged by consistent connectivity. Agriculture is one of Côte d’Ivoire’s key sectors, providing a significant source of biomass for achieving the country’s 42 percent target.53 Using agricultural waste can support continued growth in the sector while harnessing a new energy source. Until recently, no large-scale biomass projects had been implemented in Côte d’Ivoire.54 In December 2017, a tariff agreement was signed for the 46 MW Biovea biomass plant— the first of its kind in the country—developed by Biokala at Aboisso. The plant is expected to use 400,000 tons of waste from palm oil production, to generate up to 288 GWh of electricity per year.55 Various agricultural operators and agri-processors, especially in the sugar industry, have been using biomass on a smaller scale to generate energy for their own use. Sources of fuel for generating power include sugar bagasse, palm husks, cotton husks, and cocoa, and there is 80 MW of potential installed capacity.56 Agri-processors and project developers have built a pipeline of proposals to develop and build grid-connected facilities that could contribute to the renewable energy mix. Additional small-to-medium power plants, including a 20 MW facility in Gagnoa and a 25 MW in Boundiali, are also under development.57 Small-scale municipal waste-to-energy projects (more than 15 MW capacity) are being developed, which will use biomass waste and landfill gas in the Abidjan area.58 The country’s agricultural sector produces more than 13 million tons of residues (byproducts) per year from growing and processing crops on farms, such as stalks, leaves, and pulp, as well as from forestry and wood processing.59 IFC estimates that, on average, about 9 million tons (70 percent of the total generated amount) would be available as fuel. The total technical potential for generating energy would exceed 1,200 MW, based on the assumed energy content of different types of steam and/or hot water for agricultural processing needs. residue. 60 Despite the continuing trend toward more local processing, the demand for thermal energy is likely to remain limited. Biomass technology is proven in Côte d’Ivoire, with strong participation from the EU and the French Development C O O R D I N AT I N G A R A N G E O F Agency. As part of the EU’s support for the selection of S TA K E H O L D E R S renewable energy IPPs across a range of technologies, it is preparing a study evaluating biomass resources and energy Managing negotiations among stakeholders remains a potential, and identifying potential sites, transport, and challenge, even for well-prepared projects. Biomass projects logistics requirements, and the heat and electricity needs would need to involve the Ministry of Agriculture and the of potential customers. It also supports the preparation of procedures for such engagement are not yet institutionalized. tenders and power purchase agreements for biomass and other To date, projects such as Biokala have been implemented on technologies. The EU supports the Ministry of Petroleum, a case-by-case basis. Scaling up biomass will require a defined Energy and Renewable Energy Development in preparing set of rules, such as acceptable protocols to confirm calorific regulatory texts for the energy sector and a non-electric energy value, availability of biomass, and security of supply to justify code for the government. expected electric output and its fluctuations. To date, most developers in Côte d’Ivoire have gained Challenges experience in large-scale thermal power plants and hydropower facilities. The technical risks of managing biomass as a volatile LOW D E M A N D F O R O N - S I T E T H E R M A L and unreliable supply into the grid will need to be identified, ENERGY as will the tariff structure for this renewable-based generation. In addition, legislation on including smaller-scale renewables While technologies may be proven, many business models that into the grid mix should be clarified, and a transparent project work in other countries are not directly applicable in Côte shortlisting procedure put in place. d’Ivoire, largely because excess heat cannot be used through a district heating system and the only use would be to generate B OX 3 Biokala: Demonstrating the potential of biomass in West Africa The only biomass project in Côte and during consultation with relevant ministries of Energy, Environment, and d’Ivoire with a signed power purchase government agencies. However, Agriculture needed to participate in agreement, Biokala, thoroughly even Biokala had to undergo a long the project development and approval covered required legal and regulatory consultation process to obtain a process, which took about two years. challenges related to coordinating license to operate, because biomass stakeholders at the development stage is a multi-disciplinary space. The Biomass 25 Additional legal and regulatory challenges related to understanding of these concepts and providing the technical coordinating stakeholders include: assistance that allows them to make needed investments, based on biomass offtake agreements, can help improve efficiency. • Lack of clarity regarding ownership rights and status of agricultural residue, preventing the incorporation of agricultural waste into project revenues to enhance Potential Solutions profitability. S T R E N G T H E N A G R I C U LT U R A L S E C T O R • Lack of regulation related to greenhouse-gas emissions. C A PA C I T Y H I G H C A P I TA L E X P E N D I T U R E S The government may benefit from a coordination body to ensure information exchange between agribusiness (and other sectors) An issue flagged by most private sector players, domestically and the power sector. This could also include biomass capacity and globally, is the relatively high capital expenditure building for government officials, cooperatives, and farmers. requirements of biomass projects. Depending on the project’s scale, capital expenditure would typically be between $2,500 D E F I N E A G O V E R N M E N T S T R AT E G Y and $4,500 per kilowatt-electric (kWe) of installed capacity.61 FOR BIOMASS AND CONDUCT A Most pipeline projects and opportunities for self-supply at agri- C O M P R E H E N S I V E M A P P I N G S T U DY processing facilities in the country are below 10 MW, which would push the costs up and make projects less economically The government could address some of the challenges discussed attractive. Expanding projects would help achieve better above by developing a vision and defining the regulatory and economies of scale, but peak demand of a typical processing institutional framework for the biomass sector, including facility would not exceed 10 MW, so the economic feasibility of how pricing for biomass is regulated and which institutions a project is largely predicated on its ability to feed energy into are involved, and coordinating energy, agricultural, and the grid. environmental regulations. This would include a feedback mechanism to capture best practices from successful projects F A C I L I TAT I N G M A N A G E M E N T A N D conducted in other countries. S O U R C I N G S U P P LY Mapping the country’s projects will provide an inventory Biomass-to-energy facilities are technically complex. of existing biomass projects, including status, completed Combustion-based solutions require a steam boiler and turbine, project studies, assessment of bankability, and readiness. while a biogas solution involves an anaerobic digester. Such Simultaneously, a stakeholder mapping exercise should identify equipment requires regular maintenance and its reliability players along the value chain. The various roles should be depends on locally available technical skills, contributing to detailed, including those of financial and research institutions operating costs. When considered as part of a cost-benefit and public authorities.63 This mapping process should also analysis, these challenges often make the total cost of account for potential environmental impacts and positive generating electricity uncompetitive, resulting in projects being externalities of biomass, potential health impacts resulting put on hold and rejected, especially if there is no grid feed-in from transformation of certain species, and the impact on agri- option. industrial players.6465666768 Another obstacle for uptake is the fact that much of the A supply chain mapping is also needed, including an inventory raw material is sourced from small-scale farmers (2–5 of the available types of biomass and different crop clusters, hectares) that are often scattered within 150 kilometers of a waste streams, and actors that could source the supply processing facility. This makes sourcing feedstock logistically 62 chain. This will help stakeholders understand the logistics, complicated and difficult to secure for both large and small- costs, and benefits of different collection and supply options, scale biomass projects, and adds to the cost. However, this various geographical boundaries, and the potential impact of will change as processing becomes more local, resulting in competition for feedstock on price stability. Ideally, the data growing demand for energy and more feedstock generated and results from this study would be provided in a one-stop- on-site. Additional guarantees on volume and price are crucial shop such as a web resource or unit within an agency. to ensuring bankability of these projects. Improving farmer 26 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 B OX 4 biogas plant Biomass to energy: Lessons from Kenya and Ukraine IFC has learned the following lessons attract sufficient investment, the in the world, demonstrating the during its long involvement in multiple benefits from such projects commercial viability of such biomass-to-energy projects: offer various revenue streams and technologies and their ability to reduce costs.64 reduce landfill waste.66 The Gorge Farm Energy Park in Naivasha, Kenya, is Africa’s first To minimize waste and reduce Also in Ukraine, Astarta has launched electricity producer powered by emissions, the supply chain must be a biogas facility at Hlobyne sugar biogas to sell surplus electricity to analyzed along with “end-of-pipe” plant, fermenting sugar beet waste the national grid. It produces 2 MW solutions. A $30 million IFC loan and other agricultural residues. The of power at a quarter of the cost of has led Mironovsky Hliboproduct to facility has a capacity of 150,000 cubic diesel power, demonstrating that introduce chilled poultry distribution meters of biogas a day, cutting the low-carbon sources of energy can to the Ukrainian market, reducing plant’s natural gas consumption by be low cost as well. The farm also losses and allowing the company 50 percent during beet processing.67 makes heat for its greenhouses and to expand internationally. In 2012, 65 Lowering consumption of natural natural fertilizer as a byproduct to the company built a biogas plant to gas reduces the company’s exposure replace expensive synthetic fertilizer. the highest international standards to fluctuating prices in the fossil This represents a huge opportunity, as to produce power (5 MW for 15,000 fuel market, and the company plans anaerobic plants using biomass from apartments) and heat (for 1,500 to use the alternative fuel to meet the 1 percent of Kenya’s landmass could apartments) using chicken waste. needs of its soybean processing plant. match the country’s entire current A second 20 MW biogas plant ($27 This is part of a $35 million investment installed electrical capacity of about million) will be completed in 2020, from IFC and other investors.68 1,800 MW. While there are concerns at the Vinnytsia poultry farm, which that the tariff may be too low to could be the biggest biogas complex Biomass 27 To secure a supply of biomass, projects could stay close to the Quality is also an important consideration—substandard supply and install smaller-scale model facilities covered by a feedstock and mishandling of source agricultural residue mini-grid, while replicating this design would allow for lower can lead to equipment underperformance or failure.70 This is costs as an aggregated project. However, aggregating supply is complicated by changes that are out of the developers’ control: done best on a large scale and storage may require more space severe climate changes and seasonal abnormalities can affect than the power production equipment itself. 69 project performance, but hedging/insurance products for the sector do not exist. B OX 5 Three approaches to developing biomass projects To date, there are three proven approaches to developing biomass projects requiring various levels of stakeholder engagement and partnerships: Integrate energy production Have a public agency provide biomass Identify business models for biomass directly with a biomass supplier as feedstock and charge electricity energy that are relevant to the demonstrated by Biokala. producers a capacity charge. This Ivoirian context, such as centralized separates the variables of electricity feedstock collection from a wider area production and feedstock supply, or aggregation of smaller plants each allowing arbitrage between gas and with a smaller collection radius, as well biomass production according to the as both off- and on-grid solutions. price of the fuel. This would require a Suggest (but do not restrict) the government agency to regulate. optimal size of biomass projects. 28 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 B OX 6 D E V E LO P P I LOT P RO J E C T S As demonstrated by a recent tender on cocoa and cotton biomass, private actors are willing to make proposals to build and manage power plants.71 However, the IPP must have clear information about both the supply chain and power plant because the two are deeply interdependent, and the public sector is unwilling to take the supply risk. Therefore, supply chains need to be proven through pilot projects before tenders can become viable and truly competitive. Transparent public- private partnership pilot projects could structure and prove the needed waste value chains, and demonstrate the viability of Photo © Dominic Chavez / IFC biomass projects in Côte d'Ivoire, encouraging more entrants into the market. However, these projects are difficult due to long timelines and scarce resources, and are likely to need concessional financing and project preparation support to share Accounting for the risks and achieve bankability. informal sector Considering these difficulties, pilot projects may not currently For any biomass project, the primary sources of be ideal priorities. However, they are worth considering as feedstock include forest products, agricultural a component within a larger approach, as they provide an waste, and municipal solid waste. In the opportunity to develop standardized tender documents and case of Côte d'Ivoire, biomass studies focus power purchase agreements. Piloting biomass projects, with on agricultural products, which is the main government support, will demonstrate business models and driver of its economy. Any structured study should aim to involve multiple stakeholders willing to share on biomass mobilization will need to consider experiences throughout the process. the feedstock supply chain. Apart from sugar, palm, and rubber—where industrial operations E X PA N D U S E O F M U N I C I PA L S O L I D W A S T E A N D A LT E R N AT I V E F E E D S T O C K can guarantee production levels—agriculture is generally practiced on a small scale by families, Commercial and municipal solid waste also present an which makes it difficult to guarantee volumes. opportunity for biomass projects. According to World Bank Modeling a strategy for producing and estimates, Côte d’Ivoire could generate up to 11 million tons of mobilizing biomass on agricultural products municipal waste a year by 2025—a 20 percent increase from means operating within the informal sector. 