The Kenya Off-Grid Solar Access Project (K-OSAP)

The Kenya Off-Grid Solar Access Project (K-OSAP) is a flagship Project of the Ministry of Energy, financed by the World Bank and jointly implemented by the Ministry of Energy (MoE), Kenya Power and Lighting Company (KPLC) and Rural Electrification and Renewable Energy Corporation (REREC).

It aims to increase access to modern energy services in 14 underserved Counties of West Pokot, Turkana, Marsabit, Samburu, Isiolo, Mandera, Wajir, Garrisa, Tana River, Lamu, Kilifi, Kwale, Taita Taveta and Narok.

When completed the project targets 277,000 households (approximately 1.3 million people from the 14 Counties and 1,100 public facilities community facilities i.e. schools, health facilities, administrative offices and 380 boreholes that have remained un-electrified. The Project also expects to facilitate the provision of 150,000 clean cooking stoves in West Pokot, Turkana, Marsabit, Samburu and Isiolo.

The project is part of the Ministry’s to objective to achieve universal electrification by 2022 and economic growth under the Vision 2030. Though national electrification has risen from 23% in 2009, to 70% today, much of these have been achieved alongside the central corridor of the country –Mombasa – Nairobi- Lake Victoria, leaving out North East and Northern Kenya un-electrified.

Duration
This is a six years project that started on July 2017 and is expected to end in June 2024.

Funding Level
$150 Million

MAP

Tower

A Solar Water Pump in Magodzoni Matuga Sub-County, Kwale County. KOSAP intends to install solar power in anumber of community facilities in the 14 Counties. (Picture: Kwale County Government)

Section B

Project Focus Areas

a) Mini-grids

As the target counties are not served by the national grid, mini-grids will be constructed to be the main source of energy. A total of 120 mini-grids will be constructed throughout the I4 Counties. The mini-grids will then be used to provide electricity to community facilities, enterprises and households.

Mini-grids are mostly suited for rural towns/larger villages that (a) are relatively remote and therefore unlikely to be served by the national grid, (b) are relatively densely populated, and (c) have expected loads that justify the mini-grid investments as opposed to deploying individual household systems. This usually requires a certain size (for example, 100 households plus) and sufficient existing or potential business and institutional loads.

Garissa County Mini-grid

Mini Grids in Garissa County constructed by the national government. KOSAP will construct 120 Mini grids in the 14 Counties. (Picture: Nyaga Ireri MOE)

The sites for the construction involved lengthy consultations with the County Governments in the 14 Regions. Counties were requested to provide possible sites for the construction of the min grid based on the following criteria.

The final sites will be identified after feasibility study is undertaken by the project.

Depending on the number of users to be supplied and the service level for each type of use, the mini-grid will combine solar PV, battery storage and thermal units running on diesel.

Baragoi in Samburu County one of the towns that will be served by a minigrid

Baragoi in Samburu County one of the towns that will be served by a minigrid (Picture: Samburu County Governmnet)

Kenya Power and Lighting Company (KPLC) is responsible for implementing this section and the mini-grids will be developed under a public-private partnership (PPP). Under this arrangement a Private Service Provider (PSP) will be responsible for construction and partial financing of the generation systems and distribution network for each mini-grid.

The PSP will sign two long-term contracts with KPLC. 7-10 years PPA for the operation and maintenance (O&M) and for recovery of the privately finance part of the investment. A 7-10 years service contract for O&M of the distribution network will be signed with the successful contractor. After the recovery of the private investments, all assets (generation and operation) will be in GOK ownership.

Customers supplied through min-grids will be KPLC customers and will pay the same tariff for each category charged.

b) Solar Systems for Households and Community Facilities

The vast majority of off-grid households in the 14 underserved counties is dispersed and requires individual system solutions (Solar Home Systems- SHS).

The project will leverage on the thriving SHS industry and provide incentives to companies currently operating in the more densely populated areas of Kenya, to expand to underserved counties. These services provided through portable SHS, are well suited to some of the population in the underserved counties as the households do not always live in permanent structures.

