Terms of reference (TOR) for individual consultancy to carry out feasibility study on introduction of community based solar led lantern in Kenya

1) General Background

Providing access to energy has proven to be beneficial in not only improving the livelihood of people living without
electricity but also creating social and economic impact needed to achieve the Millennium Development Goals (MDGs).

Recent case studies, for example, illustrate how electronic lightning can change the perspective of people by increasing literacy rates, enhancing productivity of small businesses, improving health conditions and securing safe delivery at night.

In view of recent rise of oil prices, renewable energy draws increasing attention in African countries.

SANYO Electric Co., Ltd., a global electronics company based in Japan, has cutting edge solar technology and has
developed various products targeted to the African market.

These include

1) small-scale, independent solar power stations that can be used for charging electronics products such as mobile phones, radios etc.

2) An economical, bright and long-lasting multi chargeable LED lantern.

To market the products in Kenya, two types of business models shall be considered:

1) power charging station model and

2) small charger model in Kenya, with the difference being the way in which the LED lantern will be charged.

The expected advantages and challenges of each business model are as follows.

1) Power charging station model: This will involve setting up a solar power charging station with a 200W capacity in specific communities. The LED lantern will be charged by connecting to this solar station, which can charge approximately 50 lanterns at a time.

Advantages: The solar power charging station can be used for other applications such as mobile phone.

Challenges: The initial costs of installation will be relatively high. It will be necessary to introduce a monitoring system, product maintenance system and micro-financing scheme.

2) Small charger model (“solar LED lantern” model): Attaching a small solar panel each LED lantern can be charged
individually.

Advantages: The user can charge the LED lantern anywhere.

Challenges: The application of solar panel will be limited for LED lantern only. Introduction of monitoring system as well as product maintenance system will be needed.

In both cases, there will be need to identify capable small-and-medium-sized enterprises (SMEs) and local entrepreneurs who will be able to run the solar stations in their communities. Given the lack of an existing supply-chain of these products, it will be necessary to identify local distributors and develop a supply-chain, which will help create jobs and improve incomes for the poor. There will also be need to partner with local microfinance institutions to provide investment capital.

2) Objectives of the Assignment

The overall objective of this consultancy is to conduct a Feasibility Study to evaluate and determine the commercial
viability of introducing the SANYO solar LED lantern in Kenya.

As financial services is one of the critical elements of growing this business sustainably, the study on access to financial
services including microfinance in Kenya is highly prioritized.

3) Scope of Work

The scope of this task shall include but not necessarily be limited to the following:

1) Review existing works on the energy situation and electricity status in Kenya (macro energy environment, government policy, electrification coverage & penetration, ways of utilization, alternative energy, cost analysis including poverty penalty, information on power supply companies and local electronic appliance stores etc) and other electrification projects in target communities

2) Analyze the solar LED lantern dealers and manufacturers, its market, demand projections and business environment
(government policy, business law, custom procedures etc)

3) Asses the capacity of local entrepreneurs and local service provider (as potential partners in the SANYO lantern
business) working with target communities and propose potential income generating opportunities.

4) Assess the capacity and accessibility of existing microfinance institutions (local needs survey, compare Kenyan
microfinance models versus Grameen Bank, examples of failure/success) and/or feasibility of building a new
microfinance scheme to fund the solar LED lantern business. Identify specific institution(s) willing to provide funding for SANYO products.

5) Recommend the best strategy for the next stage i.e. field test

4) Duration of Assignment, Duty Station and Expected Places of Travel

The assignment will be for a period of three months. It is expected the consultant will travel to all the provinces in the
country. The final report will be presented at the UNDP offices at Nairobi.

5) Degree of Expertise and Qualifications

Education

• Masters degree in finance, business, entrepreneurship development or related field.

Experience

• Minimum 5 years relevant experience.

The following would be strong assets:

• Distinctive experience in working with the Private Sector on issues of business strategy, business modeling and new business development
• Experience working in the energy sector
• Experience in provision of microfinance to local communities
• Experience in supply chain design and management
• Field experience related to issues of economic development and entrepreneurship development.

6. Application Procedure:

All interested applicants are expected to submit an application including:

• Letter of interest/ Proposal;

1. Explaining why they consider themselves the most suitable for the work
2. Provide a brief methodology, on how they will approach and conduct the work

• Personal CV including past experience in similar projects and contact details of referees
• Financial proposal indicating their consultancy lump sum fee.

Applications should be addressed to procurement.ken@undp.org to reach us not later than 6th August 2010.

For more details on the Terms of Reference please visit our website http://www.ke.undp.org/notices

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