 So, warm welcome everyone to today's session. This is a SEI webinar on the role of risk mitigation in renewable energy in Southern Africa. And my name is Carly Veys and I have the pleasure of welcoming you all to this webinar today. I work at Stockholm Environment Institute's Finance for Sustainable Development Program, and I will tell you more about that shortly. So today we will be discussing the role that risk mitigation has in renewable energy investments in Southern Africa. And we are also celebrating the launch of a new report called the Risk Mitigation and Transfer for Renewable Energy in Southern Africa. And you can shortly find the link to the report in the chat. My colleague will share it there. So not only is the risk, so not only is the issue of risk mitigation an important topic, but it is also an area gaining interest from various sectors and actors. And I believe that is made very clear by the almost 200 people that have registered for today's event. We'll see how many join us today live. To help guide us through today's topics, we have my colleagues, Daniela Mikkel, who are the researchers behind the report, and they will shortly present the study and share their findings. If you go back one slide, Daniel, just to the agenda, you've already seen it, but yeah, just to get an overview, we'll first have the presentation by Daniela and Mikkel, and then we'll have a panel discussion where we'll be joined by Dan and Judith and Vikus. And then lastly, we'll have a proper Q&A session. And I really encourage you to ask questions in the chat, and then we'll pick up as many questions as we can during the Q&A session. And now, jumping along, yeah, you've already seen this quickly. Oh, you can go back to the panel slide, thanks, Daniel. So just briefly to introduce who's here with us today to speak, we have Dan Croft from IFC, one of the leading figures behind the World Bank Group Program, Scaling Solar. We will also hear from Judith Raphael, who leads the work of Get Fit in Zambia. And last but not least, we also will hear from Vikus Kruger, who is one of the most prominent researchers on renewable energy in Africa. Before we jump into today's topic, I would like to briefly just explain who we are, and by we, I mean today's organizers. So next slide, please, thank you. So Stockholm Environment Institute, known as SEI, it's an international non-profit research and policy organization, and SEI tackles environment and development challenges. And we do so by scientific research, public policy advice, and capacity building. We have nearly 400 people working with us in 10 offices around the world. Thank you. On this slide, you can just get a little taste for all the various topics within environment and development that we work on. And you can, of course, visit our website for more information. And as I mentioned previously, I work with Finance for Sustainable Development Program. And the goal of the program is to accelerate finance flows to sustainable economic activities in developing countries. And our focus is on practice-oriented research. And our belief is that finance flows to viable projects. So more focus is needed on drivers of viability. Yeah, with that, I would like to hand over to Daniel and Mikkel, my colleagues in the program. And we would love to hear more about the work you've been doing and your findings. And maybe just to kind of round off my part, I would just encourage those of you who have questions in a clarifying sense, like if there's something you want clarified, you can write that in the chat during the presentation as well, and we'll try to catch those. Well, thank you, everyone, fun that you're all here. And over to you, Daniel and Mikkel. Thanks so much, Carly. Thanks, everyone. Welcome to our webinar. So nice to see so many of you. Many of you helped us with the report, so it's great to see you again. We all know that there are high expectations around private finance contributing to sustainable development, flowing into projects with sustainability relevance in developing countries. And we all know we've all heard that risk is one of the most important barriers to that. So these things are known. But what we wanted to do with this project is to get a more concrete view of how this issue of risk plays out for the people who actually try to get projects financed and built, the developers and the regulators, the people directly involved with projects. And the reason we want to focus on the project level is, you know, with Mikkel, we were doing a back of the envelope calculation under one of the IEA scenarios. Africa would need, you know, with an average size of 50 megawatts, Africa would need to have operational about one project each day. So even though it's absolutely relevant to have a general view of how things were, we thought it's really important to talk to the people on the ground. So this is why this is mostly a learning journey for us. We gathered, you know, we tried to get people and to ask them looking at completed projects, what made it possible to get to financial close, what combination of risk instruments worked, what's missing, maybe something needs to change. And hopefully we can translate that into some learnings that can feed the policy conversation. And, you know, that's fulfilling our role at SEI Bridging Science and Policy. Right, so the first leg, the first phase of our project, as we like to say, focused on Southern Africa, the Southic region minus South Africa for obvious reasons of scale. What we did is to take all projects that we could find, you know, based on public information that are larger than 10 megawatts, it turned out that all of them were PV. We selected four out of these 21. We tried to dive deep into their financing structure to contact the people who actually worked on them and got them running. And we really thanked them, all the 35 more than 35 people we've managed to interview since the start of this program. And we've