Affordability for the SHS is ensured by allowing the households to pay for the systems over time. Preliminary World Bank Multi- tier Framework (MTF) surveys shows over half a million households can afford a Tier I Level; l SHS.

Tier 1

SunKing home

Tier 2

Mobisol

In total, 250,000 households that consist of 1.1 million people will be reached through SHS.

Stand Alone Systems for Public Facilities

A secondary school in Samburu County

A secondary school in Samburu County that is proposed will be served by a standalone system under KOSAP( Picture: Samburu County Government)

Electrification of community facilities is a strategic priority for the Government of Kenya (GoK). GoK has undertaken a recent large scale program to provide solar electrification to primary schools as part of the Digital Learning Initiative.

Under this, community facilities developed by the Ministry of Health, Ministry of Education and the Ministry of Interior will be supplied with power for optimum performance.

To achieve this, a private sector contractor will be procured by KPLC for each service territory to supply, install and maintain stand-alone solar systems in community facilities.

While past approaches focused on supply and installation with limited O&M consideration, the emphasis under this component will move towards a performance based, long-term service delivery. The project will also leverage on technological advancements to reduce maintenance costs. Installations will be made at 207 Secondary Schools; 784 Level 2 & 3 Health Clinics; and 106 ACC Offices.

C) Clean Cooking Stoves

The target in this is to support transition from low-efficiency baseline stoves to cleaner, high efficiency improved stoves. Funded to the tune of $6million, the clean cooking stoves will first be provided to five counties – West Pokot, Turkana, Isiolo, Samburu and Marsabit.

Women in Samburu County using traditional cooking methods

Women in Samburu County using traditional cooking methods that will be replaced with efficient cook stoves under the KOSAP Project.(Picture: Samburu County Goverrnent)

A Stove–Market Testing Program will be undertaken in the urban areas and densely settled parts of Turkana County. Stoves to be included in the project will be determined following a call for Expression of Interest from stove manufacturers. To be eligible, a woodstove will have to prove that its efficiency test as a Tier 2 Stove (roughly 30 % efficient) and a charcoal stove will have to prove that its efficiency tests as Tier 3 stove (40% efficient).

After the tests are done, both consumers and suppliers – retailers, wholesalers and distributors in the urban areas of Turkana will be exposed to the stoves.

Financial support will be provided to selected distributors via a package of via a package of result – based incentives to enable them market their stoves locally within the target counties, to increase their inventories of the selected higher quality stoves, to purchase and transport them to target communities in numbers and unequally sell them to the communities.

c) Solar Water Pumps for Community Facilities

About 380 boreholes associated with community facilities in the 14 Counties will benefit from the installation of solar powered water pumps. This will increase sustainable access to water supply by equipping new boreholes and retrofitting existing diesel –powered boreholes.

The Rural Electrification Agency (REA) which is in charge of implementing this aspect of the project will hire private sector contactor to supply, install and maintain stand alone solar sytems for the community facilities. This will enhance the sustainability of these facilities as operational cost associated with diesel based systems will be avoided.

The payment for maintenance services will be recovered on monthly basis or at frequency to be determined by the relevant stakeholder – Counties, REA and community facilities- from community facilities hosting these boreholes.

E)Capacity Building

The project recognises that the need to build capacity for the effective implementation of the project. Towards this, the project has set aside resources to build the required skills set for the Project Coordination Unit (PCU) in the MoE as well as for the Project Implementation Units KPLC and REA, and (PIUs).

Participants in the Sustainable Energy for Policy Makers Training drew from Marsabit, Isiolo and Narok Counties after graduating at Strathmore University, In November, 2018. (Picture courtesy of Strathmore University)

Some of the areas in which trainings have been undertaken include: Project Development for Power and renewable Energy, International Procurement of Consulting Services; Project Management Monitoring and Control, Management Development Programme for Executive Assistants; Project Management and Implementation among other.

A central plank of trainings under KOSAP is aimed at enhancing the capacity of the targeted county governments. The County government’s role in the energy sector is defined under the Constitution as “county planning and development, including-electricity and gas reticulation and energy regulation.”Given that the County Governments have been in existence for less than six years, there is need to enhance their Capacity in order to undertake this function effectively.

