Off-Grid Solar Market Assessment Madagascar
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Final Report OFF -GRID SOLAR MARKET ASSESSMENT MADAGASCAR The World Bank July 2018 1220 18th Street NW, Suite 700 16 Great Chapel St, Driebergseweg 2, 3708 JB Zeist Washington, DC 20036 Soho, London W1F 8FL P.O. Box 55, 3700 AB Zeist United States of America United Kingdom The Netherlands +1 (202) 822-9100 +44 207 636 4352 +31 (0) 30 693 37 66 www.encludesolutions.com | www.encludecapital.com Authors: Enclude BV, The Netherlands Date: July 2018 Disclaimer: This document has been prepared in good faith on the basis of information available. Nevertheless, Enclude BV cannot guarantee or warrant the accuracy, reliability, or completeness of the information in this publication nor its usefulness in achieving any purpose. Readers are responsible for assessing the relevance and accuracy of the content of this publication. Enclude BV will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the Lighting Africa Program, its affiliated organizations, or the governments they represent. Enclude BV Final Report - Off-Grid Solar Market Assessment, Madagascar Table of Contents LIST OF FIGURES ...................................................................................................................................... 3 LIST OF TABLES ........................................................................................................................................ 4 1 INTRODUCTION AND SCOPE ............................................................................................................. 1 1.1 BACKGROUND ...................................................................................................................................... 1 1.2 OBJECTIVES OF THE STUDY ...................................................................................................................... 2 1.3 METHODOLOGY OVERVIEW .................................................................................................................... 2 1.4 STOCKTAKING ...................................................................................................................................... 2 1.5 PRIMARY DATA COLLECTION ................................................................................................................... 2 2 LANDSCAPE ASSESSMENT ................................................................................................................ 7 2.1 STATE OF THE MALAGASY ECONOMY ........................................................................................................ 7 2.2 ENERGY REGULATORY ENVIRONMENT ....................................................................................................... 7 2.2.1 Background .............................................................................................................................. 7 2.2.2 Key Players ............................................................................................................................... 8 2.2.3 Key Issues Related to Scaling Stand-Alone Solar ...................................................................... 8 2.3 DONOR & NGO PROGRAMMES ............................................................................................................ 10 2.3.1 Key Programs and Donors ...................................................................................................... 10 2.3.2 Key lessons & recommendations from current donor activities relevant for LEAD ................ 13 3 DEMAND ASSESSMENT .................................................................................................................. 14 3.4. HOUSEHOLD FINANCIAL SITUATIONS ...................................................................................................... 14 3.4.1. Low Household Incomes and Purchasing Power .................................................................... 14 3.4.2. Financial Inclusion .................................................................................................................. 15 3.5. MADAGASCAR’S LOW ELECTRIFICATION RATE .......................................................................................... 16 3.5.1. Energy for Lighting ................................................................................................................. 17 3.5.2. Energy for Communications ................................................................................................... 18 3.5.3. Current Solar Use ................................................................................................................... 19 3.5.4. Current Energy Expenditures .................................................................................................. 19 3.5.5. Willingness & Ability to Pay for Solar Energy ........................................................................... 2 3.5.6. Market Segments and Estimated Market Size ......................................................................... 3 3.6. SMES: ENERGY FOR PRODUCTIVE USE ...................................................................................................... 6 3.6.1. Context: Madagascar’s SMEs ................................................................................................... 6 3.6.2. Lack of Safe Access to Electricity as the Main Barrier for SME Development .......................... 7 3.6.3. Income and Expenditures ......................................................................................................... 7 3.6.4. Willingness to Pay .................................................................................................................... 8 3.6.5. Potential for Productive Uses of Power .................................................................................... 8 3.7. POWER NEEDS OF PUBLIC INSTITUTIONS ................................................................................................... 9 3.7.1. Administrative Buildings ........................................................................................................ 10 3.7.2. Street Lighting ........................................................................................................................ 11 3.7.3. Schools ................................................................................................................................... 12 3.7.4. Health Centres ....................................................................................................................... 14 3.7.5. Summary of Recommendations ............................................................................................. 16 4 FINANCIAL LANDSCAPE .................................................................................................................. 19 4.1 FINANCIAL SECTOR AND KEY PLAYERS ..................................................................................................... 19 4.2 FINANCIAL SECTOR AS A CHANNEL FOR ACCELERATING ACCESS TO ENERGY .................................................... 21 4.2.1 Financial Sector Activity in Renewable Energy ....................................................................... 22 4.2.2 Risk Sharing Facilities and Credit Lines .................................................................................. 24 4.2.3 Channels for Outreach and Accelerating Access to Solar ....................................................... 24 4.2.4 Mobile Banking ...................................................................................................................... 25 4.2.5 PAYG opportunities ................................................................................................................ 25 Enclude BV Final Report - Off-Grid Solar Market Assessment, Madagascar Table of Contents 4. SUPPLY ASSESSMENT ..................................................................................................................... 27 4.1. SOLAR SUPPLIERS ................................................................................................................................ 27 4.2.6 Key Suppliers and Models ...................................................................................................... 27 4.2.7 Opportunities and Barriers ..................................................................................................... 31 4.2. FINANCING NEEDS FOR GROWTH ........................................................................................................... 33 5. INTERVENTION DESIGN .................................................................................................................. 36 5.1. FRAMEWORK FOR INTERVENTION ANALYSIS ............................................................................................. 36 5.2. ESTIMATED FUNDING SIZE & NEEDS ....................................................................................................... 38 5.2.1. Market Size Summary ............................................................................................................ 38 5.2.2. Funding structure and Intervention areas .............................................................................. 39 5.3. SELECTED INTERVENTION AREAS ...........................................................................................................