Research Title: Malawi and Zimbabwe research study: Stimulating local financing for renewable energy projects for increased energy access.
Project Title: Green and Inclusive Energy Southern Africa
Overview
HIVOS is a Dutch development organization working for further emancipation and democracy to combat poverty in developing countries. Its programmes are in Africa, Asia, South Eastern Europe and Latin America. In Africa its programmes are mainly in East and Southern Africa. HIVOS broader organizational work focuses on Sustainable development that embraces people and nature to make society more equitable and lobbies to influence policy in favour of these objectives. Currently, Hivos has two broad programmes which are namely; Green Society and Open Society. It is under the Green Society that these TORs are being developed for a project entitled “Green and Inclusive Energy”. The project in particular focuses on two key dimensions: firstly, Donor influencing so that key donors for instance the European Union, the World Bank and others financially support decentralised, renewable energy and energy efficiency solutions that suit all people, including the poor. Secondly, HIVOS supports and works with NGOs in developing countries to advocate for an increased support for renewable energy access in remote locations. This also includes developing joint strategies to influence governments and donors, identify problems and come up with policies and activities to scale up existing renewable energy successes.
In southern Africa the project is focusing on Malawi and Zimbabwe. The two countries have faced difficulties in providing modern energy services to their general populace due to various problems which range from obsolete national grid infrastructure, investment in high cost inefficient technologies like coal plants and weak investment framework in the renewable energy sector. However, there is empirical evidence to show huge interest and effort from the two governments to invest in the sector through reviews in the policy and regulatory frameworks. Despite all these efforts investment in the sector has been minimal, with a big chunk of globally committed climate finance going to middle/high income countries. According to the IIED/Hivos research published in June 2016 the total approved international public climate finance reached a total of USD 14.1 billion between 2003 and 2015. The energy sector received a total of USD 5.6 billion during this period[1]. Despite the energy sector receiving this amount of money only 5% has been allocated to low income countries with 95% going to middle and high income countries. As shown by the IIED/Hivos research most of the international public climate funding for energy has been going towards large-scale grid-based projects, rather than small-scale decentralised renewables (solar home systems, improved cookstoves etc) which are often more appropriate for reaching remote and low-income populations . Follow-up research by IIED in Tanzania finds a similar picture to the global story: national-level public finance flows (from government, development partners) continues to prioritise large-scale grid connection projects over off-grid renewables.[2] The importance of better data-gathering has been identified by Sustainable Energy for All, which is currently developing a methodology aimed to help track global and national funding flows (due to be published in September 2017), with case studies on Ethiopia, Kenya and Bangladesh).
This trend for financing large-scale energy and projects in middle income countries points to a need to look at how governments in low-income countries could find ways to stimulate investment in the sector from their own domestic financial institutions and resources (e.g. national development banks, commercial banks, public energy budgets, microfinance, private investors)
This research seeks to build on the financial flows work and exploring domestic finance options. It will provide analysis of the following:
- The current financial flows for expanding access to renewable energy (particularly through decentralised solutions) in Malawi and Zimbabwe both from domestic and foreign public funding (e.g. bilateral donors, multi-lateral funds, government energy budgets). Illustrate this through presentation of data, clear visuals and analysis of trends over a 10 year period (or period appropriate to available data).
- An overview of any existing domestic-led financing institutions, funds or mechanisms in Malawi/Zimbabwe targeting renewable energy for expanding access. (The consultant will propose a scope and definition of ‘domestic financing’ in the inception phase).
- An initial overview of international/national private sector investment in decentralized renewable energy access in Zimbabwe and Malawi, mapping out key actors, size of investment and financing mechanisms. (Given the diversity of private sector flows (from impact investors to commercial banks and individual enterprises e.t.c), the consultant will propose the scope as part of the inception phase.)
- Clarify the stated priorities of key funders/investors for Malawi/Zimbabwe in terms of who they are trying to reach, and with what level or type energy service. In particular, which tiers of access (from the global tracking framework)[3] and population segments different types of decentralized funders/investors are targeting.
