 Hello, everyone. I think we are going to get started now. It's two o'clock UK time. So welcome everybody and thank you for joining us today. My name is Juliette Tunstall and I'm the external events officer here at IID. Today's event is looking at how subsidies can accelerate universal energy access. And I'm really looking forward to the discussion we're going to have with some great speakers today. The event today is hosted in partnership with HEVOS and Tier Fund and is part of the IID debates webinar series which aims to create a space for conversation and debate on key and current sustainable development issues. If you're interested in getting regular updates on these events, we have a newsletter and I will send a link to that towards the end of the session. We are expecting a lot of participants today and you're hoping you're going to be joining us from all over the world. So while we wait for a few more people to tune in, I'm just going to quickly run through how we're going to use the Zoom tools and get the most from this session and then we can get started. So that is it from me. I'm now going to hand over to Rita Poppe who is the Global Advocacy Officer for Green and Inclusive Energy at HEVOS and our moderator for today's session. So thank you very much and I hope you enjoy the conversation. So thank you Juliette. Welcome to all of you and thank you for joining. We have a strong set of speakers today and an impressive number of participants and that's even counting. As said, focus of today's session is an exchange on the design and key components of subsidies, energy subsidies to accelerate universal energy access up to now significant significant progress has been made in improving access to electricity. However, some 800 million people still don't have access and for clean cooking the picture is even more grim 2.8 billion people worldwide still go to go without clean and safe cooking solutions. Again, it's 2.8 billion availability of finance in the right format is one of the major tricks to closing the energy access gap. And within finance, subsidies can play a major role. The use of subsidies is currently often neglected, but key players sharing away from using it. This event will cast some light on how subsidies can accelerate energy access and how it should be designed to do so. For this, I would like to present you our speakers who will contribute to this discussion, each from their own perspective. First up, it's Stephen Nash, who is the founder of Kugana advisory and has been working with different on subsidies research. He's followed by the Punika Pereira, who is a researcher in IAD shaping sustainability markets research group. And after the two presentations, we have a panel consisting of Satish Kautam, who is the national program manager of renewable energy for rural livelihood in Nepal. And Linda Van Moen, who is the founder and managing director of economic Kenya. And we have Daniel Kiedmer, who is the finance lead at Africa Minigrids Development Association based in Nairobi. Finally, we have Dana Riesemkova, who is the global lead for energy access at the World Bank. So this will be our set of speakers and panelists. A quick overview of the event. We will first start after this with a poll, quick poll to have a sense of your subsidy feelings. Then we go over to Stephen and the Punika, who will both present recent research, and then followed by the panel as I described, just described. And then we do another poll to see how successful the panel and the speakers were in explaining you the usefulness of subsidies. And then we close with a Q&A session in which you can participate as explained by Juliet for all your burning questions and you can pose your questions already throughout the whole session in the Q&A box. So we're looking forward to a vivid exchange. And first of all, we go over to the poll. So the question is, do you think energy subsidies are essential for achieving universal energy access, and the answer options are quite straightforward. Very much so, somewhat slightly or not at all. Okay, just sharing the results Rita, can you see those. I know, I don't know why but I can't see them. I can run through the results for you so we had 73% at very much so 26% at somewhat and 1% at slightly 0% not at all. Okay, so there's a clear preference but still somewhat to gain, I would say. So, I would like to continue by inviting Stephen to present the findings of his recent research. Thank you Rita for the introduction. I'm just going to share the slides which are hopefully up now. Okay. So thanks very much for the introduction Rita. As Rita mentioned, I'm going to be presenting some research that recently been carrying out was commissioned by Tier Fund. Tier Fund is a Christian Relief and Development Agency, focused on ending global property. Research is part of their work on climate change and energy access. And this is actually the second paper, following a paper that we published in 2018 that was looking more generally at the role of subsidies in accelerating progress on energy access. So I'm going to start just very quickly with a little bit of context which I'm sure that most people on the webinar are familiar with. So, most of us are aware that there's a big gap still between where we are at the moment and successfully achieving SDG7. So Sustainable Development Goal 7, the goal of reaching universal access to energy. So on trends in 2030, we would still have several hundred million people without access to electricity. And as Rita was saying, a far bigger gap without access to clean cooking. The current COVID-19 crisis really puts this into focus. On the one hand, the challenge is greater than ever. On the other hand, this week, you sales data for the first half of this year come out of Goggler showing a big drop in in sales, but at the same time we also know of course that energy access can be a great facilitator of giving communities more resilience to cope with some of the challenges that are being posed to them at the moment. So, what are the subsidies then and how they can be used. So, I think when we're talking about subsidies, the first thing we need to be really clear on is what we're trying to achieve with the subsidy. And normally we are talking about one or two things or more frequently I guess a combination of the two. The first one is high cost of service. So in a lot of the areas where there remains a large energy access gap in rural areas, for instance, the cost service is higher. So CAPEX might be higher and the ongoing costs of servicing those areas might be higher. So there might be higher customer service costs higher maintenance costs and so on. So of course it's not unique to delivering distributed energy access solutions. It also is the case in delivering a grid based electricity system. It's also not unique to developing markets. So this is a challenge when you're running an electricity system in a developed market or middle income country as well. And these differences importantly will persist. They'll remain the case as is illustrated by looking at those more developed markets. The other thing that we're often talking about when we're looking at designing subsidies is looking at affordability gaps. So also in these rural areas we tend to have communities