I spent the last couple days learning about how countries in Latin America, Africa and the Caribbean might best to stimulate the implementation of renewables at the first annual REEM Conference. The conference was largely an attempt to identify and some lessons learned and best practices from the EU, and even the US, which could help shape policy in these regions.

I would contend that knowledge sharing is always constructive. Yet, as some of the entrepreneurs on the panel explained their decidedly unique and varied frustrations and successes surrounding each of their projects, I could not help but feel that the concept of pontificating on would be effective policies for a developing countries from a well lit and air conditioned downtown San Francisco hotel ball room was a bit cheeky, if not resoundingly inadvisable.

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Following up from my last post. Other areas of interest at the World Bank’s Energy Week conference included rural electrification.  Grid connection is notoriously poor throughout Africa.  Tanzania, for example, is around 22% depending on whom you talk to.  In addition, just because a community has a grid penetration, it doesn’t mean everyone in that community has power at their house.  Connections are expensive.  The waiting list for the utility to make the connection is long.

Often time people take it upon themselves to make their own connection.  Even if they do have power, it might not be reliable.  Kenyan Power and Lighting Company is estimated to have around 11,000 outages per month. The other option for people to address lack of (or unreliable) grid connection is to support it with solar PV or fuel based generators.  These two technologies support communities, can add capacity to the grid (if connected), and provide a potentially cheaper way to provide power to end-users (factoring in the implied costs associated with transmission) .

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Last week I went to the World Bank’s Energy Week in DC.  It was an exciting event in which the World Bank hosted “energy and finance industry executives, senior donor and developing country government officials, stakeholders and leading-edge thinkers of the energy sector”.  Seminars discussed energy efficiency, rural electrification, alternative energy resources, and climate change.  The Global Energy Assessment was an interesting topic discussed by US renewable energy trade organization and private sector.  If you’ve been paying attention to renewable energy there was nothing new, except the passion to engage the emerging markets. 

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Working in Africa requires patience, local friends, patience, and patience. I forget what the World Bank rating is for Tanzania on ease of setting up a business, but it takes a certain luxury of time and money. The process is mostly transparent, although it helps to have a good advocate or lawyer (there is a difference in Tanzania) to assist in creating the necessary documents and then submitting them to the government. Lines in Dar to submit the paperwork can be long and confusing, so again it helps to have local assistance. The basic costs start to finish is about $1000.00 USD.

dissigno’s Tanzania project may begin by setting up the entity. We have several recommendations for lawyers garnered from local contacts and networking in-country. Face to face meeting helps immensely as telephones and e-mails are either ignored or used only to set up a time and place for a meeting.

A. Immediate – Implementation

1. Setting up an entity – notes from several lawyers include:

a. Having a TZ national on the board, with a share stake makes formation easier and faster. The number of foreign versus TZ nationals determines whether the company will be identified as a
national or foreign company. A wholly foreign company is deemed as removing value from the country. There are many ways to accomplish this, but the final solution includes using someone that you trust.

b. The recommendation that we incorporate as a national versus a foreign company (more board members that are TZ than foreign) seemed less important to us. The US and Tanzania do not have a tax treaty. Thus, if a US company simply registered to work in TZ (rather than create a TZ entity) the TZ government would be allowed to examine the US company’s books.

c. A registered company can then register with the Tanzania Investment Center (TIC) The TIC was created to encourage investment in TZ, and offers many incentives. 0% VAT on capital goods, low or deferred income taxes, easy work and living permits, easy repatriation of profit, protection from nationalization, are among the many financial incentives to encourage investment. However, the incentives are different between foreign and national companies.

d. The cost to form the entity is about $1000.00 including the lawyer fees, forms, state fees, and stamps. There are other indirect costs, such as office space that must reflect a three-year commitment and employees among others. It can take anywhere form 1-3 months to complete. If articles of incorporation are prepared ahead of time the time may be shorter.

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Since Gary Zieff is in Africa, and I think his efforts with dissigno are critically important I will take the liberty of writing a bit him and forwarding an email or two while he’s there. The concept behind dissigno is simple – it’s execution is not. Gary and his partner David Williams have worked hard on a sustainable business model that will generate economic, environmental and educational rewards – they recently won a grant from the World Bank to bring sustainable power to Tanzania.

Here are the quick facts that prompted dissigno to action in Tanzania:
Candle provide 1.1 lumen and costs $58.40 USD a year to operate
Simple Wick provides 1.1 lumen and costs $8.92 USD a year to operate
Kerosene Lantern provides 182 lumen and costs $56.73 USD a year to operate
1 W LED provides 320 lumen and costs $4.38 USD a year to operate
Source: IFC Lighting at the Bottom of the Pyramid GEF Project March 2006

The opportunity was precisely what CleanTech is all about, providing a more ecologically and economically sustainable solution for a current problem.

I got this email from Gary a couple days ago:

Figurative tears run down my cheeks. After 5 days, 3 planes, 3 continents, many taxis, buses and cars myself and my precious cargo is a mere two hours jeep ride from the final destination. In this modern age, it really hasn’t been difficult, but rather time consuming to get the pedal generator, a bunch of supplies, and all the cargo to keep my mortal coil spinning here on African soil. Cynthia (Joel’s girlfriend) and I step down from the 19 seater turbo prop plane onto the red dirt runway of Bukoba and are greeted by Joel and William. The flight was exciting over Lake Victoria. The more so as we neared Karagwe dragging the large metal container carrying the pedal generator. It is nearing the end of this leg of the journey, but also the start of something new and exciting.

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Back in June I was in Kenya to learn about the business challenges they faced there–especially after all the post-election violence. It was a very eye-opening trip in many ways; I had the opportunity to meet everyone from the most notable dignitaries and business leaders to the poorest slum residents. Each of the meetings was very interesting, although I didn’t find the one with the executive director of Climate Network Africa to be very productive. She was full of climate change blame for the US/Europe, didn’t offer any constructive solutions, and demanded reparations for the damage that would surely come to the African environment. I found this unproductive for several reasons.

First, her supporting data were misleading. She drew facts and figures from several years ago, when the US and Europe were way ahead of everyone in carbon emissions. Don’t get me wrong; the US and Europe are still way ahead, but the gap is closing a little and the trends, which show developing nations like China overtaking them in the future, reveal that the problem must be addressed globally, not just in a few countries. She also used exclusively per capita carbon emissions statistics, which are irrelevant. The environment doesn’t care how many people are producing the emissions; it just cares that they are being produced! By her logic, the US could become a better global citizen just by increasing its fertility rate instead of reducing its emissions!

Second, she was all problem and no solution. Yes, we all know that the industrialized countries have been the greatest emitters, but it is unproductive to rehash this over and over and over again. Yes, we screwed up. No, we didn’t know the consequences industrialization would have until relatively recently but yes, we accept responsibility for it. Now let’s stop playing the blame game and all work together to find a solution!

Finally, her antagonistic “The West is evil” presentation isn’t likely to motivate any action. A large organization exhibits a collective subconscious that behaves in a very irrational, human way. Attacking developed countries is likely to induce defensiveness, not action. A collaborative approach would be much more constructive.

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