Component 2 will address the problem of weak institutional and financial mechanisms in the analysis, planning and implementation of electricity infrastructure projects and RE-based electricity production in the off-grid areas. The agencies involved still need the knowledge and tools as well as coordinating mechanisms and institutional arrangements in integrating the numerous stand-alone, fragmented and uncoordinated initiatives in the off-grid areas to implement electricity access projects and ensure proper designs, installation and operation of the RE-based systems. The institutions involved led by MMERE and MECDM will be strengthened in planning, monitoring, evaluation, reporting, data processing and management to support the implementation of the national energy policy and rules and regulations which were formulated and adopted in Component 1. The mechanisms to meet the financial requirements of these systems shall be established through various sources consisting of government community service obligation funding on grid extensions, foreign-assisted projects, private sector participation, bank financing, etc. The experiences gathered in the institutional and financial mechanisms in this Component will feed into the refinements of the policies, regulations and targets set by the Government’s integrated plan and implementing guidelines in Component 1 for rural electrification and RE-based energy production in the off-grid areas as guided by the periodic reviews.
Outcome 2: Enforced improved institutional and financial mechanisms in the integrated planning and implementation of rural electrification and RE-based energy production in the off-grid areas
The following are the expected Outputs that will collectively realize Outcome 2 and bring about the enforcement of approved policies and rules and regulations. The table below summarizes the Activities that will be carried out under Component 2 to produce the expected Outputs that will collectively bring about Outcome 2.
| Output | Activities |
|---|---|
| 2.1: Evaluation report on the current institutional arrangements for the financing and implementation of the rural electrification program of the country. [Gen1] | 2.1.1: Evaluation of existing institutional arrangements for financing and implementation of the rural electrification projects in the country with recommendations of institutional and financial mechanisms that best fit for purpose and context of the proposed site demonstrations 2.1.2: Documentation of the existing institutional and financing mechanism arrangements that have the potential to support rural electrification in the Solomon Islands 2.1.3: Establishment of institutional and operational frameworks to support national energy development, planning and implementation |
| 2.2 Formulated and recommended institutional and financing mechanisms that support the enhanced implementation of the rural electrification program [Gen2] | 2.2.1 Formulation and introduction of recommended institutional and financing mechanisms to owners or administrators to be hosts of the selected demonstration sites. 2.2.2: Negotiation and development of agreements, understanding and consent from partners and communities on the institutional and financing mechanisms, including a fee collecting system 2.2.3: Establishment of the recommended and institutional and financing mechanism that will best fit the demonstration sites 2.2.4: Design and implementation of a pilot program for micro-financing of solar PV powered appliances and devices to accelerate energy access in rural off-grid areas. |
| 2.3: Completed rural electrification initiatives facilitated by the adopted and enforced institutional and financial mechanisms [Gen2] | 2.3.1: Facilitation and operation of the enhanced institutional and financial mechanisms including gender mainstreaming towards increased available sustainable funding for RE in rural demonstration sites 2.3.2: Development of progress and lessons learned reports on enforced institutional and financial mechanisms for dissemination to stakeholders and financial institutions |
| 2.4: Completed evaluation report on the adopted institutional and financing mechanisms, including suggested policies and strategies for sustaining and/or enhancing the rural electrification program’s institutional and financing mechanisms. [Gen2] | 2.4.1: Assessment of the effectiveness of the enhanced institutional and financing mechanisms and provide suggested policies and strategies for further enhancing 2.4.2: Further enhancement of the institutional and financing mechanism on the operational side such as including sharing lessons with other schools and communities and development of a guidebook |
Output 2.1: Evaluation report on the current institutional arrangements for the financing and implementation of the rural electrification program of the country [Gen2]
Activity 2.1.1: Evaluation of existing institutional arrangements for financing and implementation of the rural electrification projects in the country with recommendations of institutional and financial mechanisms that best fit for purpose and context of the proposed site demonstrations. This includes the evaluation of proposed project sites, e.g. Hunanawa Community water supply financing model, education grant system model and current school financing system that are in operation as well as other RESCOs or sinking funds (for example the Selwyn College fee collection system) operating in the country.
Activity 2.1.2: Documentation of the existing institutional and financing mechanism arrangements that have the potential to support rural electrification in the Solomon Islands. This activity involves the documentation of the institutional and financing mechanisms for proposed electrification demonstration projects, such as in Waimapuru NSS, Pamua NSS and Hunanawa Community, will be produced and printed for the project communities and schools. This may involve the engagement of private sector (Solomon Power and others) to support the fee collection in communities and schools.
Activity 2.1.3: Establishment of institutional and operational frameworks to support national energy development, planning and implementation. This activity involves the integration of the concepts in the planning and implementation of the rural RE-based demonstration projects in the institutional and financial aspects towards building up the national level of energy development, planning and implementation. Based on the principles and policies adopted in the National Energy Policy developed in Component 1, the practical experiences in the demo projects and other baseline projects and the working models of institutional and financial frameworks in other similarly-situated countries, the National Energy Development, Planning and Implementation for the Solomon Islands (that integrates rural electrification in the national context) will be formulated and adopted within the timeframe of the project to guide the medium- and long-term energy development plan for the country as post-project follow-up and sustainability plan. This will include practical institutional and financial mechanisms to be adopted to support the rural electrification program including EE technology application in a sustainable manner to attain the economic and environmental goals of the country.
This will be prepared and endorsed by the Project Board to MMERE for its review, adoption and implementation of the execution phase of the national framework. Consultation meetings and workshops, involving participation of all stakeholders and targeted beneficiaries through an expert and strategic planning facilitator will be organized to develop the comprehensive plan.
GEF support is required for the incremental technical and financial assistance in the conduct of the evaluation of existing or current institutional arrangements and producing the evaluation report at the project level and development of national level institutional and operational framework and organizational structure.
Output 2.2: Formulated and recommended institutional and financing mechanisms that support the enhanced implementation of the rural electrification program [Gen2]
Activity 2.2.1: Formulation and introduction of recommended institutional and financing mechanism to owners or administrators to be host of the selected demonstration sites. This involves the enhancement of awareness/knowledge and introduction of applicable community and school financing models and improving the understanding of owners or administrators of institutions to be hosts of the demos on how to operate these systems, the required resources, contributions from the rural-based institutions etc. As basis for the recommendation, an analysis of macro- and micro-level economic and social benefits of applicable RE-based electrification projects will be conducted. The analysis will evaluate social and economic returns of the different proposed RE-based rural electrification options, linkages to climate change initiatives and potential for scaling-up. Appropriate institutional and financing mechanisms, including practices in other PICs, RESCO operation, sinking funds, etc. will be assessed. Based on the assessment results, appropriate institutional and financing mechanisms will be formulated and introduced to owners and administrators of the institutions or schools to be hosts of the selected demonstration sites, ensuring that current financing models are enhanced and there is significant understanding, ownership and buy-in in the enhanced models.
Activity 2.2.2: Negotiation and development of agreements, understanding and consent from partners and communities on the institutional and financing mechanisms, including a fee collecting system. This activity involves the formulation of the institutional and financing mechanisms through consultations with owners, leaders and constituents at the village or institution level regarding be arrangement that will best suit their needs and applications. The output of this activity is a set of terms of reference of the agreed institutional and financial arrangements and details of the operation, management, maintenance, investment or financing plan, fee collection system and basic commitment to ensuring sustainability and participation of all members, including involvement of women in all possible areas, that will be beneficial for the community or institution.
Activity 2.2.3: Establishment of the recommended institutional and financing mechanism. This involves the design, implementation and establishment of the institutional and financial mechanisms that will facilitate the enhancement of current financing systems that are already in place in the communities and schools in the off-grid and rural areas of the country. For example, integrating fee collection system for energy services into the current system for water supply fees, and establishing RESCOs for electricity services fee collection system in schools, etc. These will be done through the development and selection of appropriate mechanisms adopted to rural electrification and institutionalizing the mechanisms through a special order from the MMERE to establish and implement the approved mechanisms and providing the necessary administrative and other support services to ensure the sustainability of said mechanisms.
Activity 2.2.4: Design and implementation of a pilot program for micro-financing of solar PV powered appliances and devices to accelerate energy access in rural off-grid areas. There are many women and community groups in the country that have been successful in the implementation of a monetary savings program for their members. Some of them have established and managed loan programs for members in acquiring Solar PV home systems, solar PV refrigerators, freezers, pumps, etc. that prove to be very good devices to support socio-economic activities and income generation at the household level. This activity involves the designing and implementation of a pilot program on micro-financing of solar PV powered appliances/devices that builds upon these financing initiatives by enhancing these existing successful financing programs to fund energy access projects in the off-grid rural areas of the country. By integrating these worthwhile practices, determining areas of improvement, conducting the necessary capacity building and opening access to sources of funds have been considered the way to go in increasing the impact and broaden the reach of microfinance assistance for Solar PV home systems, solar PV refrigerators and Freezers[1]. WARA and SIWIBA are examples of women’s groups in this category.
GEF support is required for the incremental technical and financial assistance in the conduct of the institutional and financing models, meetings to negotiate the agreements support for transportation, meeting expenses and consultations.
Output 2.3: Completed rural electrification initiatives facilitated by the adopted and enforced institutional and financial mechanisms [Gen2]
Activity 2.3.1: Facilitation and operation of the enhanced institutional and financial mechanisms including gender mainstreaming towards increased available sustainable funding for RE in rural demonstration sites. This includes the operationalization of the proposed enhanced mechanisms, such as the Hunanawa water and energy fee collection system and the applicable RESCO electricity fee collection system in schools towards increased available sustainable funding. For sustainability, established fee collection systems should sustain the RE technologies beyond the SPIRES project life. The mechanisms that will be adopted shall be based on the promotion of gender-balanced participation and decision-making responsibilities of identified groups such as Community Utilities Committees (CUCs) that are organized in some off-grid areas.
Activity 2.3.2: Development of progress and lessons learned reports on enforced institutional and financial mechanisms for dissemination to stakeholders and financial institutions. This activity involves the documentation of the progress of implementation of the demonstration and pilot activities of the SPIRES Project, particularly on the experiences in the application of the adopted institutional and financial mechanisms. The reported experiences gained, and lessons learned will be evaluated and recommendations for either sustaining or improving such mechanisms will be formulated. This also involves providing access and including female-headed households and other vulnerable groups such people living below the poverty line in project conversations and ensuring that they have equal participation and receipt of information from project discussions.
GEF support is required for the incremental technical and financial assistance in the conduct of the operational of the completed institutional and financing mechanism up to the completion of the project and preparation of monitoring and lessons learned reports.
Output 2.4: Completed evaluation report on the adopted institutional and financing mechanisms, including suggested policies and strategies for sustaining and/or enhancing further the rural electrification program’s institutional and financing mechanisms. [Gen2]
Activity 2.4.1: Assessment of the effectiveness of the enhanced institutional and financing mechanisms and provide suggested policies and strategies for further enhancing. This entails the assessment of how successful or how relevant or appropriate the established and implemented institutional and financing mechanisms, evaluating possibilities of what went right and what went wrong. Further to the reports made at the demonstration level provided in Output 2.3, this activity will be involved in integrating all the reports from the demos, evaluate their effectiveness and impact in meeting the projects objectives. The activity will develop recommendations for further enhancing the institutional and financial mechanisms in the light of the lessons learned and recommendations for the benefit of the overall development of the institutional and financing support for the RE-based rural electrification program.
Activity 2.4.2: Further enhancement of the institutional and financing mechanism on the operational side such as sharing lessons with other schools and communities and development of a guidebook. This involves the improvement of existing relevant funds/financing mechanisms that will be applied in the demonstration activities to promote rural electrification while looking at other parallel projects and initiatives that have tried institutional and financing mechanisms such as RESCOs or Sinking Funds to consolidate relevant experiences. Selwyn College may have also implemented a RESCO and sinking funding system for energy fee collection for sustainable repair and maintenance of the RE systems and upscaling to improved private sector engagement such as Solomon Power or other RE private companies for improved engagement in fee collection system. To further enhance the mechanisms, detailed guidance notes for the conduct of training in Gender Equality Social Inclusion (GESI), good governance and simple management, monitoring, record keeping and reporting for community-based RESCO members from a gender mainstreaming perspective, to be conducted in relevant capacity building activities in Component 4. The results of the assessments and proposed enhancements will be consolidated into a guidebook to provide guidance on the future use of the institutional and financing mechanisms that could be applicable to other proposed rural electrification areas.
GEF support is required for the incremental technical and financial assistance in the conduct of the operational of further enhancements on the institutional and financing mechanism and preparation of the guidebook.
[1] This will be linked to sources of funding (such as UNCDF’s “You Save” and UNDP micro-financing (Low Value Grants) and customer groups to increase the impacts and accelerate the access to energy and make services and devices more effective and sustainable.