2015. Only between 30 percent and 40 percent is currently The following considerations are useful when collected, mostly in the Abidjan area.72 Generating energy from developing a strategy: waste could reduce the need for landfilling while preventing illegal dumping. However, the infrastructure for waste • How to guarantee biomass supply over time management remains underdeveloped and there is very little in quantity and quality from a sector largely private sector involvement. operating in the informal sector. Waste-to-energy projects need to be aligned with other forms • The actors who should be participating in of treatment, such as recycling and composting, which may be production and mobilization strategy. more economically and environmentally beneficial. Alternative • How to discern the value of biomass to uses of biomass (such as firewood and charcoal) that may produce energy in cases of speculation. put long-term supply at risk should also be considered. While • All steps necessary to protect and improve technical knowledge for project development is available, crops, land, the environment, the wellbeing additional operations and maintenance capacity is needed. of people, sustainability, and shared development. Biomass 29 Working Group Contributors The following organizations participated in the Biomass Working Group: • Holding Group EOULEE • SODEN • Investment Promotion Centre in Côte d’Ivoire • Ministry of Environment • Direction Générale de l’Energie • CI-Energies • EU • Finergreen • Eranove • LONO Variable Generation: Solar and Wind T here is considerable interest from the private sector in developing variable renewable energy (wind and solar) resources in Côte d’Ivoire.73 The current availability of dispatchable power (hydro, gas, oil, biomass) makes it possible to manage variable renewable generation, allowing such resources to play a greater role in the country’s future energy mix. However, to ensure a stable supply of electricity and prevent forced outages, the minute-to-minute rise and fall in electricity consumption needs to be managed and offset using additional supply (known as ancillary services).74 Traditionally, thermal and hydro generators provide ancillary services, but solar and wind could contribute. Within this context, the following sections discuss several submarkets for variable renewable energy currently emerging in Côte d’Ivoire. To differentiate between various timescales and address immediate needs, all three submarkets must play a role in reaching Côte d’Ivoire’s energy goals. These three submarkets are: utility-scale generation and grid integration, off-grid renewable energy, and mini-grid and distributed generation. Each section reviews the sector’s status (including relevant policies and projects), identifies challenges, and presents potential solutions. B OX 7 Various scales of electricity generation Off-grid Off-grid operations are generation systems (such as solar home systems) that are not connected to the grid. They are standalone installations that can power homes and businesses in remote locations or areas with poor grid reliability. Utility-scale generation Energy-producing projects that generate power from solar or wind and feed that electricity into the grid via a utility, usually involving a power purchase agreement. Projects are typically larger than 1 MW, but Côte d’Ivoire has some installations in the pipeline that will generate over 25 MW. The key factor is the ability of the system to connect to the grid. Mini-grid and distributed generation Mini-grid systems are typically under 10 MW, but are defined by their limited transmission and distribution networks. Variable Generation: Solar and Wind 33 Utility-Scale Generation and Grid rate, which measures the number of individuals living in Integration areas served by the electrical network as a proportion of the total population, is 78 percent.77 This means that a large The main approach to electrification in Côte d’Ivoire is portion of inhabitants in the country's electrified areas are not expanding distribution networks and connecting new connected to the network, even though they are close to it. One consumers to the centralized grid. The power grid plays a explanation could be the relatively high service connection central role in transmitting power from generation projects fees, which are about $250 in rural areas,78 in a country with a and distributing electricity to households, commercial poverty rate of 46.3 percent.79 In rural areas, these high initial enterprises, industry, and public sector entities. Therefore, service connection fees explain the even higher deficits. Other strengthening the grid and enhancing the flexibility of the potential explanations include the lack of subdivisions, the power system are paramount to increasing renewable energy uncoordinated physical arrangement and proximity of homes penetration. Whether the source of energy is dispatchable in settlements, lack of infrastructure (streets, plumbing, etc.), (fossil fuel, hydro, or biomass) or variable (wind, solar), it low investment in network extension, and general difficulties must be connected to the grid when generating and resilient to faced by CI-Energies in accessing some areas. For example, shocks such as adverse weather. the district of Abidjan (13 communes and over 6 million inhabitants) has 75 slums, containing more than 50 percent of C U R R E N T S TAT U S the city's population. Grid The government is planning to expand access to unelectrified The Ivorian transmission grid is 5,093 kilometers long and communities, and there are several international projects to based on two high-voltage levels: 90 kilovolts (about 2,800 increase the extent and resilience of the country’s grid. This kilometers) and 225 kilovolts (about 2,288 kilometers). It also is particularly important given Côte d’Ivoire’s power exports connects with neighboring countries—the West African Power and its increased focus on renewable energy. Solar installations Pool links Côte d’Ivoire with Guinea, Liberia, and Sierra Leone. and mini-grids can support the government’s efforts to achieve Côte d’Ivoire is increasingly considered to be a reliable exporter universal access to electricity. The National Program for and it has made further commitments to export electricity in Rural Electrification (PRONER), launched in 2014, aims to future. The distribution grid consists of 30 kilovolts and increase the penetration rate of electricity to 80 percent by 15 kilovolts, for a total length of 23,128 kilometers, as well as 2020 and the coverage rate to 100 percent of the population. 220 volt and 380 volt (18,807 kilometers) lines. CI-Energies Another promising governmental program is the Electricity operates the country’s power grid under a government for All program, which was started in 2014 and has a target of concession for which it receives remuneration.75 200,000 new rural and urban grid connections per year through a dedicated funding vehicle— the Fund for E4All—which would In 2016, transmission losses on the high-voltage grid were help eliminate high upfront connection charges. estimated at 6 percent, while distribution technical and non- technical losses were about 16 percent, and total energy losses Solar were 22 percent. These are considered high according to Solar PV can be harnessed in a range of ways, both on-grid and industry standards, but are among the lowest in the subregion. off-grid. It can provide lighting and electricity to a single home Still, they have improved gradually, dropping from 25 percent off-grid, or be incorporated into mini-grids that can scale from total energy losses in 2010. High grid losses in Côte d’Ivoire are several kW to many MW, and achieve higher economies of partly due to illegal connections to the network and damaged scale at utility level. Project lead times are among the shortest equipment, which increases the sector’s expenses. Distribution of any power generation technology.80 losses dropped 22 percent from 2010 to 2015 as a result of efforts to limit fraud.76 Côte d’Ivoire has good potential for solar power electricity production, with an average of six hours of sunshine a day. Côte d’Ivoire’s service rate, calculated by dividing the Solar potential ranges from 2–6 kWh/m2/day, with an annual number of households with electricity by the total number of potential for PV installations of about 10,325 terawatt hours— households, is 33 percent. This is relatively low in comparison many times higher than current consumption.81 to countries with a similar per capita income. The coverage 34 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 FIGURE 8: Direct normal solar irradiation in cases, they can be complemented by other energy sources Côte d'Ivoire such as biomass. • Auto-generation systems: These are larger projects that produce power locally and sell excess power to mini-grids or the primary grid. There is a pressing need to address the country’s low rates of electricity access and poor-quality supply. Over time it has become easier to rapidly scale up solar PV for distributed generation in support of improving access.83 Figure 9 shows how African PV project costs have dropped over time. Furthermore, the Ivorian national plan for power generation includes several on-grid, utility-scale solar PV projects. The government intends to select most of these projects on a competitive basis through calls for expressions of interest, followed by tenders. But projects can also be developed as unsolicited proposals. There are several solar investments under way in Côte d’Ivoire. Existing projects can help demonstrate value and prove business models. The Moroccan developer Nova Power is building a 25 MW solar PV plant in Benguébougou, in the northern Korhogo region of Côte d’Ivoire, with a total investment of $40 million. The plant is scheduled for completion by the end of 2018. The Ministry of Petroleum, Energy and Renewable Energy Development recently stated that the maximum price at which the facility should supply its power is 70 CFA/kWh ($0.12/kWh).84 The concession contract Source: © 2017 The World Bank, Solar resource data: Solargis. for the project was signed by the Ministry and Nova Power in November 2016. The country’s south has good solar resources, but the north The EU’s Energos 2 project is providing support to the tender receives the most sun (see Figure 8).82 There is less demand offer process for the selection of IPPs in renewable energy, in the north, but solar could be used to increase the number including pre-feasibility and feasibility studies, coordination/ of resources available to communities that depend on a sole support of the tender offer process, and legal and financial source of power. support for developing power purchase agreements. The French Solar PV plants could displace some hydro and thermal Development Agency and KfW are also considering support for generation during the day for use later at night, given that the tender processes and private sector engagement.85 peak load (1,350 MW) occurs after sunset. Other solar projects planned or under way include: Solar PV may be feasible at multiple levels in Côte d’Ivoire: • A 15–25 MW grid-tied solar PV project in Odienné, the • Auto-consumption standalone systems: These are smaller sunniest part of the country.86 systems primarily for households or businesses’ own • KfW, the German development bank (€27 million), and the generation, consumed in the building where it is produced, EU (€10 million) are building a 38 MW solar power plant without selling back to the utility. In general, they include in Boundiali and are preparing a concessional loan for the a solar panel and battery to run lights and/or cellphones. government. The plant will be operated by CI-Energies.87 Increasingly, these systems are being used to power larger commercial enterprises and light manufacturing. In some Variable Generation: Solar and Wind 35 FIGURE 9: Operating and proposed utility-scale solar PV project installed costs in Africa (2011-2018) 6 Central Africa East Africa North Africa 5 Southern Africa West Africa 4 2015 USD/W 3 2 Project size (MW 1.0 50.0 100.0 1 10.0 200.0 251.0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Year of installation Source: IRENA (2016). Solar PV in Africa: Costs and Markets. Wind way in Touba and Ehania. The EU is preparing to support the identification of wind energy potential as part of its Energos 1 There are some promising wind resources in the country, but program. measurements of potential have been limited to civil aviation. Côte d’Ivoire possesses a moderate-to-low wind regime with C H A L L E N G E S F O R U T I L I T Y- S C A L E wind speeds in the range of 5–6.5 meters per second (m/s) in G E N E R AT I O N A N D G R I D I N T E G R AT I O N several inland regions, including Bafing, Lôh-Djiboua, and Haut Sassandra, as well as coastal regions including Sud-Comoé The main difficulty for utility-scale developers lies in their and Grands-Ponts. These regions are considered to have good access to financing solutions. Other challenges include: potential for competitive wind projects utilizing modern large- • Higher costs for new technologies and geographies. rotor turbines on tall towers. To date, no detailed wind maps • Increasing tariffs. have been generated for the country; the development of a high- resolution mesoscale map would aid in this process. Figure 10 • Securing imports of equipment and value-added tax (VAT) illustrates average wind speeds from the Global Wind Atlas. 