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Business Plan ECREEEBusiness PlanECOWAS Centre for Renewable Energyand Energy Efficiency(ECREEE)First Operational Phase: 2011 to 2016ECREEE is supported by[3 ]

ECREEE Business PlanImprintThe ECREEE Business Plan 2011–2016Final version, Praia, Cape VerdePresented to the Executive Board of ECREEE in April 2012Written byECREEE: Hyacinth Elayo, Mahama Kappiah, Martin Lugmayr, David VilarNexant Inc.: Edward Hoyt, Lauren WygonskiDesign GraphicEneias Rodrigues - CS DesignPublished byECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE)Achada Santo Antonio, 2nd floor, Electra BuildingC.P. 288, Praia, Cape VerdeE-Mail: [email protected]: 238 2604630, 238 2624608http://www.ecreee.org[4]

Business Plan ECREEEMessage from the ChairmanIn the context of the Year of Sustainable Energy for All, it gives me great pleasure and pride to present the Business Plan forthe Economic Community for West African States (ECOWAS) Regional Centre for Renewable Energy and Energy Efficiency(ECREEE) for the years 2011 to 2016. The document has undergone extensive review by ECREEE’s partners, its fifteenNational Focal Institutions (NFIs) and the ECREEE Technical Committee, prior to its formal presentation and approval by theExecutive Board of the Centre in 2012.The Business Plan provides a powerful strategic long-term framework which allows continued monitoring of the achievementsof the Centre. By mapping out a clear vision, the plan serves to guide the Centre towards a position of relevance and sustainability in the coming years. The strategy includes the definition of objectives and milestones, performance indicators, activities,and human and financial resources requirements. It also highlights the peculiarities and specific challenges facing the regionwith respect to energy, while presenting the opportunities and barriers for renewable energy and energy efficiency deploymentas well as a country-by-country review of the needs, opportunities and key issues within the sector.In 2009, ECOWAS, in cooperation with the governments of Austria and Spain, and the United Nations Industrial DevelopmentOrganization (UNIDO) established ECREEE as a unique regional renewable energy and energy efficiency promotion agency.The Center represents a compelling regional policy response to the rising energy security concerns, continued lack of accessto energy services as well as the need for climate change mitigation. The Centre creates an important link between international climate, energy and development cooperation policy. It has the potential to become a key entry point for the mobilizationof private sector and international funding to address the energy challenges facing the region and mitigate climate changeeffects.Over the coming years, we will be mobilizing our partners and stakeholders in the region towards achieving ECOWAS energyobjectives such as the ECOWAS/UEMOA White Paper on access to energy services for populations in rural and peri-urbanareas. The policy foresees that at least 20% of new investments in electricity generation should originate from locally availablerenewable resources. The Centre will also contribute to the achievement of the UN Millennium Development Goals (MDGs),the UN goal of universal access to clean, affordable energy by 2030 and the international agreements to reduce greenhousegas (GHG) emissions to keep the global average temperature rise below two degrees Celsius. The UN goals aim at achievingthree interlinked targets by 2030: ensuring universal access to modern, affordable and reliable energy services; doubling therate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix.We are therefore pleased to note that ECREEE has already started to execute key activities to mitigate the existing barriersfor the creation of RE&EE markets in West Africa. At the end of the six year period, an independent external evaluation will becarried out to assess the progress in the region and by ECREEE towards achievements of the objectives of the Centre basedon the set performance indicators in the Business Plan. These include the number of additional people/institutions with accessto modern energy services through REⅇ the number of jobs created directly or indirectly during construction and operation of RE&EE projects; the volume of income and savings generated by RE&EE projects; the volume of GHG tons reducedthroughout the life-time of installed RE&EE projects; the volume of reduction of fuel wood use for cooking through RE&EEprojects, the rate of electricity access in rural areas in ECOWAS; and the capacity of MW installed in the region.The Business Plan has been elaborated by ECREEE, with the technical assistance of Nexant Inc., and with funding from theUnited States Agency for International development (USAID). We are truly excited about this long-term planning framework.Special thanks are due to USAID as well as our core partners: the Governments of Austria, Spain and the United Nations Industrial Development Organization (UNIDO). We count on your continued support and collaboration as we strive to accelerateaccess to modern energy services through the proliferation of RE&EE technologies across the West African region.Ebrima NjieECOWAS Commissioner for Infrastructure & Chairman of the ECREEE Board[5 ]