that have a lower ability to pay for energy services. And so there's an affordability gap. Now hopefully this affordability gap will decline with time as households increase their earnings and so on. But some of those affordability gaps may persist. We see in more developed countries that energy poverty remains an issue in many cases for instance. Now, because in both of these areas to a greater or lesser extent these issues may persist. Maybe me talking about subsidy design is a little bit of an error at the outset of this discussion. Maybe you should be thinking about this more as a market design challenge. And how do we design a market? What's the target model look like in let's say 2030 or 2035, not just to deliver energy access and to close the gap, but to sustain that performance as well. Before I move on, I just want to very quickly nod to a few other reports and trends over the last couple of years. I think the debate has moved on a long way in subsidies and the poll that tested to this as well. That we've done this presentation a couple of years ago, I think that would have been perhaps a lot more pushback against the idea of subsidies, but the papers that I've got on the screen there is definitely not a complete list at all. There's lots of literature out there and it's growing all the time some great work, but, but there's a lot of work being done and it's obviously a lot of debate around what the subsidies look like, but increasing acceptance that we need to use them or as I was saying maybe it's not quite some sort of intervention or market design intervention that helps us to deliver energy access. Now we talk about subsidies. It's not quite that straightforward. There are lots of different design levers that we can pull and subsidy design itself is complex area. I've listed some of the design characteristics or levers that we can pull on this slide. It's by no means an exhaustive list, but just gives you a sense of some of the decisions that you need to make when designing a subsidy scheme. How targeted is that scheme? Where does the funding come from? To what extent does the subsidy just provide a funding input versus providing some sort of results based signal? Is the subsidy only awarded to one or two service providers or is it open to everybody? How is the subsidy allocated and what is the scope of the subsidy both in geographical terms and in terms of the technologies or mode of delivery that it might cover? So as part of the work for tier funds, we've looked at experience across a wide range of subsidy schemes to try and understand what lessons we can draw from those, what has worked and what has worked less well. We've looked across a range of different geographies and that's shown with the map on the slide, but we've also looked across a number of different delivery modes. So we've looked at on-grid electrification, we've looked at off-grid electrification, but we've also looked at clean cooking to try and draw out some of the key messages. A lot of this is covered in the paper but I want to just highlight a few of the really key lessons that are coming out of that. So one is that particularly when we're looking at distributed technologies, sustainability is a really big issue. So a lot of schemes that have been deployed in the past have achieved good results up front of increased connections, which of course is the thing that they're trying to achieve in the first instance. But those results have then maybe not been sustained over time. So when the valuations have been taken, have taken place several years after the scheme was rolled out, people have perhaps lost access to energy, maybe companies that were delivering the services have dropped out the market, maybe the maintenance provision that's in place was not sufficient, maybe there's not enough customer service presence in place. And then those cost of service differences that we were talking about earlier have persisted and there hasn't been the provision in the market to address that persistent gap. Now, we've got a lot of results-based finance schemes that have been introduced over the last few years that again are achieving good results up front. And I think it's far too early at the moment to really understand the extent to which these issues have been addressed with those, but it'll be interesting to see over the coming years to what extent these issues persist or whether they have been tackled. I just want to have a look quickly at one of the lessons from elsewhere and this is looking at an on-grid electricity system and it's looking specifically at Thailand. Now this Thailand example that I'm going to talk through quickly is repeated really in on-grid electricity systems all over the world in developed and middle income countries. I'm just picking the Thai example just because it's particularly transparent and easy to understand. In Thailand there were two different distribution companies, one for the urban areas around Bangkok and one for more rural areas. And this huge cross-subsidy that takes place from the urban distribution company to the rural distribution company every year. On top of that, there is a funding mechanism for free electricity to the leasewell of consumers. Now without getting into the merits or otherwise of these specific policy measures, the point that is really important to take away from this is really that it's primarily funded by consumers and cross subsidies. So this is moving about $350 million every year around the system, most of it just consumer money to deal with these persistent cost of service differences. Now of course we can't just lift this model and drop it into sub-Saharan Africa today. One of the many reasons why off-grid electricity systems are being used in such a way is that the utility systems in many of these countries are broken and not credit worthy. But we can use the model we've just looked at, we can think about that as a target model and then think about how we might step back from that and evolve towards it over time and how the funding sources might change. So acknowledging that on day one, most of the funding would need to come from the likes of donors. Over time, governments might step in to take a greater share of that before eventually moving towards something that is self-funding and sustainable and funded by customers themselves. So I know that I'm just about out of our time, so I'm not going to go through every single one of the policy recommendations in detail, but I just want to highlight two really key points. The first one is the sustainability point and the idea that we really need to make sure that we're clear on what our subsidy is trying to achieve or market design intervention is trying to achieve and how it's going to sustain results over time. So the idea is that probably means it needs to be systemic, it needs to be a standardised as possible and we really need to think about how we're going to scale results to bring in two forms of funding as well. And then the second point is really thinking about where we can draw lessons from elsewhere and not reinventing the wheel where we don't need to. There are also rules that we can draw on from elsewhere in the energy sector, but also of course out from other sectors as well. So you can get a lot more detail in