88 exemptions in an efficient and timely manner. No wind power projects have been built in the country, • Structuring projects in a way that attracts commercial although there are known private sector developments under finance, even at initial stages in project development. 36 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 Grid code compliancy and system integration of can pose additional challenges for the system. It is likely variable renewable energy that additional grid issues will emerge, such as transmission Increased system flexibility—whether through fast-response congestion driven by weather conditions. Concentrated dispatchable plants, stronger transmission, or improved system deployment of renewable energy may result in network operation—allows variable resources such as solar and wind to “hotspots” where grid-related challenges are magnified. play a greater role in the country’s energy mix. Modern grid- Grid codes provide the rules for interconnection of individual code compliant solar and wind equipment can support the grid power plants to ensure they are “good citizens on the grid.” For and enhance reliability. Challenges hindering scale include: variable renewable energy, grid codes help to ensure the fair • Ensuring tariffs reflect costs (especially for rural areas that treatment of generator owners and operators concerning grid are unconnected to the grid and face higher costs than connection while maintaining system stability and reliability. urban grid connections). The renewable energy grid code should be regularly revised to ensure its relevance to the system needs and the progress • Securing imports of equipment and VAT exemptions in an in meeting the renewable energy target using mini-grid efficient and timely manner. approaches. • Structuring projects in a way that attracts commercial Low electricity access levels90 finance, even at initial stages of project development. Electricity access stands at 62 percent nationally, although it International experience demonstrates that small shares of is much higher in urban areas (84 percent) than in rural areas variable renewable energy, typically between 5 percent and (37 percent, but rising). There are also significant variations 10 percent of annual generation, have no noticeable effect on across income categories, presenting additional challenges and the power system’s integrity and do not require additional opportunities. storage to be built. If the share of variable energy is less than 30 percent, the cost of integration is between $1 and $10 per Côte d’Ivoire’s main approach to electrification is to expand MWh, even in “inflexible” systems. 89 distribution networks and connect new consumers to the centralized grid, known as densification. The aim is to However, as the share of solar and wind energy in total connect all villages located less than 20 kilometers from the generation increases, their variable, non-dispatchable nature FIGURE 10: Average number of weeks to get connected to electricity Ethiopia Rwanda Niger Gabon Togo Ghana Zimbabwe Nigeria Côte d’Ivoire Cameroon 0 10 20 30 40 50 60 70 Average time for firms to get connected Average time for households to get connected Sources: Survey estimates; World Bank 201890 Variable Generation: Solar and Wind 37 national grid. This means there are 849 villages with over 500 Variability of PV generation households each to be electrified in the next two years. This Energy storage allows for PV-based distributed/local generation will require substantial grid rehabilitation and upgrading.91 and integration into the national grid, but, despite rapidly Lag in transmission and distribution network falling costs, energy storage systems are expensive and the investments significant upfront investment required is difficult to overcome without government support or low-cost financing.96 Energy Transmission and distribution networks need an update and storage systems require expertise to operate effectively and are overloaded. Historically, rehabilitation and reinforcement their services are often not properly valued within existing funding availability has been scarce, but there have been recent energy market regulations. That said, it remains an option in efforts to leverage existing funds over the past five years. light of recent projects that are proving viability. For example, Development partners including the World Bank, the EU, the existing World Bank work in Burkina Faso and Guinea-Bissau AfDB, the French Development Agency, China, and the West and potential projects in Senegal, Madagascar, and Central African Development Bank have committed $1.5 billion dollars African Republic are striving to implement storage solutions to support the government’s efforts. The World Bank Electricity for solar energy. Transmission and Access Project has allocated $115.6 million to upgrade and reinforce priority transmission lines and $95.4 Lack of clear project development procedures million to rehabilitate, reinforce, and extend distribution Côte d’Ivoire does not yet have a centralized source of easily networks.92 While this investment represents a step in the accessible information on project development procedures right direction, more public sector contributions are needed to and regulations. A lack of transparent regulations creates achieve the government’s overall transmission and distribution uncertainty and increases risk. Issues related to land goals. ownership, which the country has experienced in the past, may Need for solar PV support and regulatory structure also present challenges.97 The country’s NDC calls for 400 MW of solar development P OT E N T I A L S O L U T I O N S by 2030 (8 percent of the generation mix), but supportive policies for this target have been limited.93 Legislation does not Institutionalize existing governmental efforts to stipulate feed-in tariffs, dispatch obligations, or any incentives improve on-grid energy access for PV and other renewable energy. PV projects are treated While electricity access rates remain low, there is a relatively like conventional generation projects, so they must negotiate high coverage rate. As such, one of the best solutions a power purchase agreement with the Ministry. Large PV to improve access is to enhance grid densification. The projects can get some benefits stipulated in the Civil Code and government has taken steps to improve densification through Investment Code, but small renewable energy projects are not PRONER and the Electricity for All program. PRONER eligible. Electricity law allows projects of national interest to represents the government’s strong commitment to electrify all receive support, so some biomass and PV projects can get fiscal localities with over 500 inhabitants in the coming years and benefits on a case-by-case basis, but these are reported to be maintain an annual rate of electrification of 500 new localities difficult and time consuming to obtain.94 until 2020. This program is expected to require capital Gaps in bankability of utility-scale PV projects investments of $675 million over a five-year period.98 Large-scale solar PV systems are becoming increasingly For low-income households, Electricity for All would finance competitive against fossil-fuel fired generation, but upfront the cost of both a grid connection and a standardized internal costs are still very high. The bankability of such IPP projects 95 house-wiring kit. Electricity for All is funded by the state, depends on the legal, regulatory, and contractual framework development partners and, given the significant funding needs, that provides adequate and predictable revenue streams over potentially by commercial loans from the capital market. a relatively long period of time. While Côte d’Ivoire has a This Fund is designed to bring access to electricity to around favorable regulatory framework for conventional-generation 1 million low-income households over five years. Given its IPPs, the environment could be improved for IPPs working in current mandate, CIE will be the main implementing vehicle solar PV. for the “last mile”; responsible for customer connections and 38 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 collecting revenues, via tariffs, from newly connected clients under the program.99 To solidify the long-term achievement of energy access, the government could clarify Electricity for All's funding structure and work to institutionalize it to allow for scaling up. The Ministry of Petroleum, Energy and Renewable Energy Development and donors could collaborate on establishing and financing the necessary framework, including through organizing a fundraising roadshow. Leverage lessons learned to reduce technical losses Addressing technical losses through system-wide analyses to improve the functioning of the transmission and distribution network is key and Côte d’Ivoire could leverage the experience of other countries in the region that have implemented effective solutions. For example, with IFC’s support Kenya Power & Light Company has improved its performance and expanded its grid in a more efficient manner. Kenya Power & Light Company, which owns and operates a wide electricity transmission and distribution system with over 2.6 million customers, has helped Kenya achieve one of the best connection rates in East Africa. But technical and commercial losses remained high. To address this challenge, IFC provided a system-wide analysis to quantify the breakdown of losses and develop a long-term investment plan to reduce losses and improve efficiency. The opportunities IFC identified will save the company approximately $8.8 million each year and avoid over 23,000 tons of carbon. Ensure a clear and transparent regulatory framework, as well as general principles and procedures for capacity allocation; and support innovation and technological advancement The government, with support from CI-Energies, could explore options for improving technical grid stability and integrating variable renewable energy. To support these advances, the grid will need to be evaluated for its ability to transmit and export power. A high-quality translation of the Market Rules into English would help international market players. In addition, a study could be undertaken, including the following:100 • Improved guidelines about grid connection to the transmission and distribution system, with clarity on which connection costs (and eventual grid reinforcement costs) must be paid by the developers and by the grid company. • A fair and transparent methodology for setting charges that enable IPPs connected to the distribution network to sell their power back to the grid. 39 B OX 8 Facilitate access to land for sites to improve tender process and bankability In previous tenders, multiple bidders sought similar sites, which caused concern over land prices. For future tenders, the Ministry of Petroleum, Energy and Renewable Energy Development could clarify land titles before tenders for key sites and secure the land before the tender. The Ministry would also need to ensure that it is suitable for the development of a renewable energy project, considering factors such as land size, environmental concerns, grid access, and geotechnical risks. Community engagement is an important part of this process—the government will need to clearly communicate the proposed use of the land to the community. Intergovernmental cooperation with other Ministries in charge of Agriculture and Rural Development and Environment (to assess environmental risks) can support this process. Other relevant actors include the land registration authority, and the Agence de Developpement d’Infrastructures Industrielles. Elements that can be added to the existing frameworks to improve project financial viability include: • Guaranteed dispatch of solar generation. • A preferential offtake tariff and an indexation formula that addresses inflation and foreign exchange risks. • Instruments to support the offtaker’s payment obligations. • Clarity on who bears the risk of connecting the facility with the grid and transmitting power. The power of auctions 101 Take a programmatic approach to scale up solar power The government—particularly the Ministry of Petroleum, Auctions reveal the true prices of developing Energy and Renewable Energy Development—could build on a technology in a country, reflecting costs its recent experience with IPP tenders to develop a structured more accurately than perceptions created tender process for solar, and later wind and biomass. This could by low bid prices in other markets. They also integrate the principles of Scaling Solar (see box 10) to help allow the government to identify bottlenecks achieve the best possible prices. Such a program should clearly in equipment supply, ensure that products set out government targets and timelines, and help structure and services meet minimum standards, and financing and incentives. This could include a standardized avoid ad-hoc, unsolicited bids for renewable auction process and project documents, as well as some pre- energy projects. For example, across Sub- arranged loans and guarantees, developed through support Saharan Africa, competitive auctions are from CI-Energies and donors such as the EU, KfW, and the increasingly taking the place of feed-in tariffs, French Development Agency. The government could draw demonstrating the expanding power of lessons from these donors and IFC’s infrastructure group. CI- auction-based approaches. Energies Generation and Transmission Master Plan is a good starting point for confirming the size of projects, the sites to be developed, and the timing of the tender to be in line with grid reinforcement investments. 