ECREEE Business PlanHighlights of the ECREEE Business Plan (2011–2016)ECREEE Governance Structure: ECREEE is a specialized ECOWAS agency with a public mandate to promoterenewable energy and energy efficiency markets. It acts as an independent body but within the legal, administrativeand financial framework of ECOWAS rules and regulations. The ECREEE Secretariat is based in Praia, Cape Verde,and has established a network of NFIs among all ECOWAS Member States. The Technical Committee (TC) and theExecutive Board (EB) are the highest decision-making bodies of the Centre. The official working languages of theCentre are English, French and Portuguese.Financial Vision: ECREEE is primarily public funded through grants from the ECOWAS Commission and officialdevelopment aid from donors. By 2020 the Centre will decrease the share of donor grants from 75% to 50% of itsannual budget. The share of ECOWAS and voluntary member state contributions should increase from 15% in 2012 to40% of the annual budget in 2020. Moreover, the Centre aims at mobilizing around 10% of its annual budget throughcommercial services and investment shares (fee-for-service).Overall Objective of ECREEE: To contribute to the sustainable economic, social and environmental development ofWest Africa by improving access to modern, reliable and affordable energy services, energy security and reduction ofenergy related externalities (GHG, local pollution).Specific Objective of ECREEE: To create favorable framework conditions for regional RE&EE markets by supportingactivities directed to mitigate existing technology, financial, economic, business, legal, policy, institutional, knowledgeand capacity related barriers.ECREEE Value Chain: Under the Business Plan, the Centre will execute numerous activities within the scope offive interrelated result areas. They include policy development, capacity building, knowledge management, awarenessraising as well as business and investment promotion. The Business Plan sets measureable performance indicatorsand targets for each result area (see below).RESULT AREA 1: Create an effective regional RE&EE promotion agency and ensure financial sustainabilityPerformance Indicators by 2016 Achieve 80% expenditure rate and implement 80% of the planned activities in the annual work plans Mobilize 25% of the annual budget of ECREEE from ECOWAS sources and 5% from commercial fee-forservice activities in 2016 Mobilize 13 million funding through direct funding agreements by 2016 Sign six funding agreements with international donors Sign five funding agreements with ECOWAS member states and/or ECOWAS Commission Sign 40 cooperation agreements with local and international technical RE&EE partners Review and appraise 300 RE&EE project proposals in accordance with the Centre’s quality and appraisalframework Prepare, manage and conclude 120 procurements Sign and manage 100 contracts Prepare and submit at least 18 project/program proposals to international financiers (e.g. EC, GEF) andmobilize 20 million indirect co-funding through such proposals. Spend a maximum of 20% of its budget for administrative purposes (e.g. salaries, running costs) 50% female employeesRESULT AREA 2: Create and implement tailored policy, legal and regulatory frameworksPerformance Indicators by 2016 Develop and adopt one regional renewable energy policy and one energy efficiency policy Develop and pass RE laws in all ECOWAS Members States Ensure binding of national minimum renewable energy targets (MRET) adopted in all ECOWAS Member States Achieve 25% MRET across the Member States Develop five RE&EE support policies/strategies devoted to rural and peri-urban electrification/energy Achieve a 50% rate of adoption of national EE standards and labelling standards.[6]

