2. TO_720_674_19-F-00004_EAEP FY 2021 Annual Report v.2.pdf

DISCLAIMER

This report is made possible by the support of the American People through the United States Agency for International Development (USAID).

The contents of this report are the sole responsibility of RTI International and do not necessarily reflect the views of USAID or the United States Government. This report was prepared under Contract Number AID-720-674-18-D-00004 / AID-720-674-19-F-00004.

EAST AFRICA ENERGY PROGRAM – ANNUAL

PROGRESS REPORT

OCTOBER 1, 2020–SEPTEMBER 30, 2021

Submitted: November 1, 2021

Resubmitted December 23, 2021

East Africa Energy Program –FY 2021 Annual Progress Report | i

TABLE OF CONTENTS

List of Figures ............................................................................................................................. ii

List of Tables ............................................................................................................................. iii

Acronyms and Abbreviations ................................................................................................ iv

Executive Summary

EAEP Results Q4 and Annual FY 2021, by Objective

Objective 1: Optimized Power Supply Objective 2: Increased Grid-Based Power Connections Objective 3: Strengthened Utilities and Other Power Sector Entities Objective 4: Increased Regional Power Trade Cross-Cutting Activities

Country Progress: Ethiopia

Objective 1 Progress on Work Plan Activities: Ethiopia Objective 2 Progress on Work Plan Activities: Ethiopia Objective 3 Progress on Work Plan Activities: Ethiopia

Country Progress: Kenya

Objective 1 Progress on Work Plan Activities: Kenya Objective 2 Progress on Work Plan Activities: Kenya Objective 3 Progress on Work Plan Activities: Kenya

Country Progress: Rwanda

Objective 1 Progress on Work Plan Activities: Rwanda

Country Progress: Somalia and Somaliland

Objectives 1–4 Progress on Work Plan Activities: Somalia

Country Progress: Tanzania

Objective 1 Progress on Work Plan Activities: Tanzania Objective 2 Progress on Work Plan Activities: Tanzania

Country Progress: Uganda

Objectives 1–3Progress on Work Plan Activities: Uganda

Regional – Objective 1

REG 1.1.1 Support for Capacity Development of PPPs

Regional Power Trade

Regional Power Trade: Progress on Work Plan Activities

Other Country Progress

Burundi

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Democratic Republic of Congo Djibouti

Cross-Cutting Activities

Human and Institutional Performance Improvement Environment Community Engagement Gender Equity

PACO COORDINATION

Cross-Cutting Progress on Work Plan Activities

Program Management Unit

Operations Procurement Human Resources

Challenges and Risks

Annex A: Participant Training Report

Annex B: Summary of Performance Monitoring and Evaluation Tables

Annex C: Transactions That Reached Financial Close (FC) or That EAEP “Advanced” Toward Reaching FC During FY 2021

Annex D: Success Stories and Other Communications Products from Q1 FY

Annex E: Travel Updates, July–September 2021

Annex F: EAEP Staffing Plan FY 2021

Annex G: Training and Events July–September 2021

Annex H. Annual Progess on Environmental Mitigation and Monitoring

LIST OF FIGURES

Figure 1. EAEP selected activities from FY 2021

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LIST OF TABLES

Table 1. EAEP results across priority indicators Table 2. Status of EAEP-supported interconnection projects, Q4 FY 2021 Table 3. EAEP meetings and conferences, Q4 FY 2021 Table 4. Programmatic learning from the quarter Table 5. EAEP procurements in FY 2021 Table 6. EAEP recruitment and hiring in Q4 FY 2021

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ACRONYMS AND ABBREVIATIONS

AfDB African Development Bank Africa50 Africa50 Infrastructure Fund AGC Attorney General’s Chambers (Tanzania) ALSF African Legal Support Facility ATC&C aggregate technical, commercial, and collections (losses) ATI African Trade Insurance Agency BEC Berbera Electricity Company (Somalia) BI business intelligence C&I commercial and industrial CAIDI Customer Average Interruption Duration Index CCS Center for Climate Strategies, Inc.

CE Indicator code: community engagement CEO Chief Executive Officer CF cooperation framework CFM Climate Fund Managers CIG Consolidated Infrastructure Group Limited CLDP Commercial Law Development Program (of the US Department of Commerce) COD commercial operation date COM Indicator code: communications COVID-19 coronavirus disease 2019 (SARS-CoV-2) CP condition precedent CREC CR Energy Concepts, LLC DFC US International Development Finance Corporation DFID UK Department for International Development (subsumed into FCDO in 2020) DGE deemed generated energy DRC Democratic Republic of the Congo EAA Ethiopian Airline Academy EAEP East Africa Energy Program EAPP Eastern Africa Power Pool EARP Electricity Access Rollout Program (Rwanda) EASP Electricity Access Scale-Up Project ECP electricity connections policy EDCL Energy Development Corporation Ltd. (Rwanda) EDIMS Electronic Database and Information Management System EEA Ethiopian Energy Authority EEHC Egyptian Electricity Holding Company EEP Ethiopian Electric Power EEU Ethiopian Electric Utility EKT Ethiopia–Kenya–Tanzania

