Sizing Renewable Energy Systems for Different Facilities and Translation to Carbon Credits

1. Energy Management
Workshop,
Africa Carbon Exchange.
Sizing Renewable Energy Systems
for Different Facilities and
Translation to Carbon Credits

2. Presentation
1. Introduction to Viability Africa
2. Overview of Existing EE Regulatory
Framework in Kenya
3. Scalability of RE systems for Carbon
Credit financing
4. Industrial EE and RE and Climate
Financing Opportunities
5. Domestic EE and RE and climate
financing Opportunities
6. Case Studies

3. Our Vision
Viability Africa, LLC’s overriding objective is to operate as the
leading development and financial advisory firm for clean
technology projects and ventures across East Africa. Viability Africa
will support investments that exhibit economic, technical,
environmental, and social viability and sustainability. The growth of
our team will focus on the recruitment and development of East
Africans seeking to become the future business and political leaders
of their country and region. Our Founders have committed to
reinvesting a significant portion of the company’s earnings to ensure
the company will have long-term sustainability and impact, and to
solidify Viability Africa as a resource available to the market for
years to come as the clean technology sector grows in relevance
and impact across East Africa.

4. Viability Africa, LLC
Carbon Energy Environment
• Asset Development
• Transaction Management
• Asset Monitoring
• Feasibility Studies
• Project Financing
• Financial Advisory
• Project Management
• Environmental and Social
Impact Assessments
• Environment Audits
Founded in 2009, Viability Africa has headquarters in Nairobi,
Kenya with near term expansion plans to establish offices in Dar es
Salaam, Tanzania. Our current portfolio crosses a number of
countries in sub-Saharan Africa and includes a diverse range of
innovative technologies and solutions.

5. Presentation
1. Introduction to Viability Africa
2. Overview of Existing EE
Regulatory Framework in Kenya
3. Project Components for Success
4. Venture Components for Success
5. Accessing Finance through
Voluntary Carbon Markets
6. Case Studies

6. Overview of Existing EE Regulatory Framework
in Kenya
1. Existing Statutory Provisions
2. Ministerial Directives, Policies and
Regulations
3. Implementation Record
4. Comparison to other Jurisdictions
5. Need for a more powerful RE/EE Lobby?

7. Existing Statutory Provisions
• The Energy Act 2006
– Calls for the Minister (Cabinet Secretary) to promote RE
by formulating national strategy for research, providing a
working RE framework, promotion of RE specific
technologies, promotion of local RE manufacturing,
– Calls for the Minister (Cabinet Secretary) to develop a
national EE programme which includes standardization
using KBS, awareness creation, strengthening
consultation, financial assistance including financial
incentives for EE
– Factories and Buildings – Specific provisions allowing the
ERC in Consultation with the Minister (Cabinet Secretary)
to direct EE measures with sanctions for non compliance

8. Ministerial Directives,
Policies and Regulations
Sector Specific Requirements and Programmes
• 2004 – Sessional Paper No.4 on Energy
• Energy (Solar Water heating) Regulations 2010
• National Energy Policy – Third Draft – May 11 2012
• Establishment of the Centre for Energy Efficiency and
Conservation (CEEC)
The three instruments have varying implications either generally
or specifically as is the case for the solar Hot Water heating
regulations.

9. Implementation Record
The various initiatives have realized the following results:
• KAM-GEF programme resulted in energy Savings of
1,800 GWh
• Estimated GHG savings of 5.2 million tonnes of CO2e.
• Increased uptake of Solar Hot Water Heaters since
regulation passed even before it fully comes into force
with an estimated demand of 65,000 units per year
and Kenya’s status as a world leader in units sold per
head.
• Increasing awareness amongst industry players on the
need for increased EE measures

10. Comparison to Other Jurisdictions
1. Germany - 3 pillar approach
1. Reduced energy Demand on Buildings and minimum 20% RE in
Energy Mix
2. Financial Incentives for buildings at Federal , Regional and
Municipal levels
3. EE awareness including pilot programmes, and issuance of
Energy Performance Certificates (EPCs)
Results:
– 2006 - 2009, One million buildings refurbished
– 400,000 highly efficient buildings constructed
– 240,000 per year in the sector created per year
– 27 billion euros distributed in loans and subsidies between 2004 and
2009, for a total investment in building efficiency of nearly 54 billion
euros

11. Need for a more powerful RE/EE Lobby?
What is needed:
1. Increased standardization for EE and RE technologies coming into Kenya
2. Support for local manufacture and assembly
3. Strengthen legislation around implementation of the existing legislations
4. Encourage tax rebates/ alternative incentives around EE for industrial and
commercial premises
5. Train local experts and local skills

12. Scalability of RE systems for Carbon Credit
financing
1. Carbon Markets
2. Case Studies of Existing Projects
3. Costs and economic realities

13. Carbon Markets
• CDM - Market opportunities post 2012
• Gold Standard VCS and other trading schemes – Price
consideration against sustainability
• Project development considerations
– Additionality
– Sustainability
– Consultant costs vis-à-vis profitability
– The opportunity in consolidating efforts under PoAs

14. Case Studies
• Kenya has 14 registered CDM – Standalone projects –
90% are RE based
• Project activities which qualify for carbon crediting:
– CFL Lighting
– Energy Efficiency at Industrial Facilities
– Electricity distribution and transmissions
– EE measures on commercial buildings
– and commercial plants

15. Case Studies
1. Domestic Energy Efficiency
1. The Paradigm Project
2. Aqua Clara Foundation
3. Triple Quest

16. Costs and Economic Realities
• Consultancy
• DOE/ Validation
• Miscellaneous expenses – LSC etc
• Registration fees

17. Voluntary Carbon Case Study: Safe Water
Team Kenya
• GS 1124
• Implementation of 2,000 water filters in rural households in Siaya and
Bondo (Nyanza, Kenya). One year rollout implementation timeline,
goal to establish the area as a distribution hub for future projects.
• Project Registered
• Prepayment Model
o First payment at Registration
o Project Milestones
o Carbon and Implementation Costs
• Scalable Model
o Three Micro-Scale PoA (Central America, East Africa, West Africa)
• Took Time to Develop
o 10 Months Registration
o 6 Months Transaction

18. Voluntary Carbon Case Study: AquaClara
• GS 1068
o Entrepreneur based model with tens of thousands of
biosand filters set to be installed. AquaClara manages the
supply chain to ensure the entrepreneurs have access to a
sustainable source of input requirements as well as
marketing and education resources. Focus is in Rift Valley
area but targeting numerous communities in Kenya.
• Large Scale Project
• In Validation
• Transaction Closed (Forward Agreement)
o Fixed Pricing, Upside Potential
o Forward Sale Structure

19. Voluntary Carbon Case Studies: Lessons
Learned
• Transparent Relationship
o Developer – Buyer
o Consultant – Developer
o Consultant – Buyer
• Realistic Expectations
o Timelines always seem to be overaggressive
o Costs are difficult to anticipate
o Maintain Conservative Approach
o Tonnage
o Costs
• Communication

20. Questions?
Nathan PM Gachugi
Project Manager
Viability Africa, LLC
www.ViabilityAfrica.com
Nathan.Gachugi@ViabilityAfrica.com