Clean Power Generation: The Case of Renewvia Energy

The project in brief

Implemented by

United Nation High Commission for Refugees (UNHCR) 

Country

Kenya, Kalobeyei settlement

Duration

September 2019 - Ongoing

Description

The solar photovoltaic (PV) mini grid project, which was established in 2019, serves more than 500 customers ranging from households, businesses, and institutions. To support the set-up of the project, the UK’s Foreign, Commonwealth & Development Office (FCDO)  provided a grant of US$630,000 to the Mini Grids Results Based Financing project. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), offered performance-based financial incentives to Renewvia Energy to develop the project.

Households, businesses, and institutions have reliable and affordable power. Households’ incomes have greatly been improved, essential services such as healthcare access and e-learning for school children has been enhanced.

Project aims 

1. Improved access to clean, modern, and affordable electricity to refugee households and host community.
2. Improved security of supply of electricity to refugee households and host community.
3. Guaranteed safety of electricity supply to refugee households and host community.

Resources used 

To set off, the Foreign, Commonwealth & Development Office (FCDO) provided a grant of US$630,000 to the Mini Grids Results Based Financing project. GIZ offered performance-based financial incentives to Renewvia Energy to develop the project. Through these grants, Renewvia Energy was able to timely implement the project and set tariffs that were affordable to refugee households and businesses.

Main activities of the Good Practice

• The project relied mostly on local labour – refugees and host community members - to implement the project. This increased the community’s ownership of the project.
• Appointment of a refugee as the manager of the solar installation – when the project had became operational, Renewvia Energy appointed a refugee to manage installation. The manager is responsible for operation and maintenance as well as addressing power supply issues as reported by the mini grid customers.
• Setting of affordable tariffs – compared to other mini grids set up in Kalobeyei, Renewvia Energy has set the lowest tariffs. Households and businesses are charged US$0.17/kWh and 0.44/kWh respectively.
• Provision of reliable, modern, and clean energy – before Renewvia Energy set up the solar PV mini grid, customers used to get supplied electricity from diesel generators. The supply was characterised by unreliability, safety concerns (poor workmanship on distribution network, internal wiring, and exposed live wires) and exorbitant tariffs. Now, customers are reporting reliable and clean power supply that is safe.
• Technology and knowledge transfer – during and after implementation of the project, Renewvia Energy used local (refugee and host community) skilled labour. On completion of construction works, the company additionally trained a pool of technicians who are presently on standby to address supply challenges within and around the camps. These technicians are now deriving a livelihood from provision of electric equipment repair and maintenance services. Their client base includes refugee households and businesses, local and international NGOs, UN agencies and state agencies.

Partners

• Federal Ministry for Economic Cooperation and Development (BMZ) 
• Gesellschaft für Internationale Zusammenarbeit (GIZ) 
• United National High Commission for refugees (UNHCR) 
• International Finance Corporation (IFC) 
• Africa Enterprise Challenge Fund (AECF) 
• Kakuma Kalobeyei Challenge Fund (KKCF) 

Challenges and how they were overcome

Challenges

• High capital cost of setting up a mini grid
• High risk associated with investment in a humanitarian setting

How they were overcome

Renewvia Energy sought grant funding from donors. This allowed it to timely implement the project and later to charge competitive tariffs therefore, UNHCR provided financial guarantee to ensure donors accountability and reliability of the project.

Results of the Good Practice 

• Better health for households as electricity substituted firewood.
• More income retained within the household level - money that would have otherwise been used to replace a damaged solar lantern; purchase firewood for lighting could be used to meet other costs.
• Increased income to businesses – restaurants and bars were able to sell cold drinks. Moreover, communal lighting extended operational hours long after sunset. This translated to more income from sale of goods and services.
• Reduced food wastage - Households as well as restaurants could now preserve food and vegetables in fridges thus increasing their shelf life.
• Increased security in the camps.

How the project meets the GCR Objectives

Objective 1: Ease the pressures on host countries

Increased access to electricity means households can shift from use of charcoal and/or firewood to electric cooking. This would put an end to constant conflicts with the host community (and host country) when it comes to deforestation around the camps. Moreover, national electricity grid only covers major centres within the Turkana County. Extending it into the refugee camps would create hostility between the host community and the refugees. This project has alleviated such a scenario.

Objective 2: Enhance refugee self-reliance

Access to electricity has increased employment opportunities to households and businesses through productive use of power. Individuals have started barbershops, salons, restaurants, phone charging services, etc. these businesses have increased refugees’ self-reliance.

Objective 3: Expand access to third-country solutions

Technicians who have been trained via this project stand to gain through use of acquired skills to earn a living in a country they will be resettled. This will in turn expand access to third country solutions.

Objective 4: Support conditions in countries of origin for return in safety and dignity

Awareness created through opportunities brought about by access to modern, reliable, and sustainable electricity can be used for advocacy purposes by the refugee communities in their country of origin.

Next steps 

There are plans to expand the generation capacity by 541kWp and extension of distribution lines into more villages. This will bring in an additional 3,000 households and businesses to the solar PV mini grid.

Further support required for the project to continue or scale up

The current project only covers around 4% of the population. With the expansion plans (541kWp), access rate will improve to 35%. This calls for replication and scaling up of such projects across Kakuma and Kalobeyei Integrated Settlement. To make the generated power affordable to households and businesses, there is need to provide grant financing as well as financial guarantees to the private mini grid operator.