40 B OX 9 Energy auctions—success in Argentina 102 Less than 2 percent of Argentina’s process. They were able to do so by • Conduct bids in US dollars, if electricity comes from renewable applying the following bidding process possible. energy. Sixty percent of electricity is best practices:103 • Adjust tariffs so they can drop over generated from fossil fuels. Argentina’s • Determine clearly defined limits time. government is moving swiftly to on capacity installed for each change that, with goals to produce 20 Following this process, Argentina transmission node being auctioned percent of electricity from renewable successfully completed two energy to avoid future curtailment issues. sources by 2025, with intermediate auctions in October and November targets of 8 percent by 2018 and 16 • Adhere to renewable energy quotas 2016, awarding more than 2,400 MW percent by 2021. In 2016, Argentina to avoid distorted incentives. to local and international bidders. The embarked on a series of energy sector successful projects were primarily for • Recognize that requiring local reforms to establish a bankable, best solar (306 MW) and wind (721 MW).104 content could create perverse practice power purchase agreement The auctions are expected to usher in incentives. regime and energy auction. The $3.5 billion in financing over the next • Avoid making price caps public and two years.105 country aimed to achieve competitive use the average price from previous electricity generation costs and rounds as the cap for new rounds. increase investment in the sector. • Incorporate international IFC supported the government in arbitration. designing an improved bidding auction Variable Generation: Solar and Wind 41 B OX 1 0 Launch a wind resource study Wind generation is not included in the Master Plan due, in part, to a lack of detailed understanding of the country’s wind resources. It is known that certain areas of the country have a wind resource averaging 6 m/s or higher, which is sufficient for a competitive wind plant using modern low wind turbines on tall towers. As a first step, the government could initiate a wind mapping exercise to locate areas with high potential (assessing grid capacity in the area, logistics for transport and installation, road infrastructure, and environmental concerns). Once data is collected, it could either be shared with developers to assess viability, or the government could secure the land and have developers bid on a particular site. Working Group Contributors The following organizations participated in this Working Group: • Association Ivoirienne des Energies Renouvelables (AIENR) • PHAESUN/S-Tel Scaling Solar in Africa • E2IE (Entreprise Ivoirienne d’Integration Energetique)/Alturdyne Power System (part of A recent Scaling Solar bid in Senegal has Pinegrove Holdings) yielded two bids for utility-scale solar plants • Biotherm with a total capacity of 60 MW, which will produce electricity for under $0.05 per kWh • Nova Power (Senegal’s cheapest utility energy source). 106 • Greenwish This success follows the first Scaling Solar • Engie auction in Zambia, which delivered a groundbreaking $6.015 tariff, the lowest tariff • EOULEE/Gaia in Sub-Saharan Africa at the time. Scaling Solar • Direction Générale de l’Energie is now developing over 1 GW of solar power • CI-Energies in partnership with four African countries— Ethiopia, Madagascar, Senegal, and Zambia.107 • EU Auction prices reflect the situation in a country • KfW (levels of experience, quality of the solar • Finergreen resource, number of providers in the market and their experience), so very low prices may not be replicated in Côte d’Ivoire, at least in the short term. 42 Off-Grid GIZ is conducting a feasibility study to provide a three-year project, due to start at the end of 2018, with €5 million in Meeting Côte d’Ivoire’s energy needs and goals requires a technical assistance. This will include vocational education and variety of systems and models, and interest in renewable training for renewable energy and energy efficiency for the private energy technologies extends beyond the grid. While sector, additional modules on PV, and training for electricians to densification remains the lowest hanging fruit for expanding become renewable energy specialists. GIZ is also considering a grid access in the country, there is potential for decentralized three-year training program (resulting in a technical diploma) to solutions such as isolated off-grid renewable energy introduce new professions like PV technicians.111 production. Installing individual small-scale power units such as standalone solar systems present a viable solution CHALLENGES in remote areas located too far from the national grid and with population density too low to justify the construction Confusion surrounding appropriate progression of of mini-grids. Although off-grid installations make a limited technologies contribution to the 42 percent target, they can have a big While solar kits can provide socioeconomic benefits beyond impact on achieving rapid electricity access. electricity, they are seen by some as provisional pre-electrification One promising off-grid solution is solar home systems, which solutions—not a replacement for the grid. The government are much cheaper than connecting to the grid in most cases. 108 has stated that grid connection is ultimately the primary Given the declining costs of solar panels, the modularity of approach for electrification. End users will outgrow the level of rooftop systems, and the development of new business models, energy provided by the kits, and therefore need grid connected standalone solar is an option for communities without a grid electricity to be able to access all the services they need. But connection or those wanting guaranteed low prices for self- developers view solar kits as potentially transformational, generated electricity. Finally, solar kits are much cheaper than as mobile phones have been. Clarity is being sought on the connecting to the grid in most cases. Primarily focusing on grid regulatory approach for off-grid solutions, and the government’s connection will incur a huge cost for Ivorian society, which vision for these technologies either as provisional measures or as could potentially be invested in other priority sectors such as long-term energy solutions for the country.112 education. Need for financing structures and incentives Still under preparation, the World Bank’s Regional Off Grid Developers are trying to identify innovative approaches to Electrification Project (ROGEP)109 will provide financial financing standalone solar projects, including developing support and technical assistance to off-grid technologies. bankable business models (with and without guarantees and ROGEP’s $200 million funding to provide comprehensive external technical assistance). Financing various solar projects support across 19 countries, including Côte d’Ivoire, through will require a mix of concessional and commercial finance. market studies, technical assistance; promotion of private Traditionally, most small-scale renewable energy business investments and inclusive supply chains, complemented by models were based on equity financing. But, as the market for entrepreneurship support, a risk mitigation facility and access off-grid renewable energy grows, capital needs are changing. to finance including working capital for equipment importers Larger players are looking to raise debt and innovative business and debt financing for end-users, can help address gaps and models are increasingly being used. For example, developers enable growth in the sector. The Lighting Africa program, part are installing renewable energy systems on customers’ property, of Lighting Global,110 is supporting ROGEP by working with with a variety of payback mechanisms (turnkey, build-operate- governments and the private sector to make quality-verified transfer, rental, rent-to-own) and co-benefits (renewable energy off-grid solar lighting and energy products more readily credits and tax breaks).113 available in the country. It is working closely with ROGEP’s implementing agency, the Economic Community of West Côte d’Ivoire’s solar PV sector faces challenges relating to African States (ECOWAS) Centre for Renewable Energy and regulatory support, electricity prices, client base and awareness, Energy Efficiency (ECREEE), to draw new actors to the market qualified PV companies, and available financing.114 In the case and help existing players increase their sales. of small-scale rural electrification projects, transaction costs Variable Generation: Solar and Wind 43 are very high because projects are disaggregated. The risks for investors are also high, especially because financial institutions have little experience with rural electrification. For the market to gain experience, it must be allowed to develop. As a first step, this will require a supportive regulatory environment. P OT E N T I A L S O L U T I O N S Develop an off-grid strategy As part of a broader electrification strategy, the government could consider off-grid energy solutions in order to improve their viability. This should reflect a plan for solar home systems that includes direct sales and pay-as-you-go business models, that are also aligned with the ROGEP intervention. The strategy could be informed by a study that builds on the experience of more developed off-grid markets and defines the benefits and best practices for business models, including: • A cost benefit analysis of different product and service offerings versus electricity supply through the grid. The study could also capture the positive outcomes of using renewable energy solutions. • A satisfaction survey to get feedback from customers—this should cover smaller autonomous solar systems (those used in homes, schools, and health centers, for example), as well as income-generating solar systems in multiple payment models. • Best practices/policies implemented in other countries that successfully integrated solar home systems into their off-grid strategy (such as Kenya and Ethiopia). This could include an analysis of success factors and whether they could be transferred to Côte d’Ivoire. • A survey and map of areas where solar home systems have been rolled out, and where they are needed. Clarify VAT and customs duties for solar home system providers, and explore incentives to promote off-grid solutions through tax waivers115116 By providing more clarity on tax mechanisms, the government can ensure increased private sector uptake. Inconsistencies mean that companies may not be taking advantage of tax incentives. One option would be to publish an information note that sets out the tax treatment of solar home systems, particularly when they are sold on credit. B OX 1 1 East Africa: An off-grid market approach 115 The diffusion of solar energy in most • Tanzania: Like Kenya, Tanzania’s In addition, the purchasing power of Sub-Saharan African countries has solar home systems account for rural consumers has improved, as has been driven by government and between 75 percent and 80 percent transport infrastructure, proximity donor-supported projects. But this of total installed solar energy of PV supply, and consumer demand. is shifting—there is a transition capacity. Large-scale institutional Local champions (by training local PV towards market-based diffusion PV has mostly been driven by technicians and implementing the first and private sector involvement for direct government and donor demonstration projects) also play an private consumers, institutions, and procurement for rural schools, important role. villages, and from off-grid to mini- health clinics, and public buildings— A final point is the game-changing grids and large-scale grid-connected and is expected to continue to grow influence of mobile payments, which PV plants. This transition has been due to telecommunications and have seen considerable success in supported by enabling frameworks tourism. East Africa. Côte d’Ivoire has high such as innovative financing schemes, The adoption of solar has been mobile payment penetration rates. exemptions from VAT and import driven by a decline in prices for PV For example, in 2015, 99 percent taxes, standardized power purchase modules, making it increasingly of secondary school fee payments agreements, and feed-in tariffs. Some competitive compared to conventional were made digitally, with 94 percent of the most developed markets in East technologies; prolonged international done via mobile money. Within the Africa include: donor support for solar PV, which has electricity sector, companies such as • Kenya: The country’s strong stimulated both supply and demand in Orange have already implemented early lead in installed capacity, the market; and conducive framework mobile payment enabled solar kits in local industry, and PV business conditions provided by national rural communities.116 development has had positive policy governments through procurement spillover effects on neighboring and tax incentives. countries. Variable Generation: Solar and Wind 45 This includes when VAT is payable on credit sales, the ability The government could also establish customs duty reductions to charge differentiated prices for products sold on credit or or waivers for solar home system providers and quality- not, and how to obtain customs duty and VAT reductions certified products for developers. This would promote on the solar component of home systems. The Investment increased investment by reducing the costs, allowing Promotion Centre in Côte d’Ivoire and the USAID/Power developers to offer lower prices. The duties could apply to the Africa Transactions and Reforms Program could play a role whole system (not just solar panels), and would need to be as well. clearly established and applied. B OX 1 2 Innovative business models 117 Global business models for providing pay a daily or monthly amount energy supplier and a financial small-scale renewable electricity over a period of between one and institution (serving, for example, a include: three years, after which they own cooperative). The supplier provides the system. Alternatively, providers products and associated services • Retail/over-the-counter model: include basic appliances and while the financial institution Suitable for very small renewable recoup the cost of those appliances provides the consumer financing energy systems. The user buys the over time along with the cost of and collects repayments. solar lantern or kit from a private the solar/battery system itself. company and fully owns the • Energy service (utility) model: The These approaches were originally system. Public funds, multilateral company provides the equipment developed with concessional or bilateral aid, and the private to the end-user, who pays for the financing, but now they are banking sector can offer loans to service rendered. The company primarily commercial ventures. support such purchases. owns the system and the operating • Consumer financing (via partner company will need capital to buy • Pay-as-you-go consumer financing: financial institution): A consumer the necessary equipment. These are smaller household financing model based on a systems that can provide for basic partnership between a renewable lighting and energy usage. Users 46 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 B OX 1 3 Photo © Power Africa / M-KOPA M-KOPA: A replicable pay-as-you-go model Kenyan company M-KOPA Solar usually retails for $200 and includes cost-free energy for the lifetime of combines solar and mobile technology a solar panel, three ceiling lights, a the product (typically four years). The to provide affordable, clean energy radio, and charging outlets for mobile company has a 95 percent repayment to off-grid villages in East Africa. phones. The balance is repaid in rate from its customers, even though M-KOPA was established in 2011, one small instalments on a pay-as-you- most households