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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