CALL FOR EXPRESSION OF INTEREST: CONCEPT NOTES FOR PILOT MINI GRID OPERATORS
1.0 Introduction
The Government of Malawi, through the United Nations Development Programme (UNDP), acquired
funding from the Global Environment Facility (GEF) to increase access to clean and affordable
decentralised energy systems in selected vulnerable areas of Malawi.
The Department of Energy would therefore like to apply part of these funds to support Mini-Grid
Operators to replicate a sustainable Business Model for deployment of a Decentralised Energy Mini
Grid System.
2.0 Background
Malawi is one of the least electrified countries in the SADC region, with an average per capita
consumption of 85 kWh per annum – among the lowest in the world. Provision of sufficient, reliable
and clean energy in Malawi is a critical challenge, as recognized by the Government. The Government
of Malawi has put energy as a focus area in both the Malawi Growth and Development Strategy II
(MDGS 2011 - 2016) and the Economic Recovery Plan (2012). The demand for electricity, by far, exceeds
the installed capacity and new generation capacity is urgently needed, with the Government focused
on promoting diversified sources and utilization of the country’s abundant renewable energy resources
– particularly micro-hydro and solar. Under the Sustainable Energy for All (SE4All) initiative, the
Government has committed to ambitious 2015-2030 targets for increasing energy access and
renewable energy supply.
According to the SE4All 2015 global tracking framework, the growth rate of electricity access in Malawi
is estimated at negative three (3) per cent against a global growth rate of 0.6 per cent. There is,
therefore, a clear unmet need to respond to effective demand. Off-grid provision of electricity is one
of the key strategies for increasing access to electricity, particularly in rural areas.
To increase access, effort is needed to develop power plants and mini-grids close to the end-users in
rural areas. Since financial resources are scarce, investments for new generation can only be leveraged
by involving the private sector and social enterprises. Given the more remote locations of many of the
communities that need to be served, and the cost reductions in renewable energy technologies, an
important vehicle for meeting these targets will be clean energy mini-grids.
This GEF-supported project addresses rural electrification barriers in rural Malawi where 96% of people
do not have access to electricity. The project will scale up and strengthen Malawi’s first mini-grid,
independent vertically-integrated energy company operated as a social enterprise; provide microcapital grants and pilot innovative service arrangements for clean energy mini-grids; build capacity on
mini-grids and rural electrification at the sub-national and national levels; develop an information
clearing house on clean energy mini-grids for project developers; and recommend ways to mainstream
mini-grids into national rural electrification financing platforms and energy regulatory frameworks.
It is expected that the project will set the stage for mini-grids to play a key role in electrifying rural areas
of Malawi, thereby assisting the country in meeting its SE4All targets.
3.0 Pilot Mini-Grid Competition
Component 2 of the GEF-supported project aims at providing support to up to two mini-grid operators
to establish mini-grids operating on a Build Own and Operate (BOO) Model in selected rural areas in
Malawi where grid extension is unlikely to reach in the next 5 years.
Two successful applicants will each be awarded US$250,000, of which US$150,000 will be a matching
grant for procurement of equipment and US$100,000 will be contractual services support to the minigrid operator over a period of 3 years.
Private sector entities shall access the grant through either cost reimbursements or materials to be
procured on their behalf by UNDP. The awarding authority might choose to award to only one
successful operator an amount not exceeding US$500,000 based on compelling Concept Notes.
The funding will promote sustainable off-grid solutions to Malawi, benefiting particularly women, men,
girls and boys who live in rural areas. The project will therefore support interventions proposed from
two organizations, singularly or in association/consortium for the design and installation of renewable
energy powered (’green’) mini-grids to catalyse productive use, business development, improvedquality social services and household energy needs for communities without greed access. Grant funds
would be used to cover costs associated with detailed feasibility studies, Engineering Designs,
Procurement and Construction (EPC), environmental studies, including engaging consultants and/or
contractors, commissioning and testing of the mini-grid scheme.
4.0 Eligibility Requirements
Those applying for the Mini Grid Competition should meet the following criteria:
i.
Should be a private company or NGO or research institution duly registered by the laws of
Malawi;
ii.
In the case of Joint Ventures or Associations, they should be registered entities;
iii.
Should provide an organisational profile;
iv.
Size of proposed scheme should be in excess of 40KW;
v.
Number of beneficiaries should be in excess of 100 households;
vi.
Should have already identified a Location and secured Community, VDC, ADC and DEC
commitment to the Project;
vii.
The proposed mini-grid should be located in an unserved community by the utility grid and in
an area that is not scheduled to be connected to the grid within the next 5 years;
viii.
The firm or staff should have track record in either Renewable Energy Technology Installations
or Community Business Management or Productive Use experience;
ix.
The proponents should already have a renewable energy resource assessment for the site, prefeasibility assessment report, business model and tariff proposals.
5.0 Documentation required for the Expression of Interest
Applications for this call for Expressions of Interest should contain the following documentation to
demonstrate eligibility and soundness of the Project Concept:
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Registration certificate;
Organisational profile;
Organisational staff structure;
Evidence of experience in similar projects;
Proposed location of mini grid;
Brief description of proposed mini-grid project
o Renewable energy resource assessment
o Number of anticipated new household connections
o Productive end use
o Scale up strategy
Financial capacity, viability of the project (including audited accounts if available).
How to Apply
Expressions of Interest should be prepared in English and submitted by email to
[email protected] on or before 31st August 2016 17:00Hrs