Business Plan ECREEERESULT AREA 3: Capacities strengthened and appliedPerformance Indicators by 2016 Execute 80% of the Regional Capacity Building Program based on the Capacity Needs Assessment Train directly 500 stakeholders across identified target groups Conduct 15 training workshops Train 30 local institutions by applying a ‘train the trainers’ approach 60 national follow-up trainings are executed by local institutions (trained by ECREEE) 1.000 participants participated in the trainings of local institutions (trained by ECREEE) Achieve at least 70% positive feedback of participants in ECREEE trainings (e.g. evaluation forms) Conduct three workshops/meetings devoted to sustainable energy in rural/peri-urban areas At least 20% of the trained experts are femaleRESULT AREA 4: Strengthen knowledge management, awareness raising, networks and advocacyPerformance Indicators by 2016Awareness raising, advocacy and networks Attract 21,000 visits per year to the ECREEE website Draw 50% of visits from the ECOWAS region/Africa Conduct two surveys per year among stakeholders and general public Attain 50,000 contacts in the ECREEE database Send 12 alerts per year to all database contacts Record 200 friends on Facebook Record 200 twitter followers Conduct one awareness campaign per year (radio ads/interviews/mentions) Publish ten press releases per year Disseminate four newsletters per year.Knowledge management Establish the ECOWAS Observatory for Renewable Energy and Energy Efficiency (EORE) and catalogue 500documents in the database Record 20,000 downloads from the EORE Conduct Resource Assessments (solar and wind) contrasted with field measurements (max 10% of data error)of 20% of regional territory Conduct Resource Assessment (flow and height) of 50% of the rivers in the region Conduct bioenergy crops assessment of 100% of territory in the region Organize 6 regional RE&EE conferences with more than 720 participants Give 90 presentations at major conferences Prepare five policy statements/briefs for regional and international policy and decision-making processes Complete two flagship ECOWAS RE&EE publicationsRESULT AREA 5: Business and investment promotionPerformance Indicators by 2016 Organize five forums of the ECOWAS Renewable Energy Investment and Business Initiative (ERIBI) and fivemeetings of the Business Advisory Council (BAC) Mobilize 500 million of investment for the project pipeline of the RIBI Undertake 20 pre-investment studies leading to actual investments Develop and implement ten RE&EE demonstration projects Approve and implement 90 rural and peri-urban ECOWAS Renewable Energy Facility (EREF) projects Create or support ten local energy service companies (ESCOs) Complete 15 Electrical Grid Dynamic Analysis (EGDA) studies to evaluate the RES penetration potential in theregion Mobilize a minimum of 30 million of co-funding for investment projects directly supported/funded and/ordeveloped by ECREEE.[7 ]

ECREEE Business PlanContentsMessage from the Chairman.3Highlights of the ECREEE Business Plan (2011–2016).4Figures.7Tables.7List of Acronyms.81. BACKGROUND AND FRAMEWORK CONDITIONS. 111.1.Energy Challenges in West Africa. 111.2.RE&EE Opportunities, Potential and Barriers in West Africa.131.3.International Context.151.4.Regional Integration in the ECOWAS Energy Sector.151.5.The Foundation of ECREEE.162. The ECREEE Business Model.182.1. Legal and institutional structure of ECREEE.182.2. Scope of mandate and comparative advantage of the Centre.222.3. ECREEE’s Objectives, Result Areas and Value Chain.252.4. Indicative budget and financial sustainability.293. Organizational Development (2011–2016).363.1. Staff strategy and organizational chart.373.2. Consolidation of administrative procedures and controls.393.3. Consolidation of project cycle management and quality framework.393.4. Cooperation with know-how and technology partners.393.5. Key Programmes, Projects and Activities (2011–2016).403.6. Services of the Centre.454. Performance Indicators, Monitoring and Evaluation.47Annex A: SWOT Analysis of ECREEE.55Annex B: ECREEE Funding Strategy.62Annex C: List of RE&EE Institutions in ECOWAS.74Appendix D: Case Studies of Other Regional RE&EE Centres.75[8]