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EMA Energy Made in Africa (Burundi, energy developer) EMI Ethiopian Management Institute EMMP Environmental Management and Mitigation Plan EMTP electromagnetic transients program (software) ENEE Ente Nazionale Energia Electrica (Puntland, Somalia) ENV Indicator code: environment EPC engineering, procurement, and construction EPRA Energy and Petroleum Regulatory Authority (Kenya) ERA Electricity Regulatory Authority (Uganda) ERP enterprise resource planning (system) ESA Energy Storage Africa (Kenyan firm) ESIA environmental and social impact assessment ESMF Environmental and Social Management Framework ESMP Environment and Social Management Plan ESP electricity service provider ESRES Energy Security and Resource Efficiency in Somaliland ET Indicator code: Ethiopia EUCL Energy Utility Corporation Ltd. (Rwanda) EWiEn Ethiopian Women in Energy (network) EWT Endangered Wildlife Trust EWURA Energy and Water Utilities Regulatory Authority (Tanzania) FAT factory acceptance test FC financial close FCDO UK Foreign, Commonwealth & Development Office FUWAVITA Tanzania association for the deaf FY fiscal year GAEREL General Authority for Electricity and Renewable Energy of Libya GCHM grievance and complaints-handling mechanism GDC Geothermal Development Company GE General Electric GIS geographic information system GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Agency for

International Cooperation) GNDR Indicator code: Gender GOE Government of Ethiopia GOK Government of Kenya GOR Government of Rwanda GPS global positioning system GWDP Gridworks Development Partners HAI Horn of Africa Initiative HICD human and institutional capacity development

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HoA Horn of Africa HR human resources HVDC high-voltage direct-current (power transmission) IA interconnection agreement ICT information and communication technology IFC International Finance Corporation inCMS Kenya Power’s customer-service management system INEP Integrated National Energy Plan (Kenya) IP3 Institute for Public–Private Partnerships IPCA Institutional Performance Capacity Assessment IPIU EAEP’s institutional performance-improvement unit IPP independent power producer IRB independent regulatory board IT information technology IVA independent verification agent JICA Japan International Cooperation Agency KE Indicator code: Kenya KenGen Kenya Electricity Generating Company Ltd.

KETRACO Kenya Electricity Transmission Company Ltd.

KIL Kilembe Investments Ltd.

KIS Kalangala Infrastructure Services km kilometer KNEECS Kenya National Energy Efficiency and Conservation Strategy KPI key performance indicator KRECS Kyegegwa Rural Electricity Cooperative Society (Uganda) KSh Kenyan shilling kV kilovolt kW kilowatt kWh kilowatt hour LCPDP least-cost power-development plan LEAP low-emissions analysis platform (software) LOP life of program LPU large power user MAI Mercados–Aries International MEL monitoring, evaluation, and learning MEMWR Ministry of Energy, Minerals, and Water Resources (Puntland, Somalia) MEWR Ministry of Energy and Water Resources (Government of Somalia) MININFRA Ministry of Infrastructure (Rwanda) MO minimum output MOE Ministry of Energy MoENR Ministry of Energy and Natural Resources (Djibouti)

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MOF Ministry of Finance MoFP Ministry of Finance and Planning (Tanzania) MOU memorandum of understanding MoWIE Ministry of Water, Irrigation, and Energy (Ethiopia) MTB meter test bench MW megawatt N/A not applicable NARUC National Association of Regulatory Utility Commissioners (United States) NDP National Development Plan (Uganda) NECSOM National Energy Corporation of Somalia NELSAP Nile Equatorial Lakes Subsidiary Action Program NRECA International International arm of the US National Rural Electric Cooperative Association NRF Norton Rose Fulbright OHA organizational health assessment PA Indicator code: Power Africa PACO Power Africa Coordinator’s Office PATRP Power Africa Transactions and Reforms Program PATT Power Africa Tracking Tool PAUESA Power Africa Uganda Electricity Supply Accelerator PEDA Puntland Electricity Development Agency (Somalia) PESRM Power Africa Environmental and Social Review Methodology PMO project management office PMU Project Management Unit POWERHer network of Rwandan women energy engineers PPA power purchase agreement PPAA Public Procurement Appeals Authority (Tanzania) PPP public–private partnership PPPDG Public–Private Partnership Directorate General (Ethiopia) PRI political risk insurance PSS®E Power System Simulator for Engineering PSS®SINCAL Siemens proprietary simulation software for analysis and planning of electric and pipe networks PUE productive use of electricity PV photovoltaic PWiE Puntland Women in Energy (Somalia) Q quarter QPEA GT Quantum Power East Africa Geothermal Ltd.

QTAT qualified transaction assistance tool RAP resettlement action plan RE renewable energy REA–Tanzania Rural Energy Agency (Tanzania)

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REA–Uganda1 Rural Electrification Agency (Uganda) REG Rwanda Energy Group REGIDESO Régie de Production et de Distribution de l'Eau et de l'Electricité (national utility, Burundi) REPP Renewable Energy Performance Platform REREC Rural Electrification and Renewable Energy Corporation (Kenya) RFP request for proposals RIA regulatory impact assessment RISES Regional Integration for Sustainable Energy Supply (World Bank program, Horn of

Africa) RPD revenue-protection department RPT Indicator code: regional power trade RTI RTI International (registered trademark and trade name of Research Triangle Institute) RURA Rwanda Utilities Regulatory Authority RW Indicator code: Rwanda SAIDI System Average Interruption Duration Index SAP systemanalyse und programmentwicklung (system analysis and program development) SDDP stochastic dual dynamic programming SESRP Somali Electricity Sector Recovery Project (World Bank) SINELAC La Société Internationale d'Electricité des pays des Grands Lacs (International

Electricity Company of the Great Lakes Countries; DRC) SM Indicator code: Somalia SMART specific, measurable, achievable, realistic, and time-bound SNEL Société Nationale d’Électricité (DRC National Electricity Company) SOP standard operating procedure SP Studio Pietrangeli (subcontractor) SVC static VAR compensator T&D transmission and distribution TANESCO Tanzania Electric Supply Company Ltd.