- Clarify the barriers in managing and accessing finance faced by government (who disburse funds) and decentralized energy providers who seek funding (private sector, CSOs, social enterprises)
- Identify key priorities for improving funding arrangements from the perspective of different stakeholder groups – with a particular focus on exploring options for increased domestic-level resource mobilisation and financing mechanisms.
Objective:
- Build understanding of current financial flows for renewable energy, with a focus on financing decentralised energy which expands energy access for low-income and remote populations and
- Understand and explore innovative ways to stimulate more national financing for renewable energy projects for increased energy access in Malawi and Zimbabwe
Scope of work:
- The study will be conducted through desk research and consultation with wider stakeholders from governments, CSOs and private sector.
- Some of the specific questions that will be critical in the research are:
- What are the existing finance trends – in terms of volumes, sources and mechanisms – in renewable energy sector in Malawi and Zimbabwe?
- What robust estimates exist on the overall financing needs for energy access / renewable energy / decentralised energy?
- What have been the priorities for investment in the energy sector in Malawi and Zimbabwe? E.g. how much funding is going to decentralised renewable energy aimed at increasing access (e.g. SHS, clean cook stoves)?
- Do Zimbabwe and Malawi currently have existing national energy financing mechanisms, and if so how do they operate
- What are the barriers to stimulating more domestic resource mobilisation and engagement of national finance actors Banks, government budgets MFIs)
- What changes in policy and practice could increase financing for decentralised renewable energy access, particularly among national finance actors?
Deliverables:
Estimated timeline to complete the job is 120 days. (1 July- 30 October 2017). Key milestones/deliverables include:
- Inception report – a detailed approach and methodology for the research, and description of activities and milestones. To be submitted approximately 10 days after commencing the work, with a review before proceeding
- First draft report to be submitted approximately 60 days after commencing the work
- Second draft, incorporating reviewers comments, after 80 days
- Final draft after 100 days
- Presentation of the research by 30th of October 2017 (after 120 days) to Hivos (internal)
Areas of work:
- Malawi
- Zimbabwe
Please Note: Travel and lodging budget will be provided using Hivos approved rates.
Requirements
- Advanced degree in appropriate subject e.g. Energy
- Excellent knowledge of energy access and renewables in the region and internationally
- The team leader (if the consultancy is composed of a team) should have 5-10 years’ experience working within the energy and /or financial sector. The team should be composed of renewable energy, economic/financial and social scientist expert/s
- Excellent knowledge of Global/Regional renewable energy/ energy access financing mechanisms
- Track record on writing published research for lobby and advocacy purposes
- List of relevant publications/web links
- Experience in disseminating and communicating research for policy-influencing
- Good networks with relevant public or private sector organisations to be interviewed for the research or with access to finance data is an asset
- An understanding and relevant internal review processes to ensure high quality research and compliance with research ethics
About The Consultancy
This consultancy is designed to develop and submit a publication which will be able to influence creation of a well-established financial system for renewable energy financing. Hivos will approve the final version prior to publication. It is intended that the full report will be distributed as a publication with a summarised version including key policy recommendations to ministries of finance and energy in Malawi and Zimbabwe. It is therefore important for the consultancy to propose innovative ways to publish and distribute the detailed report and policy recommendations.
We invite interested consultants (individuals, firms) to submit the following application documents:
- CVs of individual/proposed team and their role
- Short proposal outlining how you/your team meet the criteria and particular value added that you bring in delivering the research objectives.
- A financial proposal including a daily rate and any additional costs
The interested consultants should submit their applications to [email protected] by the 30th of June 2017.
[1] Unlocking climate finance for decentralised energy access Hivos/IIED,2016 http://pubs.iied.org/pdfs/16621IIED.pdf
[2]Money is Power Tracking finance flows for decentralised energy access in Tanzania IIED, 2017 http://pubs.iied.org/pdfs/16623IIED.pdf