Business Plan ECREEEFiguresFigure 1: ECREEE Governance Structure.21Figure 2: ECREEE’s Strategic Value Chain of Result Areas.28Figure 3: Interrelationships and spill-over effects in ECREEE’s Value Chain.28Figure 4: Evolution of ECREEE Revenue Sources – Year 2012.33Figure 5: Evolution of ECREEE Revenue Sources – Year 2016.33Figure 6: Evolution of ECREEE Revenue Sources – Year 2020.34Figure 7: Evolution of non-donor revenue sources.35Figure 8: Organizational Chart of ECREEE (2012–2016).38Figure 9: Map of ECREEE’s comparative advantage.56TablesTable 1: Scope of intervention and stakeholders.22Table 2: ECREEE’s Strengths and Weaknesses.24Table 3: Overall and Specific Objectives.25Table 4: Five Result Areas.27Table 5: Indicative ECREEE Budget (2012–2016) Indicative Budget Requirements (EURO).31Table 6: ECREEE activities and revenues by 2020.32Table 7: Performance Indicators for Result Area 1.36Table 8: Performance Indicators for Result Area 2.41Table 9: Performance Indicators of Result Area 3.42Table 10: Performance Indicators of Result Area 4.43Table 11: Performance Indicators for Result Area 5.45Table 12: ECREEE Performance and Monitoring Indicators (2011–2016).48[9 ]

ECREEE Business PlanList of Acronyms2ieACP-EUADAAfrican Carribbean Pacific – European UnionAustrian Development AgencyAEAAustrian Energy AgencyAECIDSpanish Agency for International Development and CooperationAEEAssociation of Energy EngineersAEE-IntecAFRETEPAfDBAEE – Institute for Sustainable TechnologyAfrican Renewable Energy Technology PlatformAfrica Development BankAIPAfrica Infrastructure ProjectAREAREABACAlliance for Rural ElectrificationAfrican Renewable Energy AllianceBusiness Advisory CommitteeBENTDBOADCDMBureau National d’Etudes Techniques et de DéveloppementBanque Ouest Africaine de DéveloppementClean Development MechanismsCENERNational Renewable Energy CentreCERCertified Emissions ReductionsCIEMATCLEANCOMFAR[10]Centro de Investigaciones Energéticas, Medioambientales y TecnológicasCoordinated Low Emissions Assistance NetworkComputer Model for Feasibility Analysis and ReportingCOP-XVIISeventeenth Conference of the Parties to the United Nations Framework Convention onClimate ChangeCSETCenter for Sustainable Energy TechnologyCSPCSRConcentrated Solar PowerCorporate Social ResponsibilityDAFDMODEBEBIDDepartment for Administration and FinanceDepartment of Management and Organizational DevelopmentExecutive BoardECOWAS Bank for Investment and DevelopmentEBREPECOWAS-Brazil Renewable Energy PartnershipECMSEnterprise Content ManagedECOWASEconomic Community of West African StatesECREEEECOWAS Regional Centre for Renewable Energy and Energy EfficiencyECREEE EBECOWAS Regional Centre for Renewable Energy and Energy Efficiency Executive BoardECREEE SECECOWAS Regional Centre for Renewable Energy and Energy Efficiency SecretariatECREEE TCECOWAS Regional Centre for Renewable Energy and Energy Efficiency TechnicalCommitteeEDEEExecutive DirectorEnergy efficiency