are below the year after a Shell Foundation Review use basis through M-PESA, a widely $2/day poverty line. By January 2018, found that 15 percent of Kenyans are available mobile payment platform. the company had electrified more than connected to the national grid, while The payments are cheaper than the 500,000 homes in Kenya, Tanzania, 96 percent are connected to mobile equivalent daily cost of alternative and Uganda.119 phones.118 Customers pay a small fuels and, after one year, customers deposit for a solar home system that own their systems. They then have Variable Generation: Solar and Wind 47 FIGURE 11: Electricity access and mobile phone ownership, Sub-Saharan Africa, 2016 (% of rural households) 100 90 80 70 60 50 40 30 20 10 0 rk Be a a n Bu aso nt e di fr on . m d Co Co s Cô ng go d’ DR hi e G pia G on G bia G na Ke ea so a M L tho as a M car i b i am e N ia N er To Rw eria & da er ne . Le al Sw ud e az an nz d To a U go Zi am a ba ia e ep Si Se rin aw l o am a Et oir N iqu on bw l Le ny ag ri i Z nd Co Cha Ta ilan in ni go ib ra g an m b Ce Cam run ig or M n m an ha n ad ibe . A ro ab .R am o P F al ui te o, ig ga Iv An S e oz Bu M S. Electricity Mobile phone Source: Survey estimates; World Bank 2018120 Develop a national quality assurance process to help be for the Ministry of Petroleum, Energy and Renewable Energy buyers identify which products performed as advertised120 Development to provide a waiver for kits that have a single In some cases, different technologies are needed quickly, at a additional component (as long as that component is already lower cost, and with customization. For example, some markets part of an accredited solar kit sold in the country) or a single modify the standard solar kit to add more lights or a radio. component removed. Developers often create product mixes based on extensive This program should be voluntary in the short term—competition consumer testing in new markets to find the right product/ with electrification should be the primary objective. It should also price fit in each country.121 The burgeoning national solar home include a transition phase, which is usually included when new system industry should develop within a new assurance process regulatory texts are adopted, that allows existing operators to that guarantees the quality of products and service rather than obtain accreditation. For example, a 2020 effective date would focusing on kWh price regulation. Giving developers a year to give everyone a chance to certify new products. do such market research, testing, and assurance will ensure that Standards should support banks in supplying credit to developers the products available in the market reflect the needs of Ivorians. by helping to identify those providing the best quality product. The assurance process should be based on internationally Quality assurance could also facilitate customs clearance, if it is developed projects where possible to ensure that Côte d’Ivoire integrated with waivers for qualified equipment. adopts the best approach with high-quality products and does Develop a labor skill standard for solar installers not create costs for companies specific to the Ivorian market. International quality assurance standards have already been The Ministry of Petroleum, Energy and Renewable Energy developed for smaller systems such as plug-and-play solutions, Development could identify quality service providers to provide and can be adopted at the national level. Standards should also clear signals to consumers. This service review should include be harmonized with neighbors, particularly for larger systems, to companies’ recommendations for the proper disposal of ensure they are sustainable in the long term. One option would equipment at the end of its life. To allow rapid development of 48 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 this market, any accreditation system should be voluntary. This type of accreditation is less relevant for pay-as-you-go companies that provide plug-and-play products certified by entities such as Lighting Global. Additional actors include CI-Energies, project developers with possible support from development partners. This could be aligned with ECREEE’s support for the establishment of regional entrepreneurship development facilities and implementation of regional certification schemes. Define policies to facilitate access to solar home systems for low-income customers In defining policies, possible subsidy mechanisms and the risks associated with their implementation could be explored, along with the staggering of payments beyond three years, using results-based finance, conducting consumer awareness campaigns, or putting in place a financing scheme like the Electricity for All program. The Ministry of Petroleum, Energy and Renewable Energy Development could develop a national program for off-grid community-based systems focused on the needs of local communities can help expand entrepreneurial activities. Private sector players advocate for this approach, recommending support programs for solar street lights, youth centers with electrified activities, solar mills, hairdressers, cold storage, and the resale of treated water. Working Group Contributors The following organizations participated in this Working Group: • Schneider • Fenix International • PHAESUN/S-Tel • ANARÉ • E2IE (Entreprise Ivoirienne d’Integration Energetique)/Alturdyne Power System (part of Pinegrove Holdings) • Ministry of Environment • Direction Générale de l’Energie • Oikocredit • EDF • AIENR • Climate Economic Analysis for Development, Investment and Resilience/USAID Photo © SE4ALL B OX 1 4 Mini-Grids and Distributed Generation To date, the only existing solar installations are either isolated mini-grids or standalone off-grid systems in the case of remote villages, and rooftop systems installed by industrial companies and wealthier residential users (both connected and unconnected to the main grid).122 Most grid-connected rural electrification projects have been implemented with government support. Public lighting projects using solar street lamps are ongoing. The Strategic Action Plan for the Electricity Sector has plans to retrofit existing rural diesel grids with PV by 2030. The Master Plan for Rural Electrification indicates that all electrified villages in Côte d’Ivoire are located less than 20 km from the grid and hence will be connected to the national grid. In total, there are remaining 849 villages of over 500 households to be electrified in the next two years. Only around 100 of these villages are isolated, with small populations, and Mini-grids in Myanmar these will be electrified with off-grid solutions.123 Solar PV mini-grids have the potential to support the electrification plans Yoma Micro Power is a Myanmar-focused in these villages. micro-power plant operator, which recently closed a $28 million investment from IFC, There are several mini-grid projects under way, including: Norfund, and Yoma Strategic Holdings—an • Several ongoing public lighting projects using solar street- equity and debt facility. Due to the rapid lamps. reduction in the cost of solar panels and • The Strategic Action Plan for the Electricity Sector has plans batteries, solar-powered mini-grids have to retrofit existing rural diesel grids with solar PV. The plan emerged as a viable alternative for rural also aims to complete at least 12 pilot projects in rural areas electrification that can be deployed rapidly and involving household applications and isolated PV grids.124 financed with private capital. Investor Yoma Strategic Holdings is developing micro power • The European Investment Bank has signed a $25 million plants and mini-grids in Myanmar, launching financing plan for the installation of off-grid solar systems a 10-site pilot project in Sagaing Region, and to strengthen energy access in Africa.125 aiming to develop more than 2,000 micro • The USAID Power Africa Transaction and Reforms power plants by 2022. These power plants Program has recruited a consultant to support the Ministry were initially proposed to provide electricity of Petroleum, Energy and Renewable Energy Development to anchor tenants like telecom tower in the development of a mini-grid strategy for Côte d’Ivoire, operators. The mini-grid provides electricity as part of its Beyond the Grid program. to the surrounding communities, including • KFW is preparing to support the rehabilitation of households, schools, and other businesses. transmission lines in a “Green Corridor” as a prerequisite to Powering such anchors first provides a model connecting solar power plants in the north of Côte d’Ivoire.126 that may be replicable in other regions and countries.127 C H A L L E N G E S 127 Financial sustainability of the sector Tariffs have not been able to maintain pace with inflation and have not reflected the real costs of energy. This has potential effects on the long-term financial sustainability of the energy 50 BOX 15 sector, and has important implications for the integration of renewable energy projects given the level of tariffs that the government is willing to accept. Complex nature of distributed generation Distributed generation provides many benefits resulting from the proximity of generation and consumption. However, it also introduces complexity to a traditional centralized model of generation and transmission, creating challenges for utilities and transmission system operators. For example: • Third-party sales of electricity may displace the utility’s role with retail customers. • Utilities may need to upgrade distribution infrastructure to Photo © ESMAP accommodate two-way power flows. • The utility needs to manage variability of generation at the distribution level. In Niger, the World Bank • Distributed resources change the load curve of a utility. These challenges may generate opposition from existing Group is supporting players, including owners of hydropower infrastructure and the Public-Private IPPs benefiting from the current system. Infrastructure Advisory P OT E N T I A L S O L U T I O N S Facility Develop a mini-grid policy The Solar Energy Access Project has been Distributed generation is a central issue across the region, and launched for private sector-based delivery merits additional analysis and research to better understand of electricity services in rural areas, via a how to support this growing area. Developing a relevant policy public-private partnership. This will include a could support this process. Potential components include: technical, economic and financial assessment • Defining sites where mini-grids should be developed, or site (including ability to pay) of five concession selection criteria. areas, a framework for the development of • Creating licensing requirements and application procedures rural electrification (including selection of for different types and sizes of mini-grids. contract type), and capacity building. • Developing operational requirements including minimum standards of installations, quality of service, safety, environmental requirements, and provisions for connecting customers. • Connecting mini-grids to the national distribution network. • Developing commercial arrangements, tariff policies, and subsidy arrangements. 51 Analyze tariff, subsidy, and operating models to • Appropriate tariff options including fixed monthly fees and determine the right approach time-based tariffs. This approach can be applied to 96 mini-grid sites identified by • Household connection and domestic installation costs. CI-Energies and further sites to be developed. This will require • Support measures to develop productive uses of electricity. political vision and a compensation mechanism to ensure that operators do not lose money because of the social tariff. • Payment collection approaches. Relevant analysis could include: • Regulation options, quality assurance frameworks, and • Willingness to pay for electricity in rural areas. licensing procedures for mini-grids of different sizes. • Demand analysis and demand-side management options. • Compensation mechanisms in the case of the expansion of the national grid. • System dimensions and modular approaches to mini-grid generation capacity. Subsidy and financing models for mini-grid construction, expansion, and operation. • Generation technology options, including hybrid systems. B OX 1 6 Setting optimal tariffs for mini-grids Setting optimal tariffs helps ensure be difficult to determine). This that mini-grids earn a reasonable approach can be effective for rate of return and recover costs, keep mini-grid customers, who are likely customer rates affordable, and are to pay more for electricity than politically feasible. The most common national-grid customers. tariff structures are: • Cost-reflective tariffs: Allow • Uniform national tariffs: All operators to recover capital and customers in the same category pay operating costs and receive a the same tariff. defined, reasonable return. This can vary by technology and is set with a • Avoided-cost tariffs: Customer bills regulator.128 stay the same or below previous bills, while improving services (although determining costs can Photo © SE4ALL 52 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 B OX 1 7 Photo © Russell Watkins / UK Aid / Department for International Development Tanzania’s tiered regulatory approval process and support for developers to set cost-reflective tariffs 129 Tanzania’s electricity regulator has The lessons emerging from this mini-grid tariffs and there is no one adopted a dual approach that allows it approach include: best approach. Regulators may find to conserve resources used to review it helpful to conserve their efforts • Mini-grid tariffs demand separate and approve tariffs. Projects smaller by reviewing only large projects consideration from national than 100 kW do not need regulatory or small projects with persistent uniform tariffs, due to higher costs approval for tariffs, unless more complaints from customers. That of service. than 15 percent of customers file a said, mini-grids tariffs are generally complaint. For projects larger than • To successfully encourage private lower than what many customers 100 kW, developers propose a cost- investment, mini-grid developers currently pay for lighting and reflective tariff to the regulator for must be able to make a profit. If energy. approval or modification. Developers developers are unable to charge • Social tariffs are possible for mini- size their projects in response to this cost-reflective tariffs, subsidies may grid customers, but generally oversight. be needed. require a small surcharge on • There are many options in designing national tariffs. a regulatory structure to oversee Variable Generation: Solar and Wind 53 Working