Rural Electrification in Swaziland Phase 3 - Policy Formulation Draft Final Report Mark Davis, Glynn Morris and Colleen Butcher January 1997 Executive summary II Modelling of this scheme indicates that, on average, a total suh;idy of E800 000 will be required to cover the full costs of the loan repayments. It is further estimated that there will be operating losses of E3.3 million, on average, for this programme. This is mainly a consequence of the exfoting cross-subsidies in the domestic tariff, and if this is addressed through a "rebalancing" of tariffs, this loss should fall away. Institutional issues The resolution of the most appropriate institutional framework requires Government, together with other stakeholders, to decide how much of the reBponsibilities should be assigned to SEB, and whether these responsibilities can be better managed by existing or proposed agencies. Some of the options available require a substantial restructuring of the electricity industry - an institutional route which, if preferred, clearly requires careful consideration. The key recommendations made here are as follows: • Electrification planning: a small sub-committee of SCORE be established to perpetuate planning functions. • Implementation: it is recommended that SEB take the lead in implementing the projects funded through this programme. If it is necessary for SEB to contract in outside assistance in the form of consulting engineers and contractors, this route should be adopted. • Operation: it is recommended that SEB operate the electrification projects funded through this programme. • Monitoring and evaluation: it is recommended that monitoring and evaluation be shared between SEB, the MNRE, PEU and SCORE, in the mmner discussed above. In the development of a new performance contract for SEB, attention should be paid to the inclusion of rural electrification targets and funding systems. Whichever agency is made responsible for the tasks associated with rural electrification, Government must recognise the funding implications which accompany such a delegation of duties. Electrification planning Every effort should be made to ensure that electrification planning integrates rural electrification with other development initiatives. The following recommendations are made in support of this. Planning and prioritisation process The following recommendations are made: • A planning sub-committee of SCORE be established, comprised of representatives from MNRE, SEB and MEPD. This sub-committee should be driven by MNRE and should be responsible for the following tasks: • Infonnation collection for line extension projects: each year the following years' line extension projects should be visited and information collected as per the questionnaire at the end of this appendix. • Monitor tlie line extension fund: monitor the line extension fund and evaluate the impact which new projects will have on this fund. Use this information to inform Government budgets for rural electrification. • Evaluate applications for grid extension: if a community applies to be included in the line extension programme, the committee should collect information on the EDRC Rural Electrification In Swaziland Ill settlement and evaluate whether it should be included in the medium term electrification programme • Monitor mral development initiatives: The planning committee should monitor rural development initiatives, with attention paid to future irrigation projects and the development of the "economic corridors". Future developments may mean that the line extension programme should be updated to take account of new initiatives. Rural development initiatives The prioritisation of the line extension programme should take consideration of the following factors: • Rural services: A number of unelectrified clinics have been identified. These should be considered for grid electrification. There are also a large number of unelectrified rural schools. A number of these can be electrified at low cost (i.e. they are close to existing distribution lines). The position of unelectrified high schools should be considered when planning future line extension projects. • Physical infrastructure: Many Tinkhundla centres do not have access to electricity, and SPTC has 35 unelectrified telecommunication stations. Attempts should be made to include these in the grid extension programme, as well as consideratino given to any unelectrified government facilities such as police stations and army barracks. The RWSB is planning a number of macro projects over the next few years. A number of these require pumping - and electricity is the preferred fuel. In addition, there are a number of existing water schemes where electricity is required either to replace defunct diesel pumping systems or to introduce a pumped reticulation scheme. • Economic activities: The MHUD has developed a system of classifying rural centres according to their future economic growth potential. It is further recommended by the NPDP that centres with a classification of six and above merit electrification. A total of 19 such unelectrified centres have been identified and should be considered in the electrification programme. A irrigation potential in the major river basins was documented and it is clear that there will be pumping requirements in the future - mainly in the Lubombo region. The electrification planning committee should monitor irrigation developments. Optimisation of mral electrification projects It is widely accepted that electricity is a necessary but insufficient condition for development. The following strategies may assist in optimising rural electrification projects. • Appliance sales: The promotion of electrical appliances will assist in broadening the benefits of electrification. It is recommended that SEB and the MNRE collaborate in introducing appliance distributors to newly electrified areas, with the intention of holding demonstrations and the promotion of appliance sales through local stores. • Battery charging centres: It is recommended that a system of battery charging centres be piloted for the rural electrification programme. • Promotion of productive applications: It is recommended that in newly electrified · areas a demonstration be held by the MNRE, together with small business development agencies, on the potential business opportunities made possible by electrification. • Load management: A number of load management strategies should be considered if rural load factors lead to unacceptably high cost increases. EDRC Executive summary Iv Off-grid options It is evident that not all households, community facilities or commercial enterprises will be able to obtain a grid connection. The following recommendations are made for off-grid options: Households Support should be given to the current solar home dissemina.tion programme. This support should include information transfers regarding future line extension projects as well as advice on standards and specification. Where households are relatively close to a grid line, but too for to be able to afford a grid connection, it is recommended that battery charging centres be established. This would involve the sale of suitable equipment to households, who can then transport their batteries to local recharging points. As far as possible, tnis should be a private sector initiative, although Government and utility assistance may be required to initiate the first pilot projects. It is recommended that Kubuta be considered for a pilot project (since a grid line is here, a battery charging centre could easily be established). Clinics There are a number of clinics which are too far from the grid to warrant electrification. These are Mpuluzi, Sigcineni, Musi and possibly Makhava. Other non-Government clinics which cannot be easily reached by the grid include Sincaweni and Manyeveni (among others). It is recommend that where diesel generators exist, these should be upgraded to genset plus battery systems in order to improve the quality and reliability of supply. This will allow the installation of security equipment, including motion detector lights and alarms. The approximate cost of a large upgrade is in the region of E45 000 per site. It is recommended that this system be provided at Mpuluzi, Sigcineni, Musi, Makhava and Manyeveni. Where solar systems exist (at Sigcineni and Musi), it is recommended that these be connected to the battery bank. At Sincaweni, where no diesel generator exists, it is recommended that the existing solar system be upgraded to include lights in all nurses' accommodation as well as an upgraded system at the clinic (incorporating motion detector lights). Schools There are a large number of unelectrified schools in the country, many of which will remain beyond the reaches of the grid. A set of off-grid supply options have been prepared (see Appendix A.3) for the Ministry of Education and these are under consideration by thi~• ministry. EDRC Table of contents Executive summary-................................................................................................................ i Table of contents ................................................................................................................... v Chapter 1: Introduction ........................................................................................................ 1 1.1 Introduction .................................................................................. , ............................... 1 1.2 Objectives .....................................................................................................................