also convened a workshop in Zambia and Rosaka in October of last year where we gathered some of them in a, you know, let's say closed door kind of meeting an honest frank exchange of ideas where we really wanted to understand how do you perceive the issue of risk? What do you do about it? What can be done better? And, you know, when we talk about risk, there are so many ways to look at it and so many ways to define it. And there are so many risks involved, obviously, but in a more practical sense for the developer trying to do a project in Zambia, let's say, risk basically means the probability of the value of their investment declining over the lifetime of the project, over the long lifetime of the project. And since we all know in Southern Africa, in the life parts of the continent, the dominating structure is project finance, which means the projects rely on non-request debt, which also means that you need to get lenders to feel comfortable about being repaid and finding ways of getting lenders to have that security of being paid. And when a project is being developed with so many actors, you know, the construction, O&M, everyone involved, there are many risks that need to be distributed among the parties that can compare them, and many of them are distributed through private arrangements, you know, the vast network of contracts that are negotiated and set up. And this is not that different from other geographies, but what remains and what makes the region a little bit, I mean, more than a little bit different and creates persistent risks is the country risk, meaning political, macroeconomic currency, and the off paper risk. Most of these projects rely on a utility that in most countries is weak from a financial point of view. This is why we have this multitude of DFI-led risk mitigation instruments programs and instruments that you see here on the right. And I'm absolutely sure we did not cover all of them. So even looking at this limited number of projects and the programs and instruments that were active or offered in these projects, we see already that there's a multitude of them, which, you know, we'll discuss later also means something. And by looking at these projects, successful projects and the risk mitigation instruments that were used, we see a number of stories emerging. The first story is that, you know, in some of the countries, the complexity of the risk architecture is absolutely obvious. Like you can see that the approach was whatever it takes to get the first project on the ground in some of the countries that belong to this category of least developed countries. You see up there in Malawi, we have the Salimah project, only the number of DFIs involved and the risk instruments used is illustrative. We have MIGA offering a sizeable guarantee with ID support on this private sector window. You see the liquidity of ATI intervening and backstopping the power purchase agreement. You see the viability gap grant from the PIDG and FMO equity investment into the developer. So on top of the policy risk mitigation that Millennium Challenge Corporation did, looking at Mozambique, at Mocuba, we see a similar picture with the Embassy of Norway providing a grant for the transmission line that was then contributed in kind by the by the activity. You see IFC concessional endings, a guarantee from Northlands and again the viability gap funding from the PIDG. So you can see this story emerging. It was about getting the first project in countries that did not have any experience with renewables and achieving that demonstration effect. And I think you could say this has worked. For example, in Mozambique, we now see the pro-LARP program of the European Union doing competitive selection or they already have a project selected. So it could be said that the demonstration effect has been achieved but at the same time probably this is not the structure that you want to replicate around the continent given the complexity and the time needed for closing such complex projects. In contrast to that, we have we have the case of Namibia. You know, the case of one of the few countries that this is the time benefited from an investment grade credit rating. You know, and even if we just look at the picture, it's so much cleaner, it was so much easier to draw. You see a private lender lending in local currency with a guarantee from ProParka that was able to extend the tenor from age of 15 years, so making the debt terms better. But you see an European IPP investing equity alongside local investors and selling through a PPA to Nampower at the time. You know, and even now one of the utilities that think, you know, well, in the region, so, you know, the story that's emerging from here, probably not earth shattering is that yes, countries that have better macroeconomic conditions and where the utilities managed better need a lot less risk mitigation. So the sound management of the utility, let's say, is the best way to crowd in private finance into renewables. And then we have the, let's say somewhere in the middle, we have Zambia. Zambia was the country we chose for our deep dive and we chose it for a number of reasons. Zambia was a testing ground for many of the programs and the instruments that we're discussing, the risk mitigation instruments. As you know, it's been the first country that implemented the Ski and Solar Program of the World Bank Group and Dan Kroff will speak about it later. It's, Zambia also implemented the GetFids program with Judy, Judy Vafal will discuss. It's also the country where the first PPA was awarded by Africa Greenco, which is a model that's being experienced, an experimental model that's trying to create an alternative to the utility PPA, creating a credit worthy off taker that then trades power into the power pool and we'll see how that works. But from our experience in Zambia, the one subject that dominated was the issue of debt. The sovereign default, the IMF package, it was, as