Group Contributors The following organizations participated in this Working Group: • Schneider Electric • SAGEMCOM • EOULEE Holding Group • ANARÉ • EDF • PHAESUN/S-Tel • BNETD • Green Invest Africa • E2IE (Entreprise Ivoirienne d’Integration Energetique)/Alturdyne Power System (part of Pinegrove Holdings) • Climate Economic Analysis for Development, Investment and Resilience/USAID • IVERTECH • AIENR • Engie • CI-Energies • Direction Générale de l’Energie • EU • BioTherm Photo © SE4ALL Cross-cutting Issues: Finance, Policy, and Regulation Status C ôte d’Ivoire is making considerable progress in developing and supporting financial and political infrastructure for renewable energy technologies. The Ministry of Petroleum, Energy and Renewable Energy Development expects to publish a draft strategy soon, and CI-Energies has established a project pipeline categorized by technology. A decree was published in November 2016 to support an energy efficiency strategy.130 Two essential elements of this decree concern the labeling of equipment and the banning of incandescent lamps sales, which will be mandatory by 1 January 2019 at the latest. International institutions are also contributing. The EU’s Energos 2 program will provide guarantee funds under its external investment plan and is developing a multi-building audit as part of its project on energy saving in public buildings, with additional funding from the French Development Agency.131 GIZ is conducting a feasibility study for a three-year project, due to start at the end of 2018, with €5 million in technical assistance. This will include vocational education and training for renewable energy and energy efficiency for the private sector, additional modules on PV, and training for electricians to become renewable energy specialists. GIZ is also considering a three-year training program (resulting in a technical diploma) to introduce new professions like PV technicians. KfW is considering a guarantee mechanism for renewable energy as part of the G20’s Compact with Africa, which aims to promote private investment in Africa, in collaboration with other development partners (the AfDB and the European Investment Bank). KfW is supporting several reforms under the Compact with Africa (with a total value as high as €95 million), which are under discussion with the government. This may include: • Doubling the “Green Corridor” Dabo Bouaké transmission line (up to €25 million in co-financing). This upgrade is needed to connect solar projects in the north of the country. • Conducting studies on the approach to renewable energy. Photo © Merklit Mersha / USAid • Electrifying rural areas. This may include different solutions financing will reduce as the country demonstrates success in the (grid extension, mini-grid, solar home systems), but will sector. emphasize private sector involvement. M A I N TA I N I N G A N E U T R A L , C O M P E T I T I V E Other projects include: PROCESS • Reducing grid transmission and distribution losses as part There has been considerable developer interest in Côte d’Ivoire. of the World Bank and the West African Development Globally, renewable energy development is best managed Bank-funded project to reduce grid losses. through technology-neutral competitive processes (see box • Replacing 250-watt lamps with more efficient 160-watt 10 on Scaling Solar), which emphasize outcomes rather than lamps as part of a project on efficient public lighting. picking technologies. An important consideration is the broader • Distributing 5 million low-energy lamps in residential areas. policy environment that contributes to project development and operating costs—these have remained high while There are also planned projects that are still to be implemented, technology costs have reduced. including energy audits and energy control in hotels, hospitals, and government buildings, and the labeling of household Renewable energy producers are interested in selling excess appliances.132 power back to the grid, and there is an opportunity for distributed generation to serve customers with specific electricity needs, such as within the mining and agribusiness Challenges sectors. The Electricity Code of 2014 provides a basis for liberalizing the sector, but ongoing negotiations to extend D E V E LO P I N G E X P E R I E N C E I N T H E CI-Energies’ distribution concession, as well as the need for R E N E WA B L E E N E RG Y S E C TO R secondary legislation, mean that developers are not yet able to There are many actors interested in renewable energy in the create commercial power purchase agreements with third-party country, including investors who buy and hold industrial off-takers.133 assets in the region, investment banks seeking well-structured Creating a track record and standardizing the process projects in need of financing, project developers and equipment will help encourage development. To attract investors, an suppliers, agriculture-processing companies seeking a use for overall development and implementation plan is needed. their waste products, and industry federations concerned about This could take the form of a tendering process that ensures energy provision reliability and cost. effective competition, a reliable off-taker for cost recovery, Discussions with these stakeholders have revealed their interest or standardized contract frameworks and cost-reflective in accelerating renewable energy investment in the country, tariffs. Policies need to address land tenure challenges and particularly solar, biomass, and hydro technologies. However, the government can further support large renewable energy several factors constrain private investment: installations by identifying and allocating land suitable for • Developers of biomass and waste management projects do development. The proposed revisions to the Investment Code not yet have in-country experience. in 2018 can further help to incentivize renewable energy development. In addition, developers need the latest information • Investors are waiting for a pipeline of well-structured on available incentives, grid connection policies, and new projects that are ready for financing. approaches for aggregating projects at a portfolio level.134 • Many local banks do not yet have sufficient knowledge and credit appetite to invest in the renewable energy sector. I D E N T I F Y I N G A P P R O P R I AT E I N V E S T M E N T P RO M OT I O N I N C E N T I V E S Private banks are showing greater interest in investing in renewable energy in the country, but sectoral understanding Côte d’Ivoire can learn from the approaches, policies, and and transactional experience needs to be increased. Local measures used in other countries to support investment in banks need more reliable information and training on business renewable energy, such as: models and finance options. Lack of information has led to • A preferential off-take tariff and guaranteed purchase of a perception of higher risks for renewable energy, affecting renewable energy during a relatively long period (such as financing costs. But these perceptions and the high cost of Cross-cutting Issues: Finance, Policy, and Regulation 57 10 years). The tariff can be set and applied to all similar Potential Solutions projects (feed-in tariff) or set through competitive selection (auctions and tenders). MAP EXISTING SOURCES OF FUNDING A VA I L A B L E F O R R E N E W A B L E E N E R G Y I N • Grid laws and regulations such as grid codes describing C ÔT E D ’ I VO I R E , I N C L U D I N G C O N C E SS I O N A L connection procedures and operational requirements for AND GRANT FUNDS renewable energy plants. Donors working in partnership with the government can • Fiscal benefits for renewable energy, including accelerated identify the types of financing available (grants, subsidies, debt, depreciation and exemptions from various taxes. equity), details for accessing funding, applicable project types, • Access to finance through investment grants and subsidies and the project stages that funders are willing to support. for renewable energy projects (for example, from a “green” Financial barriers should be explored and ways to address these fund); low-interest or zero-interest loans; loan guarantees; identified. green mortgages, which cover the value of the property and energy-efficient upgrades or installation of renewable energy E X P L O R E F E A S I B I L I T Y O F TA R G E T E D systems; improving permit and licensing procedures; and GUARANTEES raising awareness and providing guidance to developers Possible guarantees include partial risk guarantees, co- through a web portal or investor guidebook, for example. guarantees, and sovereign guarantees for different types Developers could benefit from a centralized source of of actors and projects, ranging from start-ups, to small accurate information about project development. Conflicting and medium-sized businesses, to utility-scale investments. information about government regulations and policies (for Guarantees for small-scale projects (between €0.5 million and imports, tariffs, and project development), available financing €10 million) could address the lack of financing solutions for from banks and other financial institutions, as well as auto-consumption and energy-efficiency projects. Development appropriate technologies and how to best develop them can finance institution-funded tools implemented by local banks often make projects challenging. could also be developed. Relevant government actors include the Ministry of Petroleum, Energy and Renewable Energy Development and Ministry of Economy. BOX 18 Off-grid solar financing in Togo The Africa Guarantee Fund, which helps financial institutions increase their financing to small businesses in Africa, has provided a 50 percent pro rata credit enhancement to debt financing of $4 million from Togo- based bank Union Togolaise de Banque to off-grid solar company BBOXX.135 Photo © Sameer Halai / USAid BOX 19 M A I N TA I N A N U P D AT E D I N V E S T M E N T P RO S P E C T U S F O R C ÔT E D ' I VO I R E ’ S R E N E WA B L E E N E RG Y S E C TO R I N C O N S U LTAT I O N W I T H T H E P R I VAT E S E C T O R Building on the work of the ECOWAS Centre for Renewable Energy and Energy Efficiency,136 this prospectus should promote renewable energy investment in Côte d’Ivoire by allowing investors to quickly understand the investment opportunity in the country. It would contain a profile of the sector and the investment opportunities it presents, a mapping of important stakeholders, descriptions of the projects in need of funding and their investment requirements, the resource potential of sites available for development, details of commissioned projects including cost and investment structures, and information on risks and their mitigation. ECREEE and other development Select donor programs in partners are important potential actors. Côte d’Ivoire D E V E L O P C A PA C I T Y B U I L D I N G / T R A I N I N G • The French Development Agency, O N T H E R E N E WA B L E E N E RG Y S E C TO R TO PROPARCO, and the EU have launched the I N C R E A S E FA M I L I A R I T Y W I T H T H E T Y P E S Africa Renewable Energy Scale-Up Facility OF PROJECTS, AND THEIR TECHNICAL, initiative, which includes a guarantee fund F I N A N C I A L , A N D R E G U L AT O R Y A S P E C T S 1 3 7 1 3 8 component (€10 million) to guarantee part of the investment in funds invested Building the capacity of banks to work with renewable energy by PROPARCO in companies operating in projects can enable them to more effectively appraise risks by the off-grid, mini-grid, and decentralized focusing on different market segments, associated business renewable energy generation sector in models, and financing options. This can be followed by Africa. This accompanies the initiative’s technical assistance from the Ministry of Petroleum, Energy study component (€12 million) to support and Renewable Energy Development and development partners public authorities in market analysis, defining such as IFC to support project evaluation and potential a regulatory framework, determining a financing solutions. tendering process, and establishing an off- In addition, the following actors could benefit from tailored grid and on-grid project pipeline.137 support from the Ministry of Petroleum, Energy and • The French Development Agency's Renewable Energy Development, CI-Energies developers, and Sustainable Use of Natural Resources development partners such as GIZ: and Energy Finance initiative provides • For government staff on project financing and legal concessional financing to encourage and technical aspects related to renewables, including financial institutions to fund renewable international best practice. energy and energy-efficiency projects. This • For developers to structure their projects to attract funding comes with technical assistance financing, leveraging existing sources of support available. and analysis to validate the viability of projects and their eligibility for the program. • For solar technicians, including hands-on training. These projects are then presented to the Installation and after-sales service is critical, especially as Sustainable Use of Natural Resources and larger systems are deployed. Development centers could Energy Finance banks for financing. To date, coach young people on how to develop these technologies, the facility has been deployed to partner which could help increase employment in the sector. This banks in Benin, Côte d’Ivoire, and Senegal would complement the training that solar home system (€30 million).138 59 B OX 2 0 developers already provide—which is currently not well publicized. Promoters could partner with the government to increase training programs, combining classroom and “in- the-field” training experiences. D E V E LO P A N D I M P L E M E N T A N O N G O I N G R E N E WA B L E E N E RG Y P O L I C Y M O N I TO R I N G F R A M E WO R K B A S E D O N E C OWA S EXPERIENCE ECOWAS member states have resolved to compile annual national reports on their national energy plans, as well as a summary of the main activities implemented to achieve the objectives during the previous year. ECOWAS will monitor the status of renewable energy and energy-efficiency policies and programs, and issue an annual regional inventory report. The next report is due in mid-2018. Photo © Ambika Adhikari / USAid The ECOWAS Centre for Renewable Energy and Energy Efficiency has undertaken a survey across Africa to assess positions on renewable energy. It used this information to Capacity building in develop the ECOWAS Renewable Energy Policy, which will allow for future monitoring of progress.139 This is an example green finance of monitoring that could be made more systematic in the future and greatly inform Côte d’Ivoire’s future policies. To accelerate investment in renewable energy, IFC plans to launch a new capacity C R E AT E A R E N E W A B L E E N E R G Y A N D building and training program for banks in E N E RG Y- E F F I C I E N C Y AG E N C Y A N D O N E - Côte d’Ivoire. This will help these banks better S TO P S H O P F O R I N V E S T M E N T P RO M OT I O N appraise risks by focusing on different market Lack of consistent information is a challenge and a barrier segments, associated business models, and to development. A one-stop shop for renewable energy financing options. information would be helpful for new and existing developers, IFC will first survey banks to assess their including forums to allow developers to share information. level of experience in renewable energy To prepare and maintain this platform, and to provide further investments. Based on the results, it would information, the Ministry of Petroleum, Energy and Renewable then partner with the Ministry of Petroleum, Energy Development with support from The Investment Energy and Renewable Energy Development, Promotion Centre in Côte d’Ivoire could consider creating a the Ministry of Finance, and the Investment coordinated renewable energy and energy-efficiency agency (or Promotion Agency to host a tailored designating one within an existing agency). The agency, which training program for bank CEOs and board would have a team experienced in the sector, would act as a members. The results of the Roadmap would one-stop shop for support and information for developers and be presented, together with technology financiers looking to invest. overviews, business models, and financial This agency could have a variety of functions, listed in order of solutions. This would lead to more targeted increasing responsibility: individual portfolio reviews with certain banks • Provide access to data or steer actors towards relevant to set a target for green/renewable energy sources of information, including applicable laws and lending tailored to their current portfolio. regulations, and guidance to developers as they obtain permits and licenses for project development. 