the papers that have been published on Tear Funds website and do of course get in touch with us if you have any questions on that and I look forward to questions during the Q&A shortly as well. Thank you. Thank you for the very clear picture and nice overview of designs and means of delivery of energy subsidies. I would like to hand over to Nipunika, who will give another view on subsidies. Yeah, thanks Stephen and hi everyone. So what I'm about to present next really builds on some of the discussion points that Stephen has already made and looks a bit deeper into some examples that that we've looked in this particular research. So just to start with how we started this work. So in order to unpack subsidies in line with the discourse and how subsidies are currently being looked at. So with support from he was developed this discussion paper, particularly looking at demand side subsidies that aim to reduce cost to the end users and supply side subsidies that aim to reduce cost to the energy supplies who want to enter remote geographies on new markets. It is well known that subsidies on its own is not the silver bullet. It is an instrument that is heavily dependent on already scarce public finance. Therefore, commercial finance has a significant role to play. So this paper also aims to highlight some insights into how commercial can finance need is needed and how it can play a role. And this diagram really, really links to what Stephen mentioned earlier on how we need subsidies and why we need subsidies. And it also builds on several recent publication that aims to present how markets can be segmented based on affordability gap which in this diagram increases as you go from top to bottom and commercial geographic reach which reduces as you go from left to right of the diagram. The SS and the DS here indicate where supply side and demand side subsidies are more suitable depending on these two conditions. However, in reality, this is not always neatly segmented like this. There are overlaps between different affordability groups, living in a specific job in one geographic location, and the economic conditions shift constantly. So to, we will discuss this more in the next, I will discuss this more in the next slide as I go deeper into the Nepal case study. So to look a bit deeper into how demand side subsidies have been delivered, we looked at Nepal as a case in point. Nepal has been delivering subsidies since the 1970s. And there has been commendable commitment from the government national government in terms of allocating public funds for decentralized renewable energy subsidies, establishing a dedicated institution called the alternative energy promotion center, which led subsidy mobilization where donors could also come in and pool finance and align technical assistance support has also created quite a strong enabling environment with dedicated subsidy policies. So while we discussed quite in quite detail in our publication as a case study, I wanted to highlight three key lessons that we found here. The subsidy policy in Nepal define subsidies based on remoteness and included and it also included included an additional subsidy for specific beneficiary groups, which included groups such as the Dalit community who are often disadvantaged as the lowest cost across the country. These two diagrams shows results from a sample survey carried out as part of this research. They indicate that despite having an additional subsidy. Dalit communities were still at the bottom of access levels for electricity and clean cooking, compared to more affluent and higher cost groups. The results give some indication into when subsidies are allocated with restricted program timelines and with sort of a blanket subsidy that allow anyone within a certain geography access them. It can still exclude the most marginalized communities. Secondly, having systemic processes for quality assurance for technology verification or technician verifications qualifying companies really helped at the start to create a strong market for various intermediary technologies. However, complexities of these processes and delays eventually created various bottlenecks. So for example, energy companies ended up increasing retail price to end users to cover high administrative costs, or the delayed payments, if impacts of delayed payments, the sort of defeats the purpose of a demand side subsidy. While various steps have been taken over the years by in Nepal to address these issues. Identifying this risk sooner with periodic assessments could have potentially help mitigate some of these negative impacts on the ongoing programs and also weaving it better into newer programs. And finally, Nepal has benefited significantly with long term donor and government funding for subsidies compared to Sub-Saharan Africa. Nepal has contributed to creating a market with many local companies. However, it eventually also became very highly dependent on subsidies. For instance, some energy companies really struggled to survive following reductions of donor funding that was going into subsidies. Moving on into supply-side subsidies, we also looked quite closely at emerging lessons on resource-based financing or RBF as it's commonly known now. And it's becoming a very popular tool, particularly in Africa currently. It's focused mostly on geographic targeting. In the report, we present several lessons from end-of-RBA facility and recent programs such as the Kenya Off-Grid Solar Access Program. But to share a few key insights, RBF is indeed a very important financial tool to activate new markets. But alone on its own is not sufficient to establish long term market viability. It requires backing from affordable commercial finance where companies can rely on to pre-finance their products and services until RBF gets released to them. It has the opportunity to improve quality assurance, but there are also risks similar to what I mentioned from Nepal that could affect delivery. Most companies who have so far benefited from RBF are larger international companies with very strong track records and finance to expand to remote geographies. So if you want to unblock finance to smaller local companies, there is a need to really combine this with technical assistance support and even to look back at some of the processes such as qualification processes of companies and making them less stringent. Finally, we know that RBF is a market enabling instrument and is not often intended to reach the poorest communities. But there has been some really interesting examples that's been coming out from the piloted schemes. For example, in Malawi, RBF has been combined with a demand-side subsidy to target much in those communities. So moving on into some of the key recommendations there that came out. So lessons in this study so far really indicated to us that there is a huge need for better targeting. Because if you understand who needs subsidies the most, you can combine a mix of financing instruments for different end users based on their affordability and the context they come from. For this you need to define better, but understanding the context and the end user needs and to develop appropriate subsidy delivery mechanisms that don't exclude marginalized communities require more effort. Different end