TaWoED Tanzania Women in Energy Development (network) TCN Third-Country National TOCOR Task Order Contracting Officer’s Representative TOR terms of reference ToT training of trainers TPDC Tanzania Petroleum Development Corporation TWh terawatt hour TZ Indicator code: Tanzania UEAP Universal Electricity Access Program (EEU, Ethiopia) UEDCL Ugandan Energy Generation Company Ltd.

1 REA: The country names have been added after the standard abbreviation to help distinguish these two different entities.

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UETCL Uganda Electricity Transmission Company Ltd.

UG Indicator code: Uganda UK United Kingdom UPS uninterruptible power supply UREAP Uganda Rural Electricity Access Project (funded by AfDB) USAID United States Agency for International Development USB universal serial bus USG United States Government USTDA United States Trade and Development Agency WESCO Waamo Energy Service Company (Somalia) W-GDP US White House’s Women’s Global Development and Prosperity initiative

(community of practice) WiAP Women in African Power WIET Women in Energy, Tanzania WIRE Women in Rwandan Energy YALI Young African Leaders Initiative ZECO Zanzibar Electricity Corporation ZURA Zanzibar Utilities Regulatory Authority

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EXECUTIVE SUMMARY

The East Africa Energy Program (EAEP) is a four-year program funded by the United States Agency for International Development (USAID) and implemented by RTI International in partnership with several subcontractors. EAEP compiled this annual progress report to outline work undertaken throughout fiscal year (FY) 2021, from October 1, 2020, to September 30, 2021. EAEP aims to achieve the following four objectives in East Africa: (1) optimized power supply, (2) increased grid-based power connections,

(3) strengthened utilities and other power-sector entities, and (4) increased regional (cross-border) power trade. EAEP promotes gender equity, environmental mitigation and standards, and community engagement across all of its objectives. Further, EAEP’s commitment to institutional performance improvement includes a focus on proper measurement and participatory development of activities, which in turn fosters ownership, better coordination, and long-term sustainability, as envisioned by USAID’s concept of locally led development.

After nearly 18 months of living with the COVID-19 pandemic, the East Africa region is slowly recovering from its devastating effects. Many countries opened up their borders during 2021 to international travelers and saw improved economic activity and recovery. Closer to home, some EAEP staff were diagnosed with COVID-19, while some lost family members to the disease. The new reality is varying degrees of lockdown to curb any spikes in COVID-19 cases, while at the same time balancing health and financial concerns. Despite the restrictions imposed on EAEP, the staff members were resilient and found creative ways to deliver on the program’s mandate and drive the outstanding achievements during the year. EAEP managers also encouraged all staff to get vaccinated when vaccines became available in their countries.

EAEP continued to deliver excellent results in all areas. Despite various challenges—such as COVID-19, budget uncertainty, changing stakeholder priorities, and the Ethiopia closeout—EAEP continued all planned activities. The program used a combination of in-person and virtual solutions to deliver against its contract, despite the difficult circumstances. EAEP’s final-year motto is “BRING IT HOME.” The program planned its last year to be the highlight year for results and achievements. EAEP is well-positioned to reach its goals and leave the region in a better position than when it arrived.

During the year, EAEP achieved the following high-level results:

● One new renewable energy transaction reached financial close (40 MW), and one new renewable energy transaction reached commercial operation date (COD; 100 MW). In FY 2020, EAEP transaction advisors supported over 800 MW of renewable energy (RE) transactions to advance toward financial close (FC).

● 133% completion against annual targets for EAEP’s support to host-government strategic planning, 214% completion against annual targets for EAEP’s policy reform indicator, and 133% completion against annual targets for EAEP’s competitive procurement processes. Embedded within these achievements is the successful adoption of KETRACO’s first environmental and social management framework, which supported the commissioning of 308 km of transmission line. Work in this area will strengthen regulatory frameworks, improve the private sector investment climate, and increase transparency in procurement processes.

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● 98% completion against annual targets for new on-grid connections. EAEP supported 1,200,311 new on-grid connections in FY 2021. EAEP achieved 98% against our annual target by improving utility capacity to procure necessary equipment, improve geographical information system (GIS) capacities, and reduce the time and cost of making new connections. This includes 131,732 productive users, such as health facilities necessary to combat COVID-19.

● For the year, losses reduced at two utilities in pilot regions: a 5 percentage point decrease in aggregate technical, commercial, and collections (ATC&C) losses for Ethiopian Electric Utility (EEU), and an 11 percentage point decrease for Kenya Power.

● Financial performance improved at two utilities in pilot regions by $153.14 million this year: a $94 million increase in revenue at Kenya Power and a $58 million increase at EEU.

● 500 kV high-voltage direct current (HVDC) Ethiopia–Kenya interconnector supported; the entire Ethiopian portion of the line (433 km) was charged successfully, and Ethiopia commissioned the converter station at Wolayta Sodo. The Kenyan portion of the line was 99% complete in late September, and hot commissioning had commenced. Full commissioning of the interconnector will take place when the Suswa converter station in Kenya is completed, estimated by April 2022, thereby starting the trade of the anticipated 0.88 TWh of power.

● 189% completion against targets on the number of female interns/apprentices supported in private sector companies and utilities in Kenya, Rwanda, Tanzania, and Somalia. Of the 142 interns placed this year, 23 received offers of full-time employment.

● 115% completion against targets for the number of people trained (580 in total this quarter) in technical energy fields, including trainings on topics such as energy loss and balancing, public–private partnerships (PPPs), regional interconnectors, and low-emission energy planning.

This annual report depicts progress made, challenges faced, and flexibility in implementation during these testing times. The following two graphics depict achievement against EAEP’s key performance indicators and showcase cumulative progress toward results made by EAEP during FY 2021.

Structure of the EAEP Annual Report

The first section of this report provides an overview of EAEP’s objectives and cross-cutting results and achievements, both for the final quarter of the year and annually. The second section provides results, highlights, and activity details (in table format) by country and by cross-cutting area by quarter. Project Management Unit (PMU) achievements are outlined in the third section of the report. Finally, the report delves into the challenges and risks EAEP navigated during this quarter.

The end matter includes summaries of participant training and other participatory events (Annexes A and G), indicator performance data (Annex B), details on EAEP-supported transactions (Annex C), success stories (Annex D), team travel (Annex E), a staffing matrix (Annex F), and updates on environmental management (Annex G).

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Figure 1. EAEP selected activities from FY 2021

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Table 1. EAEP results across priority indicators

Project Goals LOP Target Progress to Date (as of 09/30/2021)

% Achieved Next Annual Targets

Number of new grid actual direct connections (PA #3)

4 Million 2,240,599 56% 1,720,000

Number of MW from transactions that achieved financial close

(PA #8)

1,500 MW 219 14.6% 1331.09

Number of MW that have been commissioned (PA #10)

1,251 MW 265 21.2% 878.35

Amount of investment mobilized for energy investment (PA #14)

N/A $614,000,000 N/A N/A

Kilometers of Power Lines Constructed or Rehabilitated: The sum of linear kilometers of new, reconstructed, rehabilitated or upgraded transmission and distribution lines that have been energized, tested, and commissioned/installed with East Africa Energy Program support (PA #19)

2,267.1 741 32.7% 587.1

Kilometers of transmission and distribution power lines

496.7 0 0% 324

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Project Goals LOP Target Progress to Date (as of 09/30/2021)

% Achieved Next Annual Targets reached financial close

(PA #20)

ATC&C losses reduced because of Power Africa support (Custom Indicator)

12 percentage points 20 percentage points 166.7% 2 percentage points

Number of laws, policies, regulations or standards to enhance energy sector governance formally proposed, adopted or implemented (PA #23)

77 77 100% 30

Number of host-government power sector strategic planning documents adopted, implemented, or revised, with EAEP support (PA #26)

19 19 100% 5

Number of competitive procurement processes for new generation capacity implemented with USG Power Africa assistance (PA #24)

21 14 66.7% 6

Number of female interns who receive EAEP gender and capacity building support

200 175 87.5% 75

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EAEP RESULTS Q4 AND ANNUAL FY 2021, BY OBJECTIVE

The following sections describe results per programmatic objective. For a full list of targets, actuals, and description of achievements, see Annex B. Annex A contains the participant training report for FY 2021; Annex G summarizes EAEP training events held.

Objective 1: Optimized Power Supply

EAEP focuses on advancing key power projects to financial close, building capacity within entities responsible for procurement, facilitating technical and financial agreements for vital transmission projects, and ensuring that EAEP’s activities harmonize with the goals of host-country counterparts.

Progress this fiscal year against minimum Objective 1 outputs included the following.

Removing barriers to financial close

EAEP continued support to generation and transmission transactions across East Africa, and worked with private developers and power sector entities to eliminate barriers to FC. Of the projects for which EAEP provided support, 22 transactions (926.85 MW) advanced toward FC; EAEP support and advancements are outlined in Annex C. In Kenya, the Alten Kesses (40 MW) solar power project reached FC in FY 2021. Power Africa has supported this transaction since the Power Africa Transactions and Reform Program (PATRP; 2014–2018), including training Kenya Power for power purchase agreement (PPA) negotiations with solar power independent power producers (IPPs); working with the National Treasury to create a bankable draft of the Government Letter of Support; and, most recently, assisting Alten to finalize remaining project documents and associated conditions required to reach FC.

Additionally in Kenya, the EAEP-supported Kipeto Wind Project (100 MW) achieved COD, and two additional solar projects—Radiant and Eldosol—are set to be commissioned in the October–December 2021 quarter, which will add 80 MW of clean electricity (40 MW each) to power approximately 120,000 Kenyan households with clean renewable energy. For all solar and wind projects in Kenya, Power Africa has provided support to modernize Kenya’s grid to integrate RE.

In Ethiopia, the Tulu Moye and Corbetti (50 MW each) projects ended the year on the brink of reaching FC for Phase 1. EAEP supported the Government of Ethiopia’s (GOE’s) Ethiopian Electric Power (EEP) and project developers by ensuring that the 16 conditions precedent (CPs) were fulfilled; as a result, in December 2020 and January 2021 (respectively), the project documents became “effective,” bringing the transactions closer to FC. Beginning in January 2021, EAEP actively worked with GOE/EEP’s counsel to resolve lenders’ queries that they required be addressed before they would underwrite the projects.

Initially, lenders raised 18 queries; EAEP helped address most concerns, with only five major concerns remaining in late 2021 in order to reach FC.

In Burundi, EAEP advanced the Ruyvi and Muli hydropower projects (10.65 MW) toward FC by providing a red-flag review and translation of project contract documents. In Rwanda, EAEP advanced the Bihongora project toward FC by providing a financial model used in tariff and PPA negotiations with the Government of Rwanda (GOR) and to satisfy lender requests. In the Democratic Republic of the

Alten Kesses (40 MW) solar power plant:

Kenyan independent power producer project reaches financial close

The Alten Kesses I solar project has been under development since 2014 and is a beneficiary of Power Africa’s support. The Alten Kesses power station near Eldoret in Uasin Gishu County will generate 40 MW of clean electricity to power approximately 60,000 Kenyan households, significantly increasing electricity access.

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Congo (DRC), EAEP advanced Talihya Nord (9.5 MW) by connecting the developer to concrete investment opportunities.

EAEP Indicator 2. Generation capacity reached financial close: Number of MW from transactions that achieved financial close (PA #8) – generation

40 MW (11%) completed in Q4? FY 2021 40 MW completed in FY 2021

FY 2021 target was 359.95 MW

EAEP Indicator 3. Generation capacity commissioned: Number of MW that have been commissioned (PA #10) *

100 MW (19%) completed in Q4 FY 2021 100 MW completed in FY 2021 FY 2021 target was 513 MW

Building capabilities in medium- to long-term generation and transmission planning

The generation, distribution, transmission, and policy plans of East African countries continued to need alignment and/or updated and accurate data. In Q4 FY 2021, EAEP proceeded with phase III of development of the EEP master plan with subcontractor WSP Global. Phase III activities included the financial assessment and tariff report, system-operating-gap analysis, system-integration study implementation plan, tender document training, and environmental impact report. In Rwanda, EAEP subcontractor Center for Climate Strategies (CCS) continued its weekly capacity building sessions for selected staff from the Rwanda Energy Group (REG) and Ministry of Infrastructure (MININFRA) as part of the Rwanda resource assessment. The training covered low-emissions analysis platform (LEAP) revisions to load and output curves, demand scenarios and considerations for alternative supply scenarios for LEAP modeling, and the hydro resource assessment process. EAEP presented the resource

19% Completed

East Africa Energy Program –FY 2021 Annual Progress Report | 8 assessment to REG’s Chief Executive Officer (CEO) for comment. In Kenya, EAEP advocated for the LCPDP to allow solar PV plants that are close to COD to continue on schedule.

In Uganda, EAEP continued developing a high-level risk matrix to help the Government of Uganda manage the rationalization process for the Ugandan energy sector. EAEP reviewed both the National Development Plan III and Uganda Vision 2040 documents.

EAEP Indicator 17. Number of host-government power sector strategic planning documents adopted, implemented, or revised, with EAEP support (PA #26)

3 completed in Q4 FY 2021 12 (133%) completed in FY 2021

FY 2021 target was 9

Strengthening government and utility capacity to negotiate, produce, and manage power generation and transmission projects

In Q4 FY 2021, EAEP completed its regional PPP training, implemented by the Institute for Public– Private Partnerships (IP3) and attended by representatives working with PPPs in Djibouti, DRC, Ethiopia, Kenya, Rwanda, Somalia, Tanzania, and Uganda. Courses this quarter focused on planning, preparing, and managing the process of tendering and procuring PPP projects. Participants are eligible to receive course credits from IP3 toward an internationally recognized PPP specialist certification. Additionally, this training creates a community of practice among designated PPP champions throughout the region, so as to build a common understanding of private sector needs for both generation and transmission PPPs.

EAEP continued to collaborate with the Cyrus R. Vance Center for International Justice (Vance Center) to conduct trainings for IPP and PPP departments in Kenya, Ethiopia, and Somalia. In Ethiopia, the Vance Center conducted a one-day training for EEP’s IPP unit on “Multilateral Development Bank Sanctions and Investigations.” In Q4, the Vance Center worked with reputable law firms in the U.S, Ethiopia, and Kenya to offer “Comparing Regulatory Frameworks” as part of the seven training sessions. These trainings will build the capacity of the respective countries to understand PPP and IPP projects in generation and transmission.

EAEP worked with the US Department of Commerce’s Commercial Law Development Program (CLDP

– Power Africa US Government Partner) to conduct training on PPP fundamentals for East African Power Pool (EAPP) planning-committee members. Attendees included EAPP members from Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, and Uganda. This EAEP-supported training series has enhanced EAPP’s PPP skills, which is critical given capital requirements for large-scale transmission development throughout the region.

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In Rwanda, EAEP subcontractor Studio Pietrangeli (SP) completed deliverables (final and full environmental and social impact assessment [ESIA], resettlement action plan [RAP], and environmental and social management plan [ESMP] reports, including capacity building) for the Gisagara–Huye– Rukarara and Kirehe–Rwinkwavu transmission lines. EAEP expanded SP’s initial scope of work to include a review of tender documents prepared by the Energy Development Corporation Ltd. (EDCL) for the upcoming Bugesera Airport/Industrial Park transmission line. EAEP submitted a revised review of technical specifications for the 110 kV transmission line based on feedback from EDCL and the African Development Bank (AfDB); the EDCL-developed tender documents required an international expert review in order to unlock the funding earmarked by AfDB.