Trainings for the County Government are focused on Energy Management, Renewable Energy and Sustainable Resource Management, Tariff Rates and Cost Recovery Requirements, Environmental and Social Management, among others.

A Training Needs Assessment (TNA) will be undertaken to determine the capacity gaps in the identified institutions and a long-term capacity building plan to be implemented over a period of Six years, developed.

SECTION C

Project Delivery Methods

The project is delivered through 3 major planks.

a. PROJECT MANAGEMENT

The project has a robust governance structure created to ensure smooth implementation.

governance structure

Steering Committee

This is the highest decision making body for the project. Chaired by CS (Energy) and Chair of Energy Committee (Council of Governors), PS (Energy), PS (Health), PS (Education), PS (Interior), PS (Devolution), PS (Water), PS (National Treasury), DG (ERC), MD (KPLC), MD (REA). Attended by the co-chairs of the Technical Working Group.

The team meets twice per year to review progress, provide policy guidance and resolve any high-level challenges facing the project.

Technical Working Group (TWG)

governance structure

Ms. Kulamu Bullo, Co-Chair, TWG and CEC Member, Energy, Marsabit County at the 4th TWG KOSAP Meeting

This is critical decision making organ of the project. The TWG is chaired by Secretary, Renewable Energy, Ministry of Energy and a county government nominee. It includes representatives from the 14 beneficiary counties, KPLC, REA, CoG, FCDC, ERC, Ministries of Health, Education, Interior, Devolution, & Water. It is also attended by County Renewable Energy Officers and other PCU Member. The TWG meets quarterly and is expected to resolve the common challenges arising during implementation.

County Working Group

The County Working Group is the organ mandated to resolve challenges of project implementation at the County level. The Governor in each of the 14 counties acts as the patron of the group. The CWG is expected to keep the Governor of the county updated on the progress of the project. It is chaired by the CECs in charge of Energy and co-chaired by the County Commissioners on behalf of the National Government. The County Renewable Energy Officers (CREOs) act as the Secretary of the group. Other members include County Director Enforcement, County Director of Education, County Director Water, County Director Environment, County Business Manager KPLC and County Supervisor REA.

governance structure

Ms Ebla Hassan, CEC Energy Wajir County and Mr Loyford Kibaara, County Commissioner Wajir addressing members of the KOSAP County Working Group in a past meeting held in November, 2018.

Project Coordination Unit (PCU)

The KOSAP PCU is hosted in the Ministry of Energy and is headed by the Project Coordinator. It consists of various technical officers drawn from the Ministry and specialists in the areas of Procurement, Financial Management, Monitoring and Evaluation, Social Safeguards, Communications, Cook Stoves, and Solar. 14 County Renewable Officers (CREOs) who are based at the county are also part of the PCU.

The PCU is responsible for not only implementing Components 2 and 4 of the proposed project but also the overall coordination of project implementation and oversight, including the following:

KPLC and REA have established respective Project Implementation Units PIUs to manage their specific components. The PCU and PIUs consult and collaborate on a day-to -day basis and also hold monthly meetings.

B. PRIVATE SECTOR

Kenya has a highly developed private sector providing solar home solutions (SHS). However; private solar companies are largely confined to the core market, in densely populated areas and have a negligible footprint in the underserved counties.

The Project recognises that the underserved areas are not a top priority for solar companies given the uncertainty on the geographic and socioeconomic profile of consumers as well as high cost (about four times higher than core market) to reach such areas.

KOSAP will therefore provide incentives to the private sector to create a level playing field between the core market and underserved counties.