users have different marginalizations and they face different challenges when accessing finance. For instance, the Dalits in Nepal tend to migrate more frequently and this might have affected their ability to provide identities or certain types of proofs that are needed to access the subsidy. So for this, the elephant in the room is sort of data, the availability of data. Data often becomes a significant bottleneck when designing financing instruments. But there are different approaches that are already there to address data gaps. For instance, participate in localized planning approaches are key to co-generated to be to be able to co-generate data with local communities and local stakeholders. For instance, in Nepal, the FCDO funded Nepal renewable energy program is currently working with provincial level and local level governments to link with existing planning mechanisms. And local governments in Nepal already have and have been using a participatory planning approach every year. This provides an entry point to integrate energy into an existing mechanism. IID is working with various partners using the energy delivery model planning approach to engage with communities to understand their priority needs, build ownership and develop solutions that are tailored to the local context. The solutions eventually include delivery models and financing options specific to target groups. So collecting data using such tools can be a bit exhausting and it's expensive, it is time consuming. But what we see is that investing upfront in these type of approaches can really help to avoid failures and unintended consequences that could rise in the future. And at times you don't even need to reinvent data. The Malavi example, the RBF Malavi example for instance really showed that there are existing data options that you can use in Malavi. The RBF program is the government's social cash transfer program to target marginalized communities and it did it quite successfully. Secondly, identifying and managing risks early is critical when deploying time bound financing schemes. So just to go, I've touched upon these in in the past slides but just to very quickly look at one of them. So lack of end user awareness was raised as a potentially a very strong barrier that might have avoided marginalized communities such as Dalits to access subsidy related information and eventually benefit from them. Another benefit of knowing target groups better is that you can develop a mix of financing instruments, more affluent households can benefit from credit based instruments. And there are some examples that we have presented in the study such as work by UNCDF building partnerships and providing technical assistance to commercial banks, energy companies and microfinance institutions to provide end user credit. And finally, just to wrap up the presentation, we really looked at the need and the importance of commercial finance. As it is a challenge, it is an area that needs a lot more effort and understanding that is limited success stories and countries like Nepal are still struggling to blend in commercial finance into decentralized renewable energy. But we know that as donor funding is being more threatened due to issues such as the pandemic and global politics. This is really an area that needs further effort. I'm just going to end it here. This sort of gives an overview of some of our key publications. I'm just handing over to you, Rita. Thanks a lot. Very good overview of key lessons, best practices and good inspiration for the rest of the event. Now that we have listened to the presentations, I would like to invite our panelists to respond to the findings by Nikonika and Steven, based on the challenges and opportunities of public funded subsidies from each perspective. And each of the respondents has about three to five minutes to reflect on the presentations and findings. And I would like to ask Satish from Nepal, can I start with you? We know that in Nepal, government has always contributed significant proportions towards decentralized renewable energy subsidies along donors and is continuing to put more funds on subsidizing, minigrazing cooking solutions. Having listened to the lessons and recommendations highlighted so far, what lessons are useful for Nepal going forward? What, for example, might be useful for new frontiers in Nepal like clean cooking and productive uses of energy for some of the poorest? Thank you, Rita. And thank you, Nikonika and Steven, for your nice presentations. Let me trace back a little on how the subsidy mechanism in Nepal evolved over the years. And as Nikonika mentioned, like it started in 1975 as soft credit for agricultural, through agricultural development bank, basically for, you know, milling purposes, migratory was developed for milling. It was only in the 80s when the government de-licensed power plants up to 100 kilowatt. Then people started putting up migrators for electricity generation. And then the following year in 1986, the government started providing subsidy, 50% of the cost of electricity generation and distribution. This was basically to encourage electrification through these existing water mills. After that, a lot of innovations were seen in Nepal, like the local companies, local innovators, they came up with different designs of power units. One multi-purpose power unit was very famous and then they started using induction generator as, induction motor as generators, brought the technology for electronic load controllers and so on. And it went on for about a decade. And then the market kind of saturated and the government started using subsidy, this subsidy that was allocated for migrator for solar home systems. It was only in 1996, the apex government body called Alternative Energy Promotion Center was established. And then the subsidy and credit kind of separated before it was handled by agriculture development banks. So subsidy and credit were together. They were processed by the same personnel. When subsidy and credit was separated, it became very difficult for rural people to, for timely financial closure of their projects. It used to take years to come up with the fund, total fund, because subsidy only covered 40, 45, 50% of the total cost. And the project cost over and there were delays, some projects were like half completed and then they had to wait for years to complete it again. And so on. And what we found is that in a recent study carried out in two provinces of Nepal, that more than 90% of these projects are still operational. They are providing electricity but the quality of electricity and reliability is very poor. Because the people did not, could not make financial closure on time like they were using local materials, local laborers and you know local hardly skilled people to build canals and using like untreated wooden poles and so on. So, from Nepal's experience, what we find if you look at these micro hydros is that in it really depends on the community, communities past experience the communities capacity, financial capacity, also capacity to manage the conflict in the community, etc. is directly correlated to the condition of the power plant. If the community is well off you'll find the power plants are better run because operators are better paid. And there might