60 B OX 2 1 Photo © Russell Watkins / UK Aid / Department for International Development Energy one-stop shops One-stop shops can come in many renewable energy business in the business community investing forms. There have been independent Kenya. It provides information on in energy. It connects the private national advocacy organizations renewable energy markets, market sector with the government to formed to help lobby on all issues actors, and technologies; conducts achieve successful public-private affecting the off-grid space. Examples training, capacity building, and partnerships in the energy sector, include the Kenya Renewable Energy quality assurance activities; and and with international investors Association 140 and Rwanda’s Energy networks and lobbies on behalf of interested in developing domestic Private Developers:141 the industry. energy projects. • The Kenya Renewable Energy • Energy Private Developers is Both are supported by the Global Off- Association is an independent a business-group platform Grid Lighting Association. non-profit association supporting coordinating and advocating for 61 • Provide training and capacity building, awareness raising, and sector consultation. • Provide an initial governance and institutional support framework for studies. • Provide a governance structure that involves multiple relevant ministries to improve inter-ministerial coordination. • Raise funding for programs. • Identify appropriate investment incentives. • Run or provide a window for tender processes and the development of pilot projects. Working Group Contributors The following organizations participated in this Working Group: • ECOWAS Centre for Renewable Energy and Energy Efficiency • Schneider Electric • African Legal Support Facility • ANARÉ • Fenix International • Green Invest Africa • PHAESUN/S-Tel • BNETD • AIENR • E2IE (Entreprise Ivoirienne d’Integration Energetique)/Alturdyne Power System (part of Pinegrove Holdings) • Climate Economic Analysis for Development, Investment and Resilience/USAID • ADERCI • Finergreen • KfW • Oikocredit (financing aspects mainly) • BioTherm • GIZ Photo © Russell Watkins / UK Aid / Department for International Development Next Steps U nder the leadership of the Ministry of Petroleum, Energy and Renewable Energy Development, producing this Roadmap and having the accompanying discussions with stakeholders has been one of the first comprehensive engagements by a country to attract private investment for its NDC. This approach has shown the benefits of consistent and constructive dialogue with the private sector, by capturing their needs and ideas on how to expand renewable energy in the country. A variety of technologies are available to support Côte d’Ivoire’s ambitious goals. Determining which of these technologies should be scaled and when remains a key step. Developers and banks want to grow this sector and this process has further strengthened their interest. The private sector actors convened through this process have signaled their interested in engaging with the government and other donors. While donors have developed an energy sector coordination platform among themselves and the government has already undertaken a range of activities in the sector, there is no consistent platform for engagement with the private sector on energy. As a first step, partnering with a local industry body and other donors could provide an effective approach for hosting this as part of a broader private sector engagement platform. The platform could then in the medium term maintain a sustained and coordinated dialogue with the public sector and donor community on clean energy as they continue to develop and implement solutions to attract private investment.142 IFC stands ready to support these efforts and champion this process. Annexes Resources HYDROPOWER IFC • Hydroelectric Power: A Guide for Developers and Investors.143 • Hydro Advisory website.144 • IFC Performance Standards,145 which include Land Acquisition and Resettlement.146 • The IFC Good Practice Note (Environmental, Health, and Safety Approaches for Hydropower Projects147) includes the effects of hydro projects on human settlements. The note discusses how to minimize impacts as well as how to manage involuntary resettlement if required. World Bank • Global Practices on Hydropower and Dams.148 • The Good Practice Handbook (Environmental Flows for Hydropower Projects: Guidance for the Private Sector in Emerging Markets149) includes information on environmental flows to help manage the effects on ecosystems and people. Other • Société d’Etat pour le Développement Minier de Côte d’Ivoire.150 • The master plans developed by CI-Energies on generation-transmission, distribution, automation-telecontrol, and rural electrification create a planning framework for investments in the sector for the period 2014 to 2030. They include plans for developing generation capacity by technology, and year-by-year projections for commissioning specific hydro sites. These master plans are expected to be updated in 2019. BIOMASS IFC • The IFC resource guide (Converting Biomass to Energy: A Guide for Developers and Investors),151 which is excerpted below: FIGURE A1: Main Contracts for a Biomass-to-Energy Project Equity Banks Authority for providing approvals project loans Loan Own agreement Own energy biomass consumption on site Biomass-t0- Energy Project External External heat biomass Biomass supply and power suppliers agreement Plant construction PPA customers contracts O&M contractor Construction and Insurance Consultants (if outsourced) equipment contractors company 66 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 World Bank • The World Bank tool to assess the financial feasibility of biomass projects includes training materials to help the agricultural community think about how to develop biomass projects.152 Other • The French Agricultural Research Centre for International Development is studying the energy potential of various agricultural sectors in the region, including Côte d’Ivoire. • The ECOWAS Regional Biomass Energy Program153 carries out studies on energy recovery in the sustainable production of cocoa pods. • The Global Bioenergy Partnership154 brings together bioenergy stakeholders to coordinate and implement targeted international research, development, demonstration, and commercial activities related to production, delivery, conversion, and use of biomass for energy, with a focus on developing countries. The partnership is developing sustainability criteria, as well as indicators and a methodological framework for measuring reductions in greenhouse- gas emissions. • The Food and Agriculture Organization conducted a study on biomass, which includes a mapping of organizations in the industry: Vision Bioénergie Durable 2030 (Projet TCP/IVC/3503) and the Plan d’Action National de la Bioénergie Durable (both available from the Ministry of Environment. The organization includes an overview of the sector on its country page).155 Variable generation: solar and wind G R I D -T I E D World Bank • The World Bank Group Energy Systems Management Assistance Program has experience mapping wind in several African countries. • Standard documents are available from the World Bank Group’s Scaling Solar program (which can also be adapted to wind). Other • Global Wind Atlas.156 • Global Solar Atlas.157 • The Global Wind Energy Council158 is a wind industry trade association, providing a representative global forum for the sector. Its focus is on policy analysis, trends, and outreach to emerging markets. • The International Solar Energy Society159 is a United Nations-accredited nongovernmental organization that brings together industry leaders, scientists, and politicians to create international structures that facilitate cooperation. The society supports its members through actions such as encouraging fundamental and applied research in solar energy. Annexes 67 OFF-GRID IFC • IFC is developing a pay-as-you-go Market Attractiveness Index for companies to consider when evaluating market opportunities. This includes the following criteria: an enabling mobile environment, an enabling government environment, the ability to raise finance, access to finance from local financial institutions, market opportunity, and operational considerations. The index is expected to be developed in 2018. • IFC/the World Bank has recently completed a study160 with cost-benefit analyses and other analyses of African off- grid solar markets. World Bank • Lighting Global’s Quality Assurance Program161 has established Quality Standards, a product-testing process with test labs and other resources. This program was previously administered by Lighting Africa and ECOWAS. Other • There is a framework for testing product component families162 to address the challenges of re-certifying solar kits after minor changes. This framework allows developers to certify a set of interchangeable components sold on a component-level basis or as mix-and-match kits. • The Centre for Renewable Energy and Energy Efficiency has created a Regional Certification Scheme to develop the skills of solar installers in eight ECOWAS countries (not including Côte d’Ivoire). This will be delivered through 21 pre-selected training institutions. • ANARÉ announced a decree (2016-787) on October 12, 2016,163 that relates to the conditions and modalities of solar home system distribution activities. • The Solar Multi-functional Platforms Programme for the Fight against Poverty (PTFM) in Burkina Faso could provide a replicable model. G R I D , M I N I - G R I D , A N D D I S T R I B U T E D G E N E R AT I O N IFC • IFC’s recent report on the operational and financial performance of mini-grid164 distributed energy services companies. Other • The Power Africa Transaction and Reforms Program is drafting Best Practices of Rural Electrification Concessions in Africa—including criteria for choosing asset-based concessions (defined by the generation and distribution system, and generally limited to a village or a trading center) versus geographical concessions (defined as a set area and top- down from the government). • The U.S. National Renewable Energy Laboratory has conducted these types of studies. 68 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 FINANCE AND POLICY IFC • IFC has a Global Toolbox showing instruments available from multilateral development banks to support private investment in Africa, including a number of funds supporting clean energy such as the AfDB’s Sustainable Energy Fund for Africa and the European Investment Bank’s Global Energy Efficiency and Renewable Energy Fund.165 World Bank • World Bank 2016 Joint Report on Multilateral Development Banks’ Climate Finance.166 Other • The EU Energy Initiative Partnership Dialogue Facility and Africa-EU Energy Partnership have produced the report Mapping of Energy Initiatives and Programs in Africa (report and high-level initiatives).167 • Project preparation facilities support governments, investors, and developers of power projects by helping to expedite the technical, financial, legal, and regulatory processes involved in energy deals:168 ŊŊ The Power Africa Toolbox169 offers transaction assistance and information on finance, policy or regulatory reform, capacity building, and legal assistance—including those in Côte d’Ivoire.170 Power Africa’s Project Preparation Facilities Toolbox171 shows 13 early-stage project preparation facilities operating in Sub-Saharan Africa’s energy sector—most of the facilities include Côte d’Ivoire as a target country. Power Africa has a map of African energy projects,172 including both fossil and renewable energy sources. ŊŊ NDC Partnership Funding and Initiatives Navigator.173 ŊŊ The landscape of financing can be shown graphically in a financial-flow structure, showing needs and available funding.174 • The Centre for Renewable Energy and Energy Efficiency has developed an Investment Prospectus175 for investors. It outlines energy investments in the country (including government and donor programs) and detailed individual descriptions of pipeline projects.176 The center is considering developing business-to-business meetings in the next year. • Sustainable Energy for All completed a rapid assessment gap analysis for Côte d’Ivoire in 2012; if this could be updated it would provide a strong complement to the investment prospectus.177 • The Commercial Law Development Program and Power Africa have developed handbooks for Understanding Power Project Financing,178 Understanding Power Purchase Agreements,179 and Understanding Power Project Procurement,180 focused on