The project has created a Results Based and Debt Financing Facilities of about KSh 4.7 Billion (U$47 Million).

i) Results Based Facility

The Results Based Facility will provide incentives worth Ksh 1.20 Billion to be extended to Solar Services Providers (SSPs) over a period of 5 years. This is intended to compensate them for the initial, ongoing incremental, and opportunity costs associated with an expansion of operations in underserved counties. The service providers are expected to provide both portable and installed solar home systems consisting of at least two fixed lights; one portable light, radio operations and phone charging capabilities.

ii) Debt Facility

A further Ksh 3 Billion will be availed as short-term debt to the SSPs to finance costs associated with hardware manufacture and transit to Kenya, until a sale is made. This model is expected to enable the service providers to adopt favourable payment methods that will allow households to pay off the costs of the solar products over a reasonable period of time.

iii) Clean Cooking Stoves Incentives

The Facility will also encourage the uptake of clean cooking stoves to mitigate against the environmental degradation and other health concerns that arise from the use of low-efficiency stoves. This will be initially targeted to beneficiaries in the counties of West Pokot, Turkana, Isiolo, Samburu, and Marsabit.

Under this, the Facility will provide the selected distributors with financial support via a package of incentives worth Ksh 500 Million to enable them to market their stoves locally, to increase their inventories of the selected higher-quality stoves, to purchase and transport them to the target communities in number, and to sell them in the communities.

C. CITIZEN ENGAGEMENT

The project has employed a robust citizen engagement mechanism that ensures that public participation is at the centre of implementation.

At the design stage there were wide consultations not only with various government agencies, development partners, and the private sector but also with beneficiaries.

Thus from the onset the intended beneficiaries were brought on board.

In particular citizen engagement will be achieved through the following mechanisms:

a) Environmental and Social Safeguards

b) Consumer Awareness

Environmental and Social Safeguards

Safeguards are designed to prevent unintended adverse affects of the project on third parties and the environment. Any project should endeavour to benefit community and in the very least “leave them as you found them” and in essence make an effort to do no harm.

A comprehensive environmental and social safeguards evaluation was undertaken by the World Bank during the design stage of the project. Under the evaluation, KOSAP is categorised as medium, with possible effects ranging from medium to moderate. The effects have been identified as site specific, predictable and readily manageable impacts.

The Project has triggered the following Environmental Policies.

a) Operational policy on Environmental Assessments (OP/BP 4.01)

The main potential environmental impacts anticipated for the project are

i) civil works that would be limited to construction of the mini-grids in remote areas

ii) installation of stand-alone systems for households

iii) installation of solar PV for water pumping and

iv) construction of distribution lines to connect new customers and

v) environmental, health, and safety concerns are likely to be associated with recycling and disposal of spent batteries at the end of their useful lives, which is usually 3–5 years after deployment

b) Operational Policy on Natural Habitats (OP/BP 4.04)

This was triggered because project activities are likely to affect the natural habitats through the erection of poles, construction of the mini-grids, and the installation of solar pumping equipment.

c) Indigenous Peoples Policy (OP/BP 4.10)

Known presence of indigenous people/ vulnerable and marginalized groups (VMGs) in the 14 Counties. The first category reprsensted by eight of the project counties- Garissa, Mandera, Isiolo , Marsabit, Wajir, Turkana, Samburu and Narok Counties are overwhelming IP/VMG counties in as far they are inhabited mainly by nomadic pastoralists communities. Tana River, Lamu, Kilifi, Kwale, Taita Taveta and West Pokot counties have minority IPS/VMG living among the more dominate communities in each of the counties.

Social Assessment

Given that there will be some elements of payment to access the project benefits; some of the following concerns were flagged.

a) Affordability of the solar or mini-grids due to high levels of poverty in the areas.

b) Elite capture with potential to influence the actual sites of subprojects away from VMGs for individual interest gain;

c) Gender considerations in the subprojects among the VMGs; and

d) Potential conflict over conflict over communal land and natural resources on the locations of mini-grids.

Safeguard Instruments triggered in relation to this project include:

1) Operational Policy on Involuntary Resettlement (Op/BP 4/12)

Project does not visage major physical or economic displacements of people. Project may however acquire land for the construction and installation of mini-grids that may result in either displacement of people or have impacts on tress or grazing /farming land.

Grievances Redress Mechanism

A detailed Grievance Redress Mechanism (GRM) has been developed as part of the project implementation. The mechanism will be used to deal with any complaints regarding land and labour and will be dealt with at the Sub County, County and at the Ministry level.