be opportunities for productive end users in poor areas the opportunities for productive uses are very limited. The tariff rate is very low operators are not paid properly so they run away and there's high turnover of operators, and so on. So going forward. So, in Nepal now because mainly because of the rapid extension of the national grid. Over 95% of the population has access to electricity so those people who are left are like really in remote areas or they are under the grid very very poor people and these people definitely need subsidy not only subsidy but also a lot of technical support to be to be able to have access to electricity, both for lighting and for cooking also. Thank you. Thank you Satish. This is very insightful. I just name a few of the things you mentioned, because I think they're very interesting. And on the other sectors like the agriculture sector finance experience community capacity and as well as like subsidies as well as technical support in their combination. Just to keep in mind. Yeah, then we move over to Linda Linda. I'm a Canadian energy company and in all great solutions mainly. So can you explain a little bit more of what the role is of small businesses here. And what resonates with you, based on the presentations in terms of challenges and opportunities you face when accessing subsidies, like RBF and accessing finance in general. Okay. In terms of the challenges that we face as local businesses. The biggest by far is finance challenges and most small local companies do not have a not properly resourced, and they don't have the finances that would enable them to you know, take, take advantage of some opportunities that are offered in terms of, you know, like results of this financing. We have a program that's currently running the Kenya off grid solar access program course up, and it offers suppliers side incentives to encourage distributors to go into, you know, counties some 14 counties that are off the grid. And if we look at these counties, you know there's possibly populated very vast and the population there the people that live there are very poor so it's very expensive to go into those areas and unless you have other resources. It's very difficult for local for local business to, you know, even take advantage of such opportunities. And therefore, they tend to agree with the, you know, the previous presentations that they tend to favor the larger organizations that, you know, are most of the time foreign are better resourced have other grants, possibly other, you know, contributed to that would enable them to top up and go into these counties as opposed to local companies. The other challenge is the technical capacity a lot of local companies, because of the financial challenges they have they also don't have that's, you know, and they cannot afford to hire top talents in terms of capacity building to offer that kind of technical support that they may require. So that's another challenge that we face on the supplier side I see a challenge even with the with this subsidy schemes because the current scheme, the course of scheme that has been designed targets, you know, those difficult to reach counties and it so happens that they're the counties with the highest poverty incidences so you know as high as 80% in some counties and targeting only supplier side incentives and not offering demand incentives really is a difficult balance because these people already don't have the financial means to pay for these products and we have, you know, like there's a category that I like to define as hardcore poor where you know people that sometimes even have only one meal a day such a person even with incentives and you know even if you give them interest free loans, they cannot be able to pay and it may, you know, give rise to the concept of probably they they require freely distributed products. How that can be done is another discussion that I believe local governments can come in and support in such cases. So, in terms of the opportunities that exist. So, you know, I would say local government supporting the extremely poor people that cannot afford products. We also have this extremely poor people in counties that are not classified as costs up so other counties that if you look on average people you know a wealth here but there's that portion of people you know that cannot afford so they are remote potential markets but they still have poor people we have people in informal settlements or extremely poor families that may need demand side subsidies. There's also more opportunities when it comes to partnerships. So I would say partnerships between these larger organizations that are better resolved with the smaller last mile distributor companies that have better local networks and can easily access this last mile counties without much requiring a lot of money. Also opportunities between you know other organizations such as local NGO that may already have networks local networks in this difficult to reach places and they can support with that. We currently have the course up to which is the second round of the result is financing. That's going on which is also aimed at it's an improvement of the first one this one is aimed at encouraging more local companies to take up these opportunities so the barriers have been significantly lowered. And there's an incentive to encourage you know initially even before you start claiming the results based financing there's an incentive to go into those markets so there's a there's a portion of the financing that has been made to incentivize local companies to take up this opportunity. And I believe there's also an element of more public finance, which may be both, you know, in addition to government may be larger local corporates. That's, you know, may have additional finances to being able to support these markets with, you know, supporting both the supply side and the demand side subsidies so through probably CSR opportunities where they can take up part of the costs and offer them. So the product cost subsidies that may be required for the extremely for people. So, I would say in a nutshell, that is from my experience. And it's a difficult market that we operate in as, you know, suppliers of these energy devices, because the cost of operations are really high and just, you know, operating in a market. The deal market scenario may not result in this organ in organizations being financially sustainable. And, you know, commercial financing may not be attractive where companies not making money. So, that's also part of the discussion. It was very good to hear your on the ground experience, so to say, and it's a pity that we short of time because I think you can go on and on and explain all kinds of things and it's very good to that you like paint this picture. And while it's good to hear the challenges as well as like new things that are developing like the course up to which you explained. So that's good news. Then I would like to hand over to Daniel for Daniel from and that from East Africa, Daniel, you are working with many many great companies delivering energy for all. So what lessons from Nepal are useful when thinking through subsidies in the countries that other members are operating in and how are the financing context for energy access