ABOUT ZERCABOUT ZERC

• Statutory body established in terms of the Electricity Act (Chapter 13:19) of 2002 and as amended in 2003.

• The Act Unbundled the vertically integrated ZESA into separate entities engaged in generation, transmission, and distribution and supply

• Financed from levies and license fees.• First Commission appointed in 2005. • Currently being transformed to an energy

regulator, with oversight functions for all energy sources as opposed to electricity regulation

a) create, promote and preserve efficient electricity services industry and market structures to ensure the optimal utilization of resources – MARKET TRANSFORMATION

b) maximize ACCESS TO ELECTRICITY SERVICES in both rural and urban areas

c) ensure security of supplies to all consumers of electricity – ADEQUACY AND SUSTAINABILITY

d) ensure cost reflective tariffs and fair returns to licensees – SUSTAINABILTY, AFFORDABILITY

e) ensure a safe, secure, reliable and high quality and least cost electricity service to consumers – QUALITY ASSURANCE

f) to ensure fairness to all players in the electricity Supply Industry – NON DISCRIMINATION

OBJECTIVESOBJECTIVES

a) promote and implement competition and private sector participation, when and where feasible;

b) establish or approve appropriate operating codes, grid codes and safety, security, reliability and quality standards;

c) establish appropriate consumer rights and obligations regarding the provision and use of electricity services;

d) license and regulate persons engaged in the generation, transmission, distribution and supply of electricity;

e) aid and advise stakeholders in the electricity sector in matters related to the generation, transmission, distribution and supply of electricity;

f) advise consumers regarding the efficient use of electricity;

FUNCTIONSFUNCTIONS

MILLENIUM DEVELOPMENT GOALS Eradication of extreme poverty and

hunger Achievement of universal primary

education Promotion of gender equality and

empowerment of women Reduction of child mortality Improvement of maternal health Combating HIV/AIDS malaria and other

diseases Ensuring environmental sustainability

MDG’s IN SUMMARY

The MDG’s Commit the international community to an expanded vision of development, one that vigorously promotes human development as the key to sustaining social and economic progress in all countries, and recognizes the importance of creating a global partnership for development.

MILLENIUM DEVELOPMENT GOALS

Aspirational targets in 18 important areas with 48 indicators to monitor progress to 2015

Better access to energy is not a specific goal within the MDGs but there are indicators that refer to energy and energy runs through many of the targets

Role of energy servicesRole of energy services

• Energy is not about bringing in the power grid

• People don’t want energy per se but the range of services it provides

• Benefits deriving from energy services include:

Contributing to increased production and reducing muscle energy, increase mobility

Contribution to health and human capital - pumping water or provision of lighting to health facilities and schools

Security - via street lighting, back-up energy supplies, or pumped water reducing risks from drought

Without modern Without modern energy services:energy services:

• Poor people spend long periods looking for alternatives (dung, fuel wood)

• Alternatives are expensive• High amounts of income is spent on

alternatives• Processing of goods takes time, is expensive

and goods are sub-standard• Exposure to diseases (internal and external

pollution) – energy related health problems• Not sustainable – land degradation, climate

change• Can lead to school drop outs

How do modern energy services How do modern energy services assist in achievement of MDG’sassist in achievement of MDG’sMDG Goal MDG’s linkage with modern energy

services

1 Eradication of extreme poverty and hunger

Mechanization due to access to modern energy services leads to higher productivity and improved household incomes, it saves time, increases output and value addition. Improved skills. Improvement in land use. Income

sources diversification. 2 Achieve

universal primary

education

Access to modern fuels and technology frees up time for education, facilitating teaching and learning. E.g. children can read during the night. Science can be

taught in rural schools.

How do modern energy services How do modern energy services assist in achievement of MDG’s assist in achievement of MDG’s (Cont’d)(Cont’d)

3 Promotion of gender equality and women empowerment

Instead of spending time fetching fuel wood girls go to school, women are empowered through income generating projects

4, 5 & 6 Reduce child and maternal mortality and reduce disease

Modern fuels enable improvement in health through access to clean water, cleaner cooking fuels, less laborious means of preparing food, boiling water, better agricultural yields through mechanization – more food. Refrigeration of vaccines, sterilization of equipment, safe lighting, negligible internal pollution – less

smoke related diseases.

How do modern energy services How do modern energy services assist in achievement of MDG’s assist in achievement of MDG’s (Cont’d)(Cont’d)

7 Ensure environmental

sustainability

Modern energy sources mitigate negative environmental impacts locally, regionally and

internationally

Challenges in increasing Challenges in increasing access to modern energy access to modern energy sourcessources• High costs of acquiring and installation• Lack of integrated energy planning• Low national prioritization and financial

constraints• Weak institutional and policy framework –

gvt, regulatory, utilities, escos• Lack of consultation and involvement of

beneficiaries• Lack of conducive environment and

incentives for investors

Zimbabwean Zimbabwean experience - Rural experience - Rural electrification in electrification in ZimbabweZimbabwe

• Provision through Rural Electrification Agency (REA)

• An independent statutory body formed through an Act of Parliament

• Has own management structures and Board

• Receives funding from a 5% rural electrification levy

• Direct contributions from government and other partners

Target of the rural Target of the rural electrificationelectrification

• rural schools• rural clinics and hospitals• rural service centres• resettlement schemes• government extension centres and

offices• community development projects –

irrigation, and other self help rural projects

Financing packagesFinancing packages

• Capital subsidy• Full cost recovery scheme• End use infrastructure scheme – ZESA

acquires capital equipment for income generation – food processing, sawmills, oil processing, irrigation schemes etc.

• Other players such as Practical Action, GTZ, GEF have complemented REA’s efforts

ChallengesChallenges in expanding in expanding rural electrificationrural electrification

• Inadequate financing – RE levy not enough

• Low Government budget support• Stop and start approach• Non-systematic implementation (At

times political considerations take precedence)

• Little funding for end-use infrastructure finance scheme

• Little emphasis on non-grid systems

What Regulators can do – What Regulators can do – MARKET TRANSFORMATIONMARKET TRANSFORMATION

• Ensure transformational change to reverse inequalities where priority is given to large state owned institutions in energy supplies

Creation of smart partnerships between large energy suppliers and small user/supplier

Inclusion of marginalized voices in decision making Creating sustainability and commitment to share and

protect resources through transparency and accountability

Creation of a policy environment supportive of entrepreneurship and private sector development in provision of energy services - RESCOS

Decentralization of Rural energy development to put rural people at the heart of planning and implementation

What Regulators can do – What Regulators can do – IMPROVED ACCESS IMPROVED ACCESS

• Provide large menu of rural energy options depending on desired end use

• Focus on ‘application’ not ‘technology’ • Aware of user’s ‘capacity’ and ‘willingness’ to pay • Build-up long-term relationships with end-users • Inclusion of end-use investments, particularly to

encourage pro-poor productive uses• To lower the initial costs (technical advice, capital

investment) rather than lowering the operating costs

• Capacity building for locals – planning and implementation

What Regulators can do – What Regulators can do – IMPROVED AFFORDABILTY IMPROVED AFFORDABILTY

• Link to income generating activities• Create flexible and responsive tariffs • Take consideration of user’s capacity and

willingness to pay • Energy service must identify with community

specifics• Use local labour and materials• Consider smart subsidies

Lower initial costs - connection Targeted subsidies to deserving groups