I said, dominating the conversation. Maybe we have news about that from, we've recently heard in Paris there's been some agreement on debt restructuring and maybe things are improving, but this was one of our conclusions. In a country that's trying so many things, the issue of debt is probably going to lead to significant delays in climate political infrastructure. So these have been the three emerging stories from our projects so far in Southern Africa and I leave it now to Mikkel to take us through the findings and recommendations. Thank you, Daniel. Maybe before I go into the findings also mentioned in the context of our program, we did this in Southern Africa last year. We're now replicating this research in West Africa in the Coas region. So we look forward to also have a workshop this fall in Accra. So if any of you's work you're interested in West Africa or renewable finance, please do contact us because we're replicating this work. So some of the findings and these are like the big picture findings and we do encourage you to go into our report and you have the link in the chat. So please go there if you want to go in detail on what we mean. There's many pages of this, but basically one of the main findings is risk mitigation and transfer instruments, RMTs for short, they are necessary but not sufficient. So by necessary what do we mean is all the projects we looked at maybe with exception of the one in the media would not have reached financial close without them, even the one in the media. So it was a necessary ingredient for them to happen, but it is not sufficient. They are not enough for instance for new projects to reach financial close in under current situation, as we will hear for instance from the get fit case. So then they are definitely not enough to overcome the current debt issues. We also found that RMTs have been very effective up to date, we don't know what the future brought up to now, they have been very effective in the operational phase. So those projects who got underground and got operational with RMTs their investment value has been protected so far through the use of RMTs. We believe mostly through a hollow effect from what we have heard, but again they have limits to what they can achieve. So RMTs are good at pushing good projects over the line. They definitely do not push bad projects, which I think is a good thing because we don't want the bad projects to come through. So there are in some cases there may be negative effects on the public finances of the countries due to currency issues and to the issue of guarantees and liabilities, but overall once we take the pros and the cons, we read the conclusion that so far RMTs, the way they're designed, they do not lead to moral hazard, even though they may be perceived as not creating incentives to or disincentives to reform for utilities. They also are in all cases we saw and accompanied by all these side measures to improve governance and capacity building, which basically offset those potential negative effects. So we read the conclusion that they do not lead to moral hazard. We also offer four high-level recommendations. The first one is we need to make it work under that distress. So we have an urgent situation both for climate change but also for the needs of development and energy in the region. So we do need those projects to come online originally. We also have a reality on the ground that is we have that distress and we have many countries which the public finances are suffering and particularly the issue of guarantees, renewable energy projects in the region will not happen without public guarantees. So we do need to make it work. We do need the guarantees to somehow happen under a dead distress situation. Now how that happens, we don't know, but one specific proposition we do is when there is a debt restructuring package, do make an explicit clause about what's going to happen to guarantees for climate critical infrastructure. And what the clause is is not as important as the fact that it's there and explicit because otherwise what happens is this introduces so much uncertainty into the financing of the projects that just spelling this out takes a couple years and this all this time is lost. So recommendation number one actionable recommendation include explicit clauses addressing climate critical infrastructure guarantees in the debt restructuring package. The second big issue as everyone who follows the issues knows is currency. The currency exchange, renewable energy projects in particular, they are very capital intensive. They are hard currency. The equipment is bought in hard currency. So we do have a currency issue, the revenues and a long stream revenue in local currency. So the currency risk is critical. There are as many as we saw from the meeting in Paris and other initiatives, the Bridgestone initiatives and others. This is something that is in the radar in the international agenda how to deal with currency. We come with the proposal that let's create a currency safeguard. So the same way that DFI's have social safeguards and environmental safeguards, let's create a currency safeguard. Let's create a safeguard that ensures that if lending in hard currency is detrimental to the development mandate of DFI's then let's do something about it. So what we ask is for DFI's to create a protocol and these protocols should be particular to each DFI according to their own way of operating. But let's create a protocol for a currency safeguard that establishes at what threshold lending in hard currency is not acceptable. And when that happens then please do not stop lending. We do need the lending but let's make sure that the currency burden is shared as so either through subsidized by the DFI's or sharing some other mechanism and we make some proposals on that on the paper. Again we invite you to read it. Another recommendation we make is regarding the transaction cost. So we we saw that table that Daniