| Title | Community-Developer Business Model Promoting Social Energy Enterprises (Case study of Mutunguru 7.8MW Community Driven Small Hydro Power Project) |
|---|---|
| ID_Doc | 66010 |
| Authors | Njogu, M; Kimathi, P; DaSilva, I |
| Title | Community-Developer Business Model Promoting Social Energy Enterprises (Case study of Mutunguru 7.8MW Community Driven Small Hydro Power Project) |
| Year | 2017 |
| Published | |
| Abstract | The paper seeks to demonstrate the use of a community-developer business model to de-risk energy projects and enhance local community involvement in sustainable clean energy projects. The Feed-In Tariff (FiT) Policy enacted in Kenya allows Independent Power Producers (IPPs) to generate power and sell to the grid under a standard Power Purchase Agreement (PPA). This Model used by the Promoters of Mutunguru Hydro Power Project has enabled incorporation of 1200 local community members to codevelop and own a grid connected power project. Generally, local communities are engaged in small offgrid energy projects that don't have a sustainable anchor client thus rendering them commercially unviable. The Mutunguru Initiative incorporates a type-A mini-grid where the national utility company is the anchor client. Financing energy projects with active participation of the local community are considered an investment risk in Sub-Saharan Africa since there are no structures to protect the investor from any acrimonious declaration from the community that may affect the project operations and decisionmaking processes. The local communities lack capacity in project development, operation and maintenance of small hydropower plants. The business model demonstrated here has blended social-enterprise with a capitalistic approach to project development and management with local community ownership through social equity. The local community has both management positions and revenue share in the commercially viable, high capital intensive clean energy project. The project governance system has been anchored on international best practices and commercial financing standards. |
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