In Kenya, EAEP finalized and submitted to Kenya Electricity Transmission Company Ltd. (KETRACO) an Environmental and Social Management Framework (ESMF) that gave the transmission company a new system to design, procure, construct, and maintain power lines in an environmentally and socially conscious manner, aligned with Kenyan and international standards. EAEP also helped KETRACO revise its Resettlement Policy Framework and implement a new grievance and complaints-handling mechanism

(GCHM).

EAEP Indicator 4. Number of competitive procurement processes for new generation capacity implemented with United States Government (USG) Power Africa assistance

(PA #24)

4 (133%) completed in FY 2021

FY 2021 target was 3

Improving legal, regulatory, and policy frameworks to support private sector investment

In some East African countries, private sector investment is hindered by either outdated or nonexistent legal and regulatory frameworks that delay FC and COD and ultimately hinder investment. To improve this process, EAEP continued a suite of legal, regulatory, and policy support to foster an enabling environment for private sector investment.

In Kenya, EAEP senior advisors served on the Kenya PPA task force, the mandate of which is to undertake a comprehensive review and analysis of all PPAs entered into with Kenya Power and to make recommendations on whether or not the PPAs will need amending in order to advance. These advisors provide critical perspectives from the private sector. Recommendations from the task force will be incorporated into future policy regarding power purchase and tariffs. EAEP also continued its support for the development and review of regulations to implement Kenya’s Energy Act 2019, hosted by the Energy and Petroleum Regulatory Authority (EPRA). In Q4, EAEP supported the implementation of the Act by commenting on regulations and associated regulatory impact-assessment reports after EPRA invited stakeholder and public comments.

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In Rwanda and Uganda, EAEP supported both the Rwanda Utilities Regulatory Authority (RURA) and the Rural Electrification Agency (REA–Uganda) to move toward cost-reflective tariffs. In Rwanda, EAEP supported RURA by updating its tariff methodology and conducting a cost-of-service study. In Q4, subcontractor Mercados–Aries International (MAI) received and reviewed outstanding questions on the cost-of-service study, and integrated into the study the new business plan for Rwanda’s Energy Utility Corporation Limited (EUCL). This EAEP-supported activity will increase RURA’s ability to conduct frequent tariff reviews and revisions in-house. In Uganda, MAI launched a standard cost-benchmark study for transmission and distribution grids for the Electricity Regulatory Authority (ERA). Establishing a cost benchmark will allow ERA to develop a cost-reflective tariff and a live tool for costing transmission and distribution projects. These resources, in turn, will enhance the sector’s sustainability and encourage further private sector engagement.

EAEP Indicator 15. Policy reforms: Number of laws, policies, regulations, or standards to enhance energy sector governance formally proposed, adopted, or implemented as supported by EAEP assistance (PA #23)

3 completed in Q4 FY 2021 45 (214%) completed in FY 2021

FY 2021 target was 21

Objective 2: Increased Grid-Based Power Connections

EAEP’s Objective 2 team made progress on its goal of increasing connections in Ethiopia, Kenya, Zanzibar, and Uganda. The cooperation framework (CF) with Tanzania was still under negotiation as the fiscal year ended, which unfortunately impacted connections for Tanzania Electric Supply Company Ltd.

(TANESCO). EAEP expanded its objective 2 activities to mitigate the missed connections in Tanzania and the near final closeout of EAEP’s Ethiopia activities; this effort will lead to new on-grid connection activities in in Rwanda, DRC, and Somalia.

Increase new on-grid customer connections and productive users connected to the grid

EAEP supported 1,200,293 new on-grid connections in FY 2021. The program continued to support utilities to develop and implement strategies to increase the number of on-grid connections for residential, commercial, and industrial customers. In Ethiopia, EAEP completed Ethiopian Airline Academy (EAA) customer-service management refresher training for 46 EEU staff on August 30–31.

Cumulatively, the training-of-trainers (ToT) sessions trained 2,478 EEU employees in different regions, including 800 new technicians. The meter test benches (MTBs) arrived in Ethiopia and were commissioned. The new MTBs enabled EEU to begin testing an additional 1,000 single-phase and 300 three-phase energy meters per day, for a total daily capacity of 2,000 single-phase and 600 three-phase energy meters—a 100% increase in output. The MTBs are critical for EEU’s plan to continue to increase its quarterly connections. EAEP also conducted the fourth round of procurement and contract-administration ToT for EEU employees.

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In Kenya, EAEP continued implementing Kenya Power’s distribution master plan Phase I with Siemens and stakeholders. EAEP completed capacity building targeted to 10 KPLC engineers at various level of proficiency in application of the industry-standard PSS-SINCAL software. The participants received hands-on training in advanced distribution power flow analysis, distribution loss studies, distribution planning studies, integration of renewable energy, task automation with Python scripts and user defined modelling. Furthermore, prior to the start of the formal training, EAEP, in collaboration with KPLC identified an appropriate trainer in KPLC to participate in the program with the explicit purpose of championing subsequent trainings. In addition, Kenya Power continued to provide progress reports on the rollout of the EAEP supported business process reengineering strategy.