difference over to you. Yeah, thanks. Well, maybe just to give a bit of perspective on, you know, basically the mini-grid sector, you know, in Africa and Bangladesh across the continent. You know, we are essentially looking at a fairly new industry, possibly, you know, five to seven years away from what the solar system sector used to be. You know, currently, you know, average revenue by users around just under five dollars. And also we are looking at lower consumption. So, you know, in average consumption across the continent is about six, six kilowatt hours per month. Essentially, that already tells you that, you know, the typical customer base mini-grid operators is servicing. This is, you know, possibly, you know, a really remote area where the grid is, you know, years if not decades away from arriving. But there's a lot of support in terms of incentives that, you know, African governments and, you know, with donor partners can play within the mini-grid context. We've seen a lot of progress within the RBF, you know, programs. But I think for where we're looking at in terms of the mini-grid model, there's, you know, another step the, you know, governments can go and in this case you're looking at a possible subsidy on the per kilowatt hour pricing, which is, you know, the tariff in which the mini-grid operator would charge the consumer. So we're looking at a situation where a lower, you know, kilowatt hour pricing can stimulate demand uptake from the consumer. And this, you know, this is not something that, you know, is new, but I think in some markets we've seen some prototypes being tested. I can give an example of Tanzania where, you know, one of our partners, Crossland Innovation Lab has been testing prototypes around how a lower kilowatt hour pricing can stimulate demand. And we've seen, you know, up to in some cases three times the growth in demand from consumers. So we are seeing a situation where consumers are really price sensitive. But also I'm seeing a situation where governments can support from the area of financing appliances, because a lot of these communities are, you know, rural and dependent on agriculture. So those types of agricultural inputs or assets that can actually consume with the energy the mini-grid provider is providing would go ahead and increase in both increasing consumer incomes, improving the quality of life, but also increasing load, which ultimately also benefits the mini-grid developer in terms of revenue. I think those are some of the situations I see. But also the other area that the government can support, not only in terms of the funding side is also around the issue of regulations because the regulatory environment in some ways may inhibit unlocking those types of capital. For instance, we are seeing in most markets it takes, you know, I mean an average mini-grid company up to a year just to achieve regulatory compliance. And in some cases they are in danger of missing out on the funding deadlines for some of these RBF facilities. So, you know, lowering that operational and administrative bottleneck in terms of licensing and approvals that can go a long way in terms of unlocking more capital for some of these projects. Yeah, I think I can stop there for now. Okay, thank you, Daniel. And thank you for bringing in a few other perspectives as well, like regulation, national government and energy prices. So I would like to hand over to Dana, our last speaker. Dana, the World Bank is exploring and putting forward funds for both supply and demand subsidies. And the discussion definitely shows that subsidy design is complex, but they are essential to reach everyone. So what are the key highlights you would take back from the discussion today and what can the bank do more to promote the use of subsidies. So over to you. And thank you very much for this opportunity. I will have to ask my daughter to be quite sure. And I can go. So, thank you. It's, I have so many insights that I'm taking from the discussion that it's, it's almost hard to know where, where to start. So thank you to Steven, to Nipunika, and as well as to panelists for these really useful insights. I would start by saying that it's incredible how much this discussion has moved that we had the, I think, as Steven alluded to it we had this discussion four years ago we would have, we wouldn't have this discussion because it was almost a bad word to consider and no one wanted to touch it. If we had it two years ago, we would have a very opposing view and fierce fights and you have it today I mean it's, it's almost to say it's getting a little boring because I think there's a lot of consensus that is being reached and a lot of agreement and I would also say it's getting more interesting because you know discussing if and when but we're discussing really how, how to do it in a way that these subsidies really are effective and reaching ultimately everyone and helping achieve the universal access. So maybe just, just starting few things that I found very interesting I found Steven's presentation, very, very useful in terms of bringing this, this larger picture of subsidies and, and I think what is important you know we sometimes are so much lost in the present that we forget the past and what he brings back is also the discussion that actually I remember when I started in an access space about 20 years ago there were a number of papers written about subsidies and cross subsidies for the poor by the time everything was focusing on the grid because the grid was basically at that time almost the only way how to how to how to reach people and everything was focusing on grid electrification but there are lots of examples that come from that time that could be used for off grid as well but there's been quite a bit of shyness to apply these principles to off grid electrification and partly for good reasons but partly also due to misconceptions and one of them has been that you know when the off grid solutions came in there was just a lot of enthusiasm because suddenly for the countries that have not been able to expand the grid like most countries in Sub-Saharan Africa there was an alternative there was a solution that was modular was cheaper and I think it was just a lot of believe that the solutions in the markets actually will reach everyone. What's happening is that we now know that this this is not happening and this will not happen the markets on that on its own are not going to reach everyone and therefore there is a case for subsidies but there is also a legitimate concern about large scale use of subsidies in the off grid sector and this is as Daniel mentioned I think in the minute with sector and it was the first one that has moved into embracing the need for subsidies because without subsidies the price to the consumers is just it's just too high and so this notion of viability funding or performance based grants that are needed to reduce the investment cost is very much accepted but in the standalone off grid sector the problem is that it's more it's more complex actually because it's based on the company selling products to the household whether they sell them on cash basis or through face you go you still you still you still selling them and if suddenly a program comes whether it's the government or donor this