Business Plan ECREEEEERFEnergy efficiency reconciliation factorEIBEuropean Investment BankENDA-TMEnvironmental Development Action in the Third WorldERERAECOWAS Regional Electricity Regulatory AuthorityEREFECOWAS Renewable Energy FacilityERIBIESCORenewable Energy Investment and Business InitiativeEnergy Service CompanyESMAPEUEI - PDFEUETSEnergy Sector Management Assistance ProgrammeEuropean Union Energy Initiative – Partnership Dialogue FacilityEuropean Union Emissions Trading SchemeGBEPGDPGlobal Bioenergy PartnershipGross domestic productGEFGlobal Environmental FacilityGFSEGlobal Forum on Sustainable EnergyGHGGIZGSRGreenhouse GasDeutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)Global Status ReportGVEPGlobal Village Energy PartnershipICCICRISATICSEIDAEIEAInternational Chambers of CommerceInternational Crops Research Institute for the Semi-Arid TropicsInternational Council for Sustainable EnergyInstitute for the Diversification and Saving of EnergyInternational Energy AgencyIEPFIFCL’lnstitut de l’Energie et de l’Environnement de la FrancophonieInternational Financial CorporationIFIIHAInternational Finance InstitutionInternational Hydropower AssociationIIASAInternational Institute for Applied Systems AnalysisIRENAInternational Renewable Energy AgencyITCThe Canary Islands Institute of TechnologyKNUSTKwame Nkrumah University of Science and TechnologykWhkilowatt hoursLPGMDGliquid petroleum gasMillennium Development GoalsMEDRECMediterranean Renewable Energy CenterMFAMinistry of Foreign AffairsMOUMemorandum of understandingMRETMW(h)Minimum renewable energy targetsMegawatt (hours)NFINational Focal Institutions[11]

ECREEE Business Plan[12]NGONon-governmental organizationsOECDOLADEOrganisation for Economic Cooperation and DevelopmentLatin American Energy OrganizationOPICOverseas Private Investment CorporationPHCNPublic Holding Company NigeriaPOCPoint of contactPPAPower Purchase AgreementPPDUPVREECOWAS Project Preparation and Development UnitPhotovoltaicRenewable energyRECPResource Efficiency and Cleaner ProductionRE&EEREEEPRenewable energy and energy efficiencyRenewable Energy and Energy Efficiency PartnershipREN-21Renewable Energy Policy Network for the 21st CenturyRESRETRenewable Energy SourcesRenewable Energy TechnologiesRIBISAISRenewable energy investment & business initiativeJohns Hopkins School for Advanced International StudiesSEEA-WAEnergy Efficiency for Access in West AfricaSHSSMESolar Home SystemsSmall/Medium Sized EnterpriseSPWASWOTStrategic Programme for West AfricaStrength, weakness, opportunity, threatTCTERITDUEMOAUNEPTechnical CommitteeThe Energy Resources InstituteTechnical Energy DepartmentUnion Economique et Monétaire Ouest AfricaineUnited Nations Environment ProgrammeUNDPUnited Nations Development ProgrammeUNIDOUnited Nations Industrial Development OrganizationUSAIDUnited States Agency for International DevelopmentUSTDAUnited States Trade and Development AgencyWAEMUWAGPWest African Economic and Monetary UnionWest Africa Gas PipelineWAPPWWEAWest Africa Power PoolWorld Wind Energy Association

