“Development of Cornerstone Public Policies and Institutional Capacities to Accelerate Sustainable Energy for All (SE4All) Progress” Project

The inaugural meeting of the Financial Support Scheme (FSS) Investment Committee (IC) held in Maseru, Lesotho on Thursday, July 11, 2019 has marked an important milestone in the implementation of the “Development of Cornerstone Public Policies and Institutional Capacities to Accelerate Sustainable Energy for All (SE4All) Progress” Project. SE4All Project is implemented by the Government of Lesotho through the Ministry of Energy and Meteorology (MEM) in partnership with the United Nations Development Programme (UNDP) with support from the Global Environment Facility (GEF). One of the objectives of this project is to unlock domestic investments in small-scale renewable energy projects in Lesotho through provision of technical assistance and financial support via the Financial Support Scheme (FSS). The FSS Investment Committee (FSS IC) is an advisory body established to ensure that the FSS objectives are met and will play an important role in ensuring transparency of the investments, guaranteeing an inclusive and impartial decision-making process, and building national ownership and expertise around energy finance. The committee is made up of 8 members representing government, academia, development partners and parastatals.

The inaugural meeting discussed in details Terms of Reference (TORs), Rules and Procedures for the FSS IC.

Since the publication of the FSS first call for proposal on May 10, 2019, the partners held a pre-submission workshop with the interested project developers to allow project developers an opportunity to raise questions and for the FSS partners to provide guidance on how to prepare proposals that meet the eligibility and selection criteria. At the close of this call for proposals, a total of 74 proposals were received with 34 for Renewal Energy Mini-Grids and 40 for Village Energy Centres.

The UNCDF and Investment Committee evaluate and approve projects for technical support and forecasted funding by the end of the year. UNCDF will also support the shortlisted projects with project development, structuring and transaction services.

The FSS IC is intended to conduct its business at the highest level of transparency and accountability and in full compliance with the best industry standards. To this end, each member of the FSS IC signed a Non-Disclosure Agreement (NDA) and a Conflict of Interest Declaration in line with ethics and integrity guidelines to ensure transparency and accountability during their tenure.

About the Financial Support Scheme (FSS)

The purpose of the Financial Support Scheme (FSS) is two-fold. First, it is designed to jump-start the market for isolated PV/renewable energy mini-grids and Energy Centres by providing start-up capital and reducing the developers’ financial requirement. Second, it is to minimise any potential risk on the part of lenders in making loans for renewable energy-based mini-grids/Energy Centres to encourage more private finance for this type of projects by demonstrating acceptable levels of risk. Through FSS, the project aims to support establishment of 10 renewable energy mini-grids and 10 Energy Centres in the defined geographical areas. FSS services are available for the period of 3 years. Detailed pre-feasibility studies have been carried out for specific locations where the FSS supported projects are to be implemented. These pre-feasibility studies are made available to the interested applicants.

Renewable Energy Mini-Grids

FSS targets renewable energy mini-grids with at least 18 kW of PV (or equivalent in terms of other RETs as indicated in the detailed pre-feasibility studies) installed in selected sites in 5 districts, namely Mohale’s Hoek, Mokhotlong, Qacha’s Nek, Quthing and Thaba-Tseka.

A mini-grid is an isolated, community-level system, separate from the main electricity grid network that consists of generation and distribution of electricity to consumers located in the vicinity. For renewable energy grids based on solar power, a battery storage system is typically included to balance supply and demand and intermittent generation patterns from renewable energy sources. In addition to the power generator, battery, and distribution network, a mini-grid may include a power conditioning unit consisting of junction boxes, charge controllers, inverters, distribution boxes and wiring/cabling, all located within a container or purposely constructed building.

Energy Centres

FSS will support the establishment of 10 village Energy Centres, in selected sites in 5 districts including Mohale’s Hoek, Mokhotlong, Qacha’s Nek, Quthing and Thaba-Tseka.

Energy Centres present an alternative solution to “off-grid” villages by offering access to electric and non-electric energy sources. They can help consumers to save cost of transportation and time facilitating their access to such non-electrical energy sources such as kerosene, LPG, portable LED lights etc. Energy Centres may also feature power charging facilities. In this project, only renewable energy driven power chargers are covered. Customers living in the vicinity of the Energy Centre may charge their mobile phones, lanterns, radios and other battery driven devices. Also other forms of modern energy and their applications are supplied e.g. PV-operated portable LED lights, solar mobile phone chargers, solar home systems, energy efficient cook stoves, etc. Energy Centres help to disseminate modern lighting, cooking and heating solutions to rural areas which do not have access to these modern services and technologies.