basically reducing the prices for these products for some households, especially if it is sort of subsidy that is targeting to reduce the cost of these these products for some households the other households may stop paying for the product even though they can afford them so be a little careful that you know in the end the subsidy programs do not end up slowing down the pace of electrification, but rather increasing it especially if there is just not enough money to subsidize everyone, which often is the case and if the subsidies may be short lived because then you know what happens when they when they expire and for this reason I think what we have seen up to up to now is that of good sector has much more embraced supply side subsidy as well, such as result based financing as I have been mentioned the World Bank has been building up the financing schemes for off grid solar and providing enabling working capital for for the companies and I was I was very relieved to hear from Linda that you know the second round of cost which is well bank funded program has actually implemented a lot of lessons learned from the from the first round and it's more accessible to local companies, but but the focus has been on on on eliminating the supply barriers. And that's that's a part of the story. And it is an important part of the story because if the products are not even available in the area where people live of course they cannot get it and they're then they stuck this either low quality products or kerosene or other things so it's an important step but it's not, I agree. This is not enough and in fact, in the in the research to be published this February in the of good market trends report we have estimated that to achieve universal electricity access by 2030, the upgrade sector will need to serve over 600 million this at least tier one product. And we have also warned that if a combination of supply and demand side subsidies is not available, then some 230 million people will not be reached either because they live in a remote locations that are too expensive to serve, or because of the affordability constraints and in many cases actually the because of the two combined constraints at the same time. I don't remember this was this research was done before COVID so now if you, if you add impact of the COVID but this number will be much larger, especially since it's estimated that you know that COVID could push as many as 150 million people back to extreme poverty. So, to reach everyone this affordability issue has to be resolved and demand side subsidies will be needed. And the question is how to design them so that they really are helpful, rather than harmful and it is something that really is something we are looking into and we are very happy to work with everyone who is, who is involved in the, in the similar research. I know I have to summarize so just quickly. I think what we need moving forward is to, is to do this right build more understanding and more evidence of what works and why and this is why the research by Nipunekata specifically looks into, into one country's team is so useful because it goes into those details that I needed to understand what worked and what didn't work and why and sometimes it's what design is the implementation issues, sometimes it's what's missing. Not just what the, what the, whether the subsidies were designed or not. I think second, we need to sort of get away from this silos how these subsidies sometimes are designed to offer people trying to figure it out on their own clean cooking on their own great minute rates and try to come up with help government to design the schemes that actually can work across different technologies for and this is where I thought that the students research was pointing in the right direction. More, more examples on the ground. More, more, more real examples and evidence and learn from that how to target especially how to target the men side subsidies. The key issue of the men side subsidies is targeting and if they are mis targeted they can do more harm than good so how do we actually learn how to use the data that exists as we discussed today, how to improve the scheme that exists to really get this targeting right. For something we need to look at innovative way into sustainable sources of financing for subsidies, you know, impact bonds could be explored more. The research that we have just published on clean cooking we have come up with the estimate that the combined health, gender and climate externalities cost 2.4 trillion dollars every year. So, you know, how to, how to monetize these benefits how to get sustainable funding out of basically these externalities is another area that that could really open up many, many new avenues and I think this is we need a good coordination among everyone who may be developing the subsidy scheme so that we don't undermine each other so so so thanks a lot for this for this forum because that's exactly the way to get there. Thank you Dana. Thank you for all your, your nice recommendations and overview of the challenges and also some history. So we discussed a bit but we would like to skip the second poll because we are a bit short in time and we would like to provide some time for questions from the audience. So, if all the panelists could turn on the camera and then we have quite a bunch of questions and if you have still have a few you can post them in the Q&A box. And I would just like to start from the beginning and you can vote them up, but the first question has quite a number of votes as well. So this is on cooking and knowing the big gap for clean cooking. I think it's, it's good to start with cooking. And the question is from Martin Price, saying, could you say a little bit more about the design of good subsidy programs for clean cooking specifically, and it's addressed to Steven. So Steven, can you answer that question. Really, and I'm certainly don't have any silver bullets on this. I mean, of course it's no, you know, the reason why there's of course a much bigger gap with clean cooking is because it is such a complicated area and then, you know, it's much more complicated than say a simple, relatively simple grid electricity system, for instance, where with cooking you have so many different value chains and you need to think about the existence of traditional biomass value chain thinking about in the markets, LPG and gas value chains, you need to think about the interaction with the consumer and so on. So there's so many kind of interacting parts and it's in many ways I think much, much more complicated than electricity. Well, I would say from the examples we looked at is it again illustrates some of the challenges, though, that I talked about. I mean, we talk about, we looked at examples in Nepal and in India on a clean cooking side, and I'd be interested in that Satish has something to say on this, but in India, for instance, who saw subsidies for LPG stows in the first place, but then you're not really thinking about the sustainability again, and the subsidies for the fuel itself over the long term. So again, we've got essentially affordability gaps that may persist for some time that they were not properly addressed by subsidy scheme and it'll be interesting to see how the results from that