Energy Week 2006

Funding: GPOBA and ESMAP

Kilian Reiche and Dana Rysankova

The World Bank

OBA for Offgrid Electricity Access

Bolivia IDTR - Early Lessons

Electricity and ICT services via decentralized PPP US$60M – 10 years – 3 Phases

Phase I – Investment &TA>15,000 SHS + grid in Phase I>100k Bolivians benefit directly>1 million cell phone access

– connection+use!

– pro poor regulation

– universal access fund

Challenges: low population density, high poverty, socio-cultural issues, diverse indigenous population, political/social/fiscal crisis.

IDTR Bolivia

Decentralized Infrastructure for Rural Transformation

hard easiest

hardest easier

Closer to 100% Closer to 100% more offgrid more offgrid

Source: ESMAP 2006

Population range

Number of communit.

% of total population

Number of households

Households without electricity

Electricity coverage

Phone coverage

Internet coverage

Rural 1-350 27,242 28.5% 565,061 474,363 16.1%

351-2,000 1,531 11.1% 218,721 108,879 50.2% 0.0%

2,001-10,000 121 4.8% 94,658 20,319 78.5% 0.4%

0%

Urban 10,001 and

more

38

55.6%

1,099,225

100,928

90.8%

27.9%

5% TOTAL 28,932 100% 1,977,665 704,489 64.4% 15.7% 3%

Demand: - remote- low demand + income - high risk + cost

2000 Data GDP/ Cap [$]

Pop/km2

GDP/km2 [$]

Bolivia 1,035 8 7,535

Paraguay 1,504 14 18,479

Peru 2,056 20 41,608

Ecuador 1,047 46 47,912

Columbia 1,935 41 71,363

Brazil 3,503 20 69,669

Chile 4,703 20 93,190

Venezuela 2,025 27 53,282

Argentina 7,702 14 102,504 Offgrid + Subsidies

New SHS Medium Term Service ContractsNew SHS Medium Term Service ContractsMarket Stage Market Stage Competition Type: Competition Type:

Third way in between dealer + concession

• US$ 10M for 15,000+ SHS

• 14 areas (400-3000 SHS each) max. no. users at fixed subsidy

• Price caps and benchmarking prevent predatory pricing

• New Medium Term Service Contracts

– deep market penetration w/oproblems of classical concession

– 3+4 years (limits risk exposure)

– OBA: choice (user, supplier), creativity, performance incentives

– Decentralized market development (supply, demand)

– Decentralized M&E (costs in remote areas)

New SHS Medium Term Service ContractsNew SHS Medium Term Service Contracts

• Targeting: self selection + geographic

• Area selection based on productive potential, grid plans and synergies with ICT

• Beyond Connection: Productive Uses and Training for SME and HH

• Tenders need attention: - professional transaction advice - road show!

6 bidders entered 30 bids in tough times…

220

100

14 118 6

42

1

10

100

1000

Contactsroadshow

2 Entryprequal.

4 5 Firmssubm.

bid

7 Winners

Bolivia IDTR - 2005 SHS Tender - Summary Results

area minimum SHS bids winning bid gain1 1,401 3 1,822 30%2 1,228 2 1,536 25%3 1,590 3 2,147 35%4 399 2 421 6%5 1,112 2 1,501 35%6 1,440 3 1,872 30%7 921 2 1,198 30%8 1,323 2 1,786 35%9 712 2 962 35%

10 2,281 1 2,311 1%11 353 3 477 35%12 351 3 474 35%13 597 1 696 17%14 537 1 588 9%

14,245 17,791 25%

GOB "gain" in US$ 2,489,294

Road Show: Many bidders Road Show: Many bidders bidding works bidding works

Efficiency: Transaction Costs < GainEfficiency: Transaction Costs < Gain

Tender reduced national SHS Prices

Asia 2005• China 50 Wp $300-400• Bangladesh 50Wp $350• Philippines 50Wp $400-500

LAC 2005 (incl. inst.)• Bolivia IDTR 50Wp $600• Nicaragua 50Wp $800• Mexico 75Wp $1000• Argentina 100Wp $1000

1. Reduced 40% from Bolivia UNDP 2004

2. of this, 25% from tender min in spite of PV shortage

3. Bolivia IDTR 2005 lowest in LAC…

1. Input-Output: project – provider – user2. Well informed choice: creativity – winner’s curse (in/out) 3. Efficiency: control – capital costs (15/80/5%)

4. Tender Document: watertight – simple5. Quality: equipment – system – service (Ah)6. Risks: government – operator – user

(battery)7. Poll: Bank!

SHS OBA Tender SHS OBA Tender Trade Offs! Trade Offs!

Output I – Connection

Output II – Service quality

Output III – Application / use

Output IV – User satisfaction

Output V – Environmental benefits

Output VI – Complementary services

Output VII – Market development conditions

BoliviaNicaraguaArgentinaOBA Type: Project Provider

Output I – Connection

Output II – Service quality

Output III – Application / use

Output IV – User satisfaction

Output V – Environmental benefits

Output VI – Complementary services

Output VII – Market development conditions

BoliviaNicaraguaArgentinaOBA Type: Project Provider

Data Room – www.idtr.gov.bo

Balanced OBA design helped project to Balanced OBA design helped project to survive in tough times…survive in tough times…

• OBA means balancing trade-offs! Partnership lasts if fair deal for both sides!

• PPP: Bidders buy in! 30 bids in 2005 …in spite of country climate

• PPP: new Government accepts the model! 2006 mission confirms contracts + scale-up plans… in spite of strong stance against PPI

Thank you!Thank you!

OBA for Offgrid Electricity Access

Bolivia IDTR - Early Lessons

www.idtr.gov.bo