investors in Africa. • Côte d’Ivoire’s Electricity Code.181 • Similar legislation has recently been passed in other countries, including Nigeria and Morocco. Lessons should also be drawn to identify best practices regarding feed-in tariffs in Europe. • Details on existing investment incentives and the electricity code and eight associated decrees (and ordinances) are available from the Investment Promotion Centre in Côte d’Ivoire and ANARÉ websites, respectively. • The International Renewable Energy Agency promotes renewable energy by facilitating access to information, including technical, economic, and renewable resource potential data. The agency also shares experiences on best practices and lessons learned regarding policy frameworks, capacity-building projects, and available finance mechanisms. Annexes 69 Project Portfolio Although Côte d’Ivoire’s renewable energy experience has been primarily in large hydro generation, several projects are under development. Some projects are in the stage of pre-feasibility and feasibility studies, and others are in the funding stage. During the 2012 national energy seminar, the Ministry of Petroleum, Energy and Renewable Energy Development identified the following projects moving forward: • Use of municipal waste and agricultural residues: ŊŊ The SITRADE project related to the production of electricity from solid waste in the District of Abidjan: 8.3 billion CFA, of which 1.3 billion CFA will come from the state. ŊŊ Energy production from waste treatment discharged from Anyama: 263 billion CFA, which private parties will finance. • Producing electricity from the sun and wind: ŊŊ Electrification of rural sites using a solar PV system: 7.15 billion CFA, of which 1.8 million CFA will be financed by the state. ŊŊ PCCI 01 solar plant (PV plant): 95 billion CFA to be privately funded. ŊŊ Promotion of renewable energy for rural communities (promotion of renewable energy for decentralized electrification in view of the creation of activities that generate revenue in rural zones): 1.63 billion CFA, of which 400 million CFA is from the state. ŊŊ Pilot public-lighting project by a PV system: 2 billion CFA from the state. ŊŊ 6 MW wind project: 4 billion CFA, 1 billion CFA of which is from the state. ŊŊ Cogeneration: 7.5 billion CFA, 2.1 billion CFA of which is from the state. • Developing small hydroelectric plants: ŊŊ Hydroelectric plant of Drou: 16 billion CFA, 600 million CFA of which is from the state. ŊŊ 300 kW hydroelectric plant on the Agnéby river: 800 million CFA, 320 million CFA of which is from the state. ŊŊ Hydroelectric planning of Aboisso-Bia: 8.6 billion CFA, to be financed by private parties. Laws and Regulation for Clean Energy In 1985, law 85-583 established the legal framework for the promotion of clean energy. This law organized the production, transmission, and distribution of electricity up to March 2014. It liberalized electricity production and promoted the installation of several IPPs. However, the 1985 law did not include a clear provision to encourage investment in renewable energy. The legislation did not consider rural electrification and other aspects related to security and the environment, nor did it address the sector’s regulation. Furthermore, the law did not provide any punitive measures to address electricity fraud, which was a major problem until recently. In 1990, decree 90-1390 established a public-private partnership with CI-Energies. As a result, CI-Energies became the concessionaire for the national electricity public service and was charged with the production, transmission, import, export, and distribution of electricity. In 2005, the government renewed this concession for 15 years. 70 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 This decree includes several important limits: • The concession contract does not set any clear performance objectives for the concessionaire, which rents state- owned assets while ensuring a fixed remuneration. • The state carries the commercial risk and responsibility for investments in this type of contract. • The concessionaire carries limited responsibility for maintenance and renewal operations, which means it can delay maintenance to the point of renovation if desired. As a result, production equipment and infrastructure are functioning below their capacity. • The grid is constantly overloaded because of obsolescent operations, transmission, and distribution lines. • The state subsidizes the electricity price by adopting social prices. • The management framework of this contract does not prioritize economic efficiency. A new electricity code was enacted in 2014, which further liberalized production. According to this code, private operators may enter different segments of the electricity sector, including transmission, distribution, commercialization, import, and export. The 2014 code has the following objectives:182 • Ensure energy independence and a secure electricity supply. • Develop new and renewable energy. • Promote access to electricity for all, especially in rural areas. • Encourage energy efficiency. • Create investor-friendly economic conditions. • Protect the rights of consumers and operators. • Encourage competition. The new code contains several innovations. It clearly establishes different legal systems for accreditation, agreement, authorization, declaration, and release. It also reduces monopoly, with the state now acting as a system operator and perhaps a market operator. As a result, the code acknowledges the principle of opening most segments of the electricity sector up to competition. Nonetheless, the government and new entrants will agree upfront on conditions regarding electricity production, transmission, distribution, import, export, and marketing. The parties will also agree on an authorization or prior declaration for producers who reach a capacity limit. The law grants third-party access to grids and raises the possibility that eligible clients may choose their supplier. It also establishes general price-setting principles for the electricity sector, namely: • Financial sustainability in and development of the electricity sector. • Equity and non-discrimination for consumers. • Proper accounting for costs, anticipated profits, and charges resulting from the obligations of public service. • Financial sustainability and profitability for the operator. Finally, the law promotes the development of new and renewable energy projects by introducing special fiscal and customs incentives for operators. In addition, it includes measures to control fraud and other crimes in the electricity sector. Annexes 71 Endnotes 1 International Finance Corporation (IFC). (2016). Climate Investment Opportunities in 29 Ibid, p.82; and authors Emerging Markets: An IFC Analysis. Accessible at: https://www.ifc.org/wps/wcm/ 30 Ibid. connect/news_ext_content/ifc_external_corporate_site/news+and+events/ news/new+ifc+report+points+to+$23+trillion+of+climate-smart+investment+oppo 31 World Bank. (2018d). Global Wind Atlas. Accessible at: https://globalwindatlas. rtunities+in+emerging+markets+by+2030 info/area/C%C3%B4te%20d'Ivoire; and Global Solar Atlas, Accessible at: http:// globalsolaratlas.info/ 2 Republic of Côte d'Ivoire. (2016). Contributions Prevues Determinees Au Niveau National De La Côte d'Ivoire. Accessible at: http://www4.unfccc.int/ndcregistry/ 32 Republic of Côte d'Ivoire. (2016). Contributions Prevues Determinees Au Niveau PublishedDocuments/C%C3%B4te%20d%27Ivoire%20First/INDC_CI_22092015.pdf National De La Côte d'Ivoire. Accessible at: http://www4.unfccc.int/ndcregistry/ PublishedDocuments/C%C3%B4te%20d%27Ivoire%20First/INDC_CI_22092015.pdf 3 Republic of Côte d'Ivoire. (2016). National Development Plan 2016-2020. Accessible at: https://www.cabri-sbo.org/en/documents/national-development- 33 ECREEE. (2016). National Action Plan for Renewable Energy in Côte d'Ivoire. Accessible plan-2016-2020 at: http://www.se4all.ecreee.org/sites/default/files/plan_dactions_national_des_ energies_renouvelables_paner_-_cote_divoire.pdf, p.13, 18 4 International Development Association (IDA). (2017). International Development Association Project Appraisal Document on a Proposed Scale Up Facility Credit in the 34 Note: Capacity factors are estimates for 2030 Amount of Eur 302.3 Million (US$325 Million Equivalent) to the Republic of Côte d'Ivoire 35 CI-Energies Reference Document, 2018 for an Electricity Transmission and Access Project. Accessible at: http://documents. 36 Calculations by authors of Roadmap worldbank.org/curated/en/450031491098454445/pdf/COTE-DIVOIRE- 37 ECREEE, 2016, p.13, 18 PAD-03132017.pdf 38 Total installed electricity generation capacity includes all hydro, gas, HVO-oil, 5 Republic of Côte d'Ivoire Ministry of Mines, Petroleum and Energy. (2012). Seminaire biomass, and solar PV installations National Sur L’energie 2012. Accessible at: http://www.anare.ci/assets/files/pdf/ documents/atel-semin/4MMPE-SNE2012-Rapport-Com3-Electrification-Rurale. 39 CI-Energies Reference Document, 2018 pdf 40 CI-Energies Reference Document, 2018, and authors 6 Republic of Côte d’Ivoire. (2014). Electricity Code. Accessible at: www.anare.ci/index. 41 Autorité Nationale de Régulation du secteur de l’Electricité (ANARÉ). (2015). php?id=13 Rapport d’Activités 2015. 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Accessible PublishedDocuments/C%C3%B4te%20d%27Ivoire%20First/INDC_CI_22092015.pdf at: http://www.iea.org/publications/freepublications/publication/ 44 Republic of Côte d'Ivoire Official Portal. (2013). Construction D’un Barrage TechnologyRoadmapAguidetodevelopmentandimplementation.pdf De 275 Mw A Soubre: Eximbank De Chine Accorde Un Pret De 321 Milliards Fcfa 10 World Bank. (2018b). Understanding the State of the Ivorian Economy in Five Charts and A La Côte d'Ivoire. Accessible at: http://www.gouv.ci/_actualite-article. Five Minutes. Accessible at: http://www.worldbank.org/en/country/cotedivoire/ php?d=1&recordID=3122&p=229 publication/cote-divoire-economic-update-at-the-paradises-doors 45 CI-Energies Reference Document, 2018, p.82 11 U.S. Department of Commerce, International Trade Administration. (2016). 46 Ibid. Côte d’Ivoire—Agricultural Sectors. Accessible at: https://www.export.gov/ 47 Ibid. article?id=Cote-d-Ivoire-Agricultural-Sectors 48 Ibid. 12 Ibid. 49 International Renewable Energy Agency (IRENA). (2012). Renewable Energy 13 World Bank. (2018c). Data – Côte d'Ivoire. Accessible at https://data.worldbank.org/ Technologies: Cost Analysis Series Volume 1: Power Sector Issue 3/5: Hydropower. country/cote-divoire Accessible at: https://www.irena.org/documentdownloads/publications/re_ 14 IFC & Africa CEO Forum. (2018). Shaping the Future of Africa: Markets and technologies_cost_analysis-hydropower.pdf, p.10 Opportunities for Private Investors. Accessible at https://www.ifc.org/wps/wcm/ 50 Workshop 1 proceedings. (February/March 2018). Abidjan. connect/5c9e9f2f-779a-4ab7-beb6-e3aa65b00a85/Africa+CEO+Forum+Report_ FIN3_Web-lores.pdf?MOD=AJPERES, p.14 51 Ibid. 15 CI-Energies Reference Document. (2018). Developpement du Secteur de L’electricite de 52 Proceedings of PTF Donor Meeting. (April 2018). Abdijan la Côte d’Ivoire. 53 Republic of Côte d'Ivoire, 2016 16 Ibid. 54 CI-Energies Reference Document, 2018, p.76 17 Authors 55 Oxford Business Group. 2018. Côte d'Ivoire's strong solar and biomass potential help 18 Republic of Côte d'Ivoire, Ministère des Mines, du Pétrole et de l’Energie. (2014). transform energy sector. Accessible at: https://oxfordbusinessgroup.com/analysis/ Plan Stratégique de Développement 2011–2030 de la République de Côte d’Ivoire. viable-alternatives-country%E2%80%99s-strong-potential-solar-and-biomass- Accessible at http://ci.chm-cbd.net/implementation/loi-code-decrets-et-textes- energy-helping-transform-sector sur-lenvironnement/plan-stretegiques-mines.pdf 56 Koua, Blaise K., Paul Magloire E.Koffi, Prosper Gbaha, and Siaka Touré. (2015). 19 International Development Association (IDA). (2017). International Development Present status and overview of potential of renewable energy in Côte d'Ivoire. 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Accessible at: https://www. rtunities+in+emerging+markets+by+2030 ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/ 26 Revised estimates based on updated data received after publication of 2016 report. agribusiness/agri_mhp_project+story 27 CI-Energies Reference Document, 2018, p.76 66 Mironovski Hliboproduct (MHP). (2018). MHP’s Objective Is Full Energy Security 28 Ibid, p.82, 31. Combined with Pure Organic Farming Methods. Accessible at: https://www.mhp.com. ua/en/operations/biogas 72 Unlocking Private Investment: A Roadmap to Achieve Côte d'Ivoire's 42 Percent Renewable Energy Target by 2030 67 Renewables Now. (2014). Ukraine’s Astarta Launches Biogas Facility at Hlobyne 103 Ibid. Sugar Plant. Accessible at: https://renewablesnow.com/news/ukraines-astarta- 104 World Bank. (2018e). Result Briefs: Argentina Taps Its Renewable Energy Potential. launches-biogas-facility-at-hlobyne-sugar-plant-444544/ Accessible at: http://www.worldbank.org/en/results/2018/02/15/argentina-taps- 68 IFC. (2015). IFC Invests in Astarta to Boost Food Production, Create Jobs in Ukraine. its-renewable-energy-potential Accessible at: https://ifcext.ifc.org/ifcext%5Cpressroom%5Cifcpressroom. 105 Ibid. nsf%5C0%5CA7A26BB1333BD81385257ED70034BC98 106 Petrova, Veselina. (2018). Engie, Meridiam Secure 60 MW of Projects in Senegal Solar 69 Whittaker, Carly and Ian Shield. (2018). Chapter 7 – Biomass Harvesting, Processing, Tender. Renewables Now. Accessible at: https://renewablesnow.com/news/engie- Storage, and Transport. Greenhouse Gas Balances of Bioenergy Systems, Pages meridiam-secure-60-mw-of-projects-in-senegal-solar-tender-607966/ 97–106. Accessible at: https://www.sciencedirect.com/science/article/pii/ B9780081010365000070 107 ESI Africa. (April 11, 2018). Senegal: Scaling Solar Programme Sets New Tender Benchmark. Accessible at: https://www.esi-africa.com/senegal-scaling-solar- 70 Ibid. tender-scraps-last-record/ 71 ClimateScope, 2017 108 Workshop proceedings, February/March 2018 72 IFC. Forthcoming study 109 Lighting Africa. (2017). Regional Off-Grid Electrification Project (ROGEP) Overview. 73 Workshop proceedings, December 2017 and February/March 2018 Accessible at: https://www.lightingafrica.org/publication/regional-off-grid- 74 Kakorin, A., L. Laurisch, and G. Papaefthymiou. (2014). FLOW Dynamic Power electrification-project-rogep-overview/ Management WP2.2: Market Interaction (ECOFYS). Accessible at: https://www. 110 Lighting Global is a platform to support sustainable growth of the off-grid solar ecofys.com/files/files/ecofys-2015-flow-dynamic-grid-wp2-2-market-interaction. market. 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