Business Development Assistance for Rural …

1 <Note: the TOR is for consultant services to develop Business opportunities arising from both the project investments in Rural electrification and the improved environment brought about by the availability of electricity supply in the subject areas>. Business Development Assistance for Rural electrification Project Terms of Reference Background <Brief description of objectives and scope of Bank project. >. The first phase would have four investment components: Main grid. Private sector distribution concessions will be facilitated and encouraged, with bulk supply from the utility, third party generators, or self-generators;. Isolated grid systems, which would be private sector led, for relatively concentrated areas with a potential for productive uses.

2 Individual/institutional solar photovoltaic (PV) systems, which would also be private sector led, for relatively dispersed areas; and Renewable energy power generation by the private sector, for sale to the main grid and for mini-grids. On the supply side, the key businesses opportunities during Phase I are expected to be: Development and operation of mini-grids serving Rural trading centers;. Development and operation of existing isolated grids, also most likely by private public sector partnerships, which would be spun off by the Uganda Electricity Board;. Co-generation investments based on independent major agro-processing centers, such as tea and sugar estates, and other relatively large scale suppliers, such as some mission hospitals, Development and operation of distribution networks in communities close to the relatively large scale independent suppliers, Generation, transmission and distribution operations in new areas based on renewable resources, Solar photovoltaic systems distribution and sales to dispersed Rural households and communities and to institutional markets for health centers and other specialized applications.

3 Local private and community partnerships are expected to be a main organizing principle for service delivery in most locations. For instance, the investments in mini-grids serving Rural trading centers may have community ownership of the poles and wires of the distribution network and small enterprise ownership of the generation capacity. The largest number of Business opportunities will be those for increased employment, income and profits by Rural micro enterprises through the increased productive uses of modern energy in heretofore underserved Rural areas. In terms of participants and transactions, the largest number of Business opportunities created may be those in related services, including those for microfinance organizations in funding purchases of productive equipment, additional working capital and other requirements by micro enterprises and, possibly, purchases of solar PV systems by Rural households.

4 There will also be opportunities for local NGOs and local consultants advising micro and small enterprises on productive uses applications and assisting the private public partnerships to organize network Development and service delivery. The largest cost investments are expected to those for selected renewable energy generation and co-generation investments. There will be additional Business opportunities on the supply side in distribution concession areas linked to the grid during Phase II. The capacities to respond to these new opportunities would be established during Phase I. There are few local businesses available now with the capacity to fully respond to these opportunities.

5 With the exception of solar PV sales and distribution, these are new Business areas. The solar PV market is at an early stage of Development , and the present companies operate at a very small scale. Objectives The consultants will provide Business Development and technical advisory services to catalyze Rural electrification Business opportunities and strengthen local capacities. The services will: remove information and awareness barriers among potential local private sector and community participants through workshops and other promotional activities;. remove human capacity barriers among potential service delivery participants by providing customized Business planning and best practices technology and implementation training and advice.

6 Remove consumer and community confidence barriers by advising on appropriate technology standards, certification and other consumer protection measures;. remove perceived market risk barriers by training and advising on firm-level market surveys and providing information on low cost certified equipment and delivery options, so as to increase affordability; and contribute to the removal of financing barriers by providing information and advice to financial institutions, including microfinance organizations, on vendor and consumer financing strategies for Rural energy services and developing Business plan and financial models which demonstrate the sustainability of the investments The services also will include promoting the opportunities to specific potential service providers and users, assisting to prepare a number of investments for start-up during Phase I, providing financial planning and management Assistance to enhance the sustainability of the investments.

7 Designing a productive uses enhancement program to be conducted during Phase I including where appropriate in commercial traditional fuel usage, and assessing the capacity building necessary to be conducted during Phase I in preparation for Phase II. These upstream capacity building and pipeline Development activities are critical to the removal of barriers to implementation and to ensuring that Phase I of the Project is a success. Scope of work There are two sets of consulting services required. One set comprises Packages A G, focused on the different types of Business opportunities in terms of supply modalities and other characteristics.

8 The second set is a unified group of services for the overall promotion of the program and the coordination and support of the Business Development efforts. The consultants in conducting their activities would build on existing organizations, institutions, programs, and entrepreneurial capabilities while working to promote the emergence of new capabilities. Consulting services for capacity building for the different service delivery models The types of tasks for developing local capacities and the initial pipeline are similar across the full range of service delivery Business models. However, they will vary tremendously with the different scale, supply modality and other characteristics of the investments, and it is expected that different consultants may be responsible for achieving the targets for different Business models, for example the consultants assisting to develop the capacities for a renewable energy co-generation investment most likely will not be the same as those assisting with the Development of Business capabilities for the solar PV.

9 Market segment. The types of specific tasks are: Capacity building and pipeline Development : 01. Promote Rural energy Business opportunities to stimulate the interest and inputs of local Business groups, associations, financial institutions, microfinance institutions, local governments, enterprise Development and energy related NGOs. 02. Provide information and feedback services on the Business opportunities to define in more detail for the potential service providers the scope of these Business opportunities 03. Develop and provide guidance and Assistance with customized financial models for micro-grid and solar PV businesses which can be used in developing Business financial projections and which will be acceptable to financing institutions and investors 04.

10 Collaborate with task groups working on regulatory framework Development and broader regional promotion activities 05. Provide human capacities Development Assistance (training, other) to groups of Business and community groups who are anticipating operating Rural energy services delivery businesses 06. Conduct consumer awareness and market promotion activities in areas in which specific Business are expected to be starting up 07. Facilitate linkages with international suppliers and funding sources 08. Promote Business opportunities to specific businesses (including the private . community partnerships), investors, financial institutions 09.