CONSUMER ENGAGEMENT

Consumer engagement is vital to the success of the project. The project will support a multiyear program for consumer education and citizen engagement in the target areas (households, public facilities, and water facilities in the underserved counties). Consumers in the area are unlikely to be aware of the new technologies being presented and will benefit from information about the services, explanation about how the services can be accessed, and the opportunity to interact with service providers to share their feedback and concerns.

The citizen engagement and consumer awareness activities will provide beneficiaries with the necessary guidance on how to get the best out of the products in the way they use and maintain them. These activities will also help service providers better understand the needs and concerns of their customers. The citizen engagement program will employ a variety of messaging tools and personal interaction to reach various audiences while ensuring opportunities for two-way dialogue.

The process of developing the Consumer Awareness and Citizen Engagement will involve extensive consultations with County Governments, Opinion leaders including Religious Leaders and Members of County Assemblies as well as potential beneficiaries at household, public facilities and water facilities.

SECTION D

Project Location

The project is located in the Northern and North Eastern parts of Kenya which have been classified by the Commission on Revenue Allocation (CRA) as marginalised. CRA recognises marginalisation is a consequence of a skewed process of the distribution of scarce resources; it has been interpreted as a process of social exclusion from the dominant socio-economic, cultural and political structure.

Counties

Constitution of Kenya 2010 defines marginalised communities as one or more of the following:

a) A community that, because of its relatively small population or for any other reason, hasbeen unable to fully participate in the integrated social and economic life of Kenya as a whole.

b) Traditional community that out of a need or desire to preserve its unique culture and identity from assimilation has remained outside the integrated social and economic life of Kenya as a whole.

c) An indigenous community that has retained and maintained a traditional lifestyle and livelihood based on a hunter or gatherer economy; or pastoral persons and communities, whether they are: (i.) nomadic or (ii.) a settled community that, because of its relative geographic isolation, has experienced only marginal participation in the integrated social and economic life of Kenya as a whole.

According to the CRA Survey on Marginalised Areas/Counties in Kenya, Working Paper No 2012/03, there are pockets of marginalisation in almost all the 47 Counties of Kenya, with high prevalence in arid and se-mi arid regions.

According to the CRA, the level of education, infrastructure, and poverty index, food insecurity, health facilities, access to water and historical injustices should be used as criteria to identify the most marginalised areas.

In this regard, the following 14 Counties were recognised as marginalised. These are: West Pokot, Turkana, Marsabit, Samburu, Isiolo, Mandera, Wajir, Garrisa, Tana River, Lamu, Kilifi, Kwale, Taita Taveta and Narok.

SECTION E

Project Beneficiaries

The project targets approximately 277,000 households, close to 1.3 million people in the 14 Counties. 1,097 community facilities including schools, health centres and administrative offices will be provided with electricity. About 380 boreholes will be fitted with solar pumps to not only provide safe drinking water for the communities but also to be used in economic activities.

150,000 efficient cook stoves will be sold and installed in the target counties.

Why does Kenya need this project?

The Government of Kenya vision 2030 aims to transform Kenya into a newly industrializing, middle income country providing a high quality of life to all citizens. Promoting equal opportunities across the entire Kenya terrority is key to realizing this vision. Energy is identified as one of the key sectors that form the foundation for socio political and economic growth. Access to competitively priced, reliable, quality, safe, and sustainable energy is essential for the achievement of the vision.

Why is KOSAP supporting the private sector?

Kenya has been a hotbed of innovation and growth for the off-grid solar industry over the past decade. Recent trends demonstrate a growing participation of the private sector. These innovations have tackled the consumer affordability gap. With the support of the private sector, the rollout of business models in the KOSAP Service Territories will be an important means to ensure affordability for a broader economic spectrum.

Implementation Period

The implementation period for the project starts November 23, 2018, and ends on June 30th, 2023.

Contacts

Contact us on:

Ministry of Energy
Nyayo House 21st Floor
P. O Box 30582-00100
Nairobi

Tel:20-310112 ext 22205
Email: kosap@energy.go.ke