In Zanzibar, EAEP continued to support the Zanzibar Electricity Corporation (ZECO) with its connections program through two months of advanced GIS training for 10 staff, including engineers, technicians, surveyors, and information technology (IT) representatives. ZECO was seeking to modernize its customer-connection processes by increasing the level of digitization. In August 2021, EAEP conducted a study to oversee the characterization and analysis of existing ZECO processes for connecting new customers. EAEP recommended best practices to digitize ZECO’s customer registration and connection processes.

In Uganda, the Government of Uganda resolved to resume implementation of its electricity connections policy (ECP) after a severe reduction in new-on-grid connections. This decision resulted in 29,751 new connections in Q4. EAEP also helped REA–Uganda coordinate the review and testing of connection materials to be used in an electrification project in southwestern Uganda; participated in an ongoing energy meter online factory-acceptance test (FAT) for KfW’s grid-densification project to increase electricity access in rural and peri-urban areas in Uganda; and provided supervisory support for verifying connections made under the Uganda Rural Electricity Access Project (UREAP), funded by AfDB. To support productive use, EAEP continued the productive use of energy (PUE) strategy with Kilembe Investments Ltd.—a small service provider in western Uganda—which will build capacity for the organization to identify, recruit, and connect large power users (LPUs).

EAEP Indicator 5. Electricity access: Number of new grid actual direct connections

(PA #3)

1,200,311 (98.4%) completed in FY 2021 FY 2021 target was 1,220,000

Reduce the time and cost required to connect a household or business to the power grid

In Ethiopia, EAEP completed the first draft of the assessment of the EEU and Universal Electricity Access Program (UEAP) distribution system. Several standards were analyzed through the assessment, with

East Africa Energy Program –FY 2021 Annual Progress Report | 12 recommendations on good practice for implementing the standards. Further, the assessment should lead to a unified standard for the country’s distribution system. The assessment also will reveal shortcomings in the distribution network. Additionally, EAEP conducted procurement and contract-administration training for EEU and ZECO to support a streamlined and more efficient process for procuring necessary materials and contractors to support new on-grid connections. Also in Zanzibar, following EAEP’s ZECO workshop on electricity network simulation based on the DIgSILENT Power System Software, the program completed a three-month follow-up session to help ZECO’s distribution network planning engineers simulate various network scenarios, so as to fulfill the rapidly growing energy demand in Zanzibar in a timely and cost-effective way.

In Ethiopia, EAEP analyzed the average number of days EEU requires to make a new connection. The program based the analysis on EEU’s enterprise resource planning (ERP) data of 71,183 newly connected customers in 481 service centers in June 2021. EAEP worked on the EEU distribution-system assessment to support the utility’s plans to increase its capabilities for making new connections in a timely and cost-effective way.

In Kenya and Zanzibar, the objective 2 and 3 teams have been coordinating with Kenya Power and ZECO, respectively, to receive data on the time and cost of connections. Analysis of these data is ongoing, and will inform strategies for reductions in the next programmatic year.

Objective 3: Strengthened Utilities and Other Power Sector Entities

In Q4 FY 2021, the EAEP utility-turnaround team expanded its work with EEU and Kenya Power, given the successes of the pilot areas. The team continued to build momentum with Zanzibar, and continued discussions with two utilities in Uganda (Umeme and Kyegegwa Rural Electricity Cooperative Society [KRECS]), and small providers in Somalia.

Reducing ATC&C losses

In Kenya, ATC&C losses were reduced by 3 percentage points compared to the previous year’s quarter, in pilot sectors. In Q3, EAEP extended its loss-reduction road map initiative to two additional sectors, Nairobi Industrial Sector and Upper Hill Sector, which saw significant improvements in revenue and operations after only three months. In Q4, the team further expanded its initiatives to 25 sectors across the country, by providing capacity building and strategic planning to managers, data analysts, and other relevant staff members from those sectors. EAEP’s utility-turnaround team participated in a series of meetings with Kenya Power’s customer service department, and also met with the “war room” loss-reduction task force to initiate several activities. The EAEP team initiated activities on energy accounting for the sectors by respective feeders, particularly those supplying the 24 high-consuming sectors.

In Ethiopia, ATC&C losses declined by 10 percentage points in Q4 in pilot districts of Addis Ababa and FinFinne. EAEP’s utility-turnaround team collected data from industrial and large commercial customers using handheld reading devices, as an initial phase of the optimized commercial cycle rollout to the remaining Addis Ababa districts. The data will also be useful for the upcoming EEU advanced metering infrastructure project, which aims to install remotely controlled meters for industrial customers and large commercial customers. This activity will help EEU reduce commercial losses and increase revenues. The EAEP team also read substation and feeder meters to process data and ascertain overall energy consumption for Addis Ababa Region and Finfinne District. EEU’s managers established the commission to reorganize service centers, including realigning job descriptions. EAEP worked with the

East Africa Energy Program –FY 2021 Annual Progress Report | 13 commission to ensure that all operational tasks at service centers, including meter sealing and inspection, would have the relevant staff.

In Zanzibar, the utility-turnaround team continued to make progress in improving ZECO’s operational efficiency by mapping customers, identifying faulty meters, detecting energy-theft cases, and pinpointing other irregularities that were impacting energy losses. The customer-mapping process will also enable ZECO to track energy flow and conduct a comprehensive analysis of the energy balance among feeders, distribution transformers, and individual customers’ meters.

In Uganda, during this fiscal year, EAEP launched support for KRECS by finalizing a diagnostic assessment that determined support areas in energy accounting, segregation of losses, network mapping, revenue protection functions, document reviews, and training. The team also finalized a scope of work with Umeme for loss-reduction and business process reengineering support.

EAEP Indicator 8. ATC&C losses reduced as a result of EAEP support, measured in percentage points

Increasing utility cost recovery (revenue)

In FY 2021, the total increase in revenue in the pilot areas of Ethiopia and Kenya was $153 million compared to FY 2020. In Kenya, EAEP’s utility-turnaround team developed performance tools for Kenya Power’s 25 high-consuming sectors, representing 60% of the utility’s overall billed revenue. EAEP’s utility-turnaround team conducted training for 25 sector heads on utility operations, monitoring tools, and the EAEP approach used in the three initial pilot sectors. Separately, EAEP met with Kenya Power’s general manager of commercial services to launch support for the newly formed debt-reduction team.

EAEP team presented detailed planning and monitoring tools for debt reduction and monitoring for Sector/Zone and itinerary level to KPLC management and MD/CEO, tools that EAEP team developed for 3 pilot sectors. The Acting MD/CEO requested from her team to work closely with the EAEP team and adjust the tools to be used by KPLC. EAEP team submitted tools to the ICT development team:

with these tools in place, they can monitor and see daily collection performance by each Sector.

In Ethiopia, additionally, the EAEP team continued to support EEU’s commercial operational cycle and revenue collection activities through field inspection in the East Addis Ababa region. EAEP and

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EEU discovered several anomalies, including damaged and nonfunctioning meters. The EEU team notified its management and districts team of the anomalies for remedial action. These activities will directly impact cash collection figures and loss reduction efforts. EAEP continued helping EEU standardize and improve overall commercial operations at its service centers, thus increasing efficiency and revenue collection.

Although the team did not yet begin measuring revenue increases in Zanzibar during this fiscal year, the EAEP team collected data from the billing and customer care divisions to generate a comprehensive performance report for ZECO, covering monthly and annual figures. Through the customer mapping process, the team identified numerous illegal connections that were escalated to ZECO’s revenue protection team for action.

EAEP Indicator 9. Revenue by utilities increased through EAEP support

Support for strategy and policies

In Kenya, EAEP supported the steering committee of the Kenya Power task force on loss reduction (which includes general managers for commercial services as well as the information and communication technology [ICT], legal services, human resources [HR], and strategy departments). The program supplied the loss-reduction task force (war room) with presentations and initiatives to prevent, detect, and recover energy losses. In Zanzibar, EAEP launched support activities with an internal audit process and drafted an internal audit manual, operating procedures, risk assessment work plan, ICT working process, and reporting templates.

Objective 4: Increased Regional Power Trade

In East Africa, cross-border power trade is critical to driving down costs, improving efficiency, and increasing the reliability of electricity supply throughout the region. Yet the region faces numerous

East Africa Energy Program –FY 2021 Annual Progress Report | 15 challenges, including perceived oversupply in multiple countries, politically sensitive borders for power trade, and interconnection noncompliance. EAEP achieved the following in FY 2021.

Developing and accelerating regional interconnection projects

EAEP’s Objective 4 team focused predominantly on supporting specific transactions in Q4, as shown in Table 2.

Table 2. Status of EAEP-supported interconnection projects, Q4 FY 2021

Transaction / interconnector Status

Ethiopia–Kenya 200 MW power trade

Ethiopia’s portion of the infrastructure was completed. The Kenya side reached 99% completion and commissioning commenced, but has not finalized.

Ethiopia–Kenya– Tanzania (EKT) transmission line

EAEP presented the wheeling model to EAPP and member utilities. EAPP and USAID confirmed that the model would be appropriate, following approvals, for use across the different utilities, and could be used widely for future transactions (because the model strategy applies best practices, including the African Union’s Continental Transmission Tariff Methodology).

Rwanda–Uganda Shango–Mbarara 220 kV line

This project, when successfully completed, will synchronize power networks among five countries (Burundi, DRC, Kenya, Rwanda, and Uganda) and lay the foundation for future power trade in the region. EAEP continued to lead multiple central coordination committee meetings for Shango–Mbarara interconnector commissioning. Attendees represented EAPP; Rwanda’s EUCL; Kenya Power; Nile Equatorial Lakes Subsidiary Action Program (NELSAP); Rwanda’s EDCL; Kenya’s KETRACO; Uganda Electricity Transmission Company Ltd. (UETCL); and USAID Missions in Kenya, Rwanda, and Uganda.

The EAEP Objective 4 team performed physical inspections of Mbarara and Shango, where the substations were found to be physically ready for interconnection. It was discovered, however, that the Rwandan and Ugandan substations were using different communications equipment. EAEP supported negotiations between the utilities to identify and implement a strategy to align the boosters. All parties agreed to proceed with the installation of ABB Telecoms FOX communication equipment on both ends of the interconnector; once this occurs, commissioning can take place.

DRC–Uganda 400 kV interconnector transaction (Nkenda– Beni–Butembo–Bunia line)

The Nuru project will include a PPA with Uganda for 150 MW and associated energy, over a privately developed interconnection of approximately 1 TWh per year. Nuru expects that the project will directly lead to 455,000 new connections in DRC. EAEP supported Nuru with transaction advice, document reviews, and matchmaking with potential financiers. EAEP completed a seven-module transmission financing training series for the Nuru team. Additionally, in Q4, EAEP helped Nuru identify alternative transmission routes and meet with potential off-takers.

Ta…