Business Plan ECREEE1. BACKGROUND AND FRAMEWORK CONDITIONSThe Economic Community of West African States (ECOWAS) comprises 15 countries1 whose territories spana broad swathe of the Sahara Desert and the tropical coastal lowlands of West Africa, from the Cape Verdearchipelago in the west to Nigeria in the east. The region has a population of approximately 300 million inhabitants,equivalent to roughly one third of Africa’s total as of 2010, even while it represents just 16% of the continent’s totalsurface area; the ECOWAS region is equivalent to about half the surface area of the United States, or about thesame as Western and Eastern Europe combined. Despite considerable mineral wealth, agricultural potential andwater resources, the region includes some of the world’s poorest nations. Given the uneven extent of economicdevelopment in the region, governments are focused on fostering economic growth and employment expansiontogether with the achievement of basic services in the areas of health care, education, housing and transportation.1.1.Energy Challenges in West AfricaWest Africa’s energy sector must address the interrelated challenges of energy access, energy security andclimate change mitigation and adaptation, which are intertwined with the region’s economic challenges. Indeed,this trio of challenges in turn considerably complicates the implementation of regional strategies aimed at fosteringsocio-economic development, attracting foreign investment programmes, providing basic social services, andachieving the Millennium Development Goals (MDGs). West African energy policy must therefore address thesechallenges in an integrated way that focuses on social, economic and environmental sustainability.1.1.1.Energy povertyEnergy poverty and its consequences for local economies and social development are projected to remain thepredominant challenge for West Africa through to 2030. Per capita electricity consumption in the region averaged88 kWh in 2005, one of the lowest rates in the world. Moreover, significant energy access and energy pricinginequalities exist between urban and rural areas. Whereas urban areas tend to use energy in the form of electricity,charcoal, kerosene and other fuels, rural areas continue to rely on largely traditional biomass for meeting theirenergy requirements for cooking, lighting and space heating. Household access to electricity across the regionis about 20%, but wide gaps exist between the access rates in urban areas that average 40% and in rural areasfrom 6% to 8%.The grids usually serve only urban and peri-urban areas (with the exception of Cape Verde andGhana) and leave the rural electricity supply dependent on expensive diesel generators. The electricity consumertariffs in the majority of ECOWAS countries reach equal or higher levels than in industrialized countries with higherincome (e.g. USA, Europe). Low-income groups are obliged to spend much more of their income on poor qualityenergy services. Traditional fuel derived from unsustainably harvested firewood is causing deforestation acrossthe region, general deterioration of key ecosystems, and exposes the population to indoor air pollution, amongother damaging impacts.1.1.1.Energy securityEnergy security is of high importance for the governments in West Africa as it affects economic growth andindustrial development. The external and internal environment for the energy sector has changed considerably inpast years and requires urgent answers from policymakers as well as public and private investors. Currently, theECOWAS region is confronted with the reality of energy vulnerability, fuel price volatility and system unreliability.The electricity systems in West Africa are facing tremendous challenges due to the growing gap between predicteddemand, existing supply capacities and limited capital to invest. The energy intensity in the countries remainshigh and electricity is used in an inefficient way throughout all sectors. At least 60% of the ECOWAS electricitygeneration capacity runs on expensive diesel or heavy fuel and imposes significant pressure on national budgets,private households and the private sector. Most ECOWAS countries are inadequately prepared to respondeffectively to the challenges of energy security. The absence of governmental policies, low private and publicinvestments, and poor operation and maintenance of grids and generation facilities has led to a severe energy1The member countries are: Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, SierraLeone and Togo.[13]

ECREEE Business Plancrisis. Overall, the performance of the West African power sector over the years has been unsatisfactory. Despiteimplementing power sector reforms aimed at stimulating private sector participation and liberalization, the utilityservices in the region have not been able to mobilize significant private investment.1.1.1.Climate change mitigation and adaptationWest Africa’s economies will inevitably be confronted in the coming decades by the effects of mitigation andadaptation costs of climate change. Given the region’s vulnerability to climate change, the urgent need for reliableand affordable energy supply to ensure energy security and energy access poses a dilemma for policymakers.Urgent investments in generation and transmission facilities are needed to satisfy the increasing urban and ruralneeds for modern, affordable and reliable energy services. In the meantime, expansion of an energy supply basedon inefficient, low-cost, fossil fuel based combustion technologies will increase GHG emissions and increasenegative climate change impacts. New energy infrastructure investments have a long lifespan and determine theGHG emissions for the next 20 to 30 years. Climate change impacts (temperature rise, extreme weathe

The Business Plan provides a powerful strategic long-term framework which allows continued monitoring of the achievements of the Centre. By mapping out a clear vision, the plan serves to guide the Centre towards a position of relevance and sustain-ability in the coming years. The strategy includes the definition of objectives and milestones .