scheme kind of evolve over time, especially in light of the economic challenges being placed now. But I would say one thing on what we could do. It's very difficult to start saying in the clean cooking space to really define what the system is, you know, a grid you can draw a regulatory ring around and define the set of regulatory and commercial arrangements to try and get the money into that system. With clean cooking, it's much more difficult to define the boundaries of that system. But I don't think it's beyond our sort of collective abilities to work out where we might draw that family. So how we define a set of regulatory and commercial mechanisms to get the money into that system. So think of the nuts and bolts you kind of think about it in the same way, but you know, we're a long way from cracking it. So it's a collective responsibility. So everyone would like to move over to a question from Johanna Galan. Again, sorry, for Stephen again. So you can continue. How would you envision a cross subsidy to work in contexts like Africa but operate solar is targeting very low income and utilities already under immense financial pressure and what could a long term model look like in your view. So it's a great question. And I think in my presentation, I sort of acknowledge that you certainly can't take the tie example that I was talking through, for instance, and just drop that into sub-Saharan Africa. It's not, it's not getting to work for precisely the reasons that Johanna highlights. So what I'd say, and I certainly don't intend to have all the answers on this either, but we do know from other sectors and from things we've done in the on grid electricity sector, for instance, generally how to create sort of credit worthy entities and to tackle specific problems that sit behind that credit worthiness and tackle them with the different financial instruments and so on and insurance products and all the rest of it that the advice have available. So it's simple and of course it varies from country to country how deployable some of those instruments are. But I would say that at its heart, we kind of need to find a way of perhaps creating some sort of separate vehicle that can be used to administer subsidy to achieve energy access goals. So it might be sort of, it might be regulated, but it might be at arm's length from government and the source of funds that goes into that vehicle will evolve over time. So as I was saying with the phased approach in one of the slides, you would move from a situation that initially is very much dependent on donor funding, but eventually has that target model in mind. And in some countries, you might get to that target model quite quickly. It might be on decadal timescales in other countries, particularly in some of the subjects. Okay, thanks. I would like to move over to question from Christina singer. I have a feel like answering. She says, I would appreciate the discussion around what is lacking in getting the commitment of public finance, national budget and donors to the policy and budget if necessary for subsidy subsidies to close affordability gap. So I would say Daniel and Nipunika maybe. I think for where I look at things is in some governments, I think there's still like a philosophical, you know, argument to be made around the need for, you know, utilities 2.0 in that, you know, decentralized grids are actually the grids for the future. You know, in some cases, you know, some governments might still want to, you know, electrify parts of the population, you know, the population with, you know, the public grid. And we've seen a lot of pressure in some countries where, you know, the public grids are really pushed further and further into areas that are really deemed non commercial for the type of infrastructure they have. And I think in that regard, you know, there's a role for, you know, both private sector donors, you know, you know, other partners to, you know, to try as much as possible to push, you know, focus around national education planning to be, you know, all inclusive in terms of all technologies, having sort of a least cost approach where, you know, you know, a given community will only be electrified, you know, basically using the technology that is, you know, cost efficient for that, for them and, you know, for the dynamics of that community and in that regard, you know, maybe that will also see a situation where public funding would be efficiently allocated because right now, you know, the, you know, when you're talking about for public funding we are in some cases, you know, these, these amounts of capital looks look massive but if you actually want to, you know, use an integrated, you know, least cost planning approach, you know, in some cases you'd find, you know, you know, it might not be as high as initially thought using a centralized model. I think on the, on the second, you know, question around RBS. I think ultimately, you know, most of the, you know, RBS should be focused around scale, at least, you know, where we see it from the mini grid side of things, because we are at this point in time most, most mini grid companies, you know, might be, you know, might be at break even but in terms of, because they actually, you know, have few sites, you know, from their, you know, from their larger portfolio, they're still non profitable. So, creating, you know, RBS can be a true large, you know, you know, moving companies from building, you know, you know, hundreds of sites a year to thousands of sites and in that case you reach at a point where, you know, commercial investors can actually see, you know, a quantum of assets they can actually refinance because at this point in time, you know, most of the investors feel that, you know, the ticket size would be too small, depending on, because the sites are also very few and also fine between. And so there's a need to, to increase the deployment rate, if I must say, and also, you know, the challenge, you know, aligned with that is, you know, some of the programs actually take quite long so that the lag in between, you know, is structuring some of the programs to actual deployment and actually targeting the deployment to move to more capital allocation to actual projects rather than other aspects of projects, you know, like regulations and others which also are important but also ensuring that that efficient allocation is quite key, if I may say from a minute perspective. Okay, thank you Daniel. I'm afraid we run out of time so we can't have the other panelists responding and do more questions although we had quite a nice set of questions, but that is promising for a continuation of the debate I would say. So I would like to wrap up by thanking all of you, the speakers, the presenters as well as the participants and all the interesting, proposing all the interesting questions for your participation, and I think it was a very fruitful exchange. And it's very promising to continue this discussion and to try to put our words into practice and see in the coming time how we can change things. So we did have a second poll so if you're willing to and you still have time you can take the time after I have ended the session by filling it in. And with this I would like to thank all of you and see you next time. Thank you.