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dam-l Solar homes initiative in SA/LS
from Clean Energy Finance: March-April 1999
Winrock International
1611 North Kent Street, Suite 600
Arlington, VA 22209-2134
Telephone (703) 525-9430
Fax: (703) 243-1175
E-mail: fellis@winrock.org
Eskom-Shell Taking First Step Toward 50,000 Solar Homes
By Caspar Henderson
willingness to be involved in all aspects of the value
chain, from component manufacture to local service
support. Other manufacturers of PV cells were not
prepared to do more than supply the cells, said the
spokesman.
Shellís decision to enter this tricky business came as a
result of a market analysis performed when
renewables were being established in October 1997 as
the Groupís fifth core business (in addition to
exploration & production, gas & power, chemicals, and
oil products). In addition to solar, Shell Renewables is
developing businesses in biomass and forestry. It is
also investigating wind power technology.
The 50 Wp solar home systems, designed by Shell
Renewables and Conlog (Pty) Ltd, will deliver an
average of 200 watts electricity for four hours a dayó
or enough for about four electric lights, a TV, and a
radio. For this customers will pay an installation fee
equivalent to US $30 and monthly payments of $8
through a prepayment system using a magnetic card
that they can recharge every month. There will also
be an option to own, although Shell, in contrast to
some South African non-governmental organizations,
predicts demand for this to be slight. Anti-tamper
devices will render the systems useless if they are
taken apart or stolen.
Eskom-Shell Solar is currently establishing a local
infrastructure through which solar systems will be
marketed, installed, and serviced. The intention is to
employ as locally as possible and it is envisaged that
approximately 100 jobs will be created to service the
first 6,000 systems in the first six to eight months. The
infrastructure will be a combination of franchised and
local outlets, and the terms of employment will depend
on how these businesses are run by their owners.
ìOur joint venture company will keep close to the
market to ensure that customers understand fully
how the systems work and what sort of financial
commitment they are taking on,' says van de Ven.
The joint venture will be responsible for the finance,
accounting, and training on installation,
maintenance, and marketing. Local, community-
owned and operated companies will manage
marketing, installation, and maintenance on a day-to-
Corporation (IFC) loans, paying the additional
costs needed to reduce carbon emissions.
Assuming the board approves the new version,
capital solicitation will begin in July. An
ambitious early version of the Fund had difficulty
attracting private investors because it was focused
on Eastern Europe. It has now been scaled back
to a relatively modest $100-120 million over two
solicitations, and will be balanced between
Eastern Europe and Clean Development
Mechanism (CDM) countries. The funds would be
disbursed through 2013, meaning an average
annual disbursement of about $8.5 million,
assuming the Fund is fully capitalized. It will be
looking for investments costing well over $15 per
ton of carbon emissions reduced, although neither
exact target costs nor methods for calculating
them have been finalized. So far, 15 potential
investors in the Fund have signed memoranda of
understanding. These include British Petroleum,
Mitsubishi Corporation, Naturkraft
(Switzerland), Elkraft (Denmark), and Vattenfall
(Sweden). The World Bank will not be helping
capitalize the fund, although it has spent roughly
$3 million during the setup.
Contact Shell Renewables in the U.K. at +44 (171) 934 3231;
information on the South Africa venture is available at http://
www.shell.com/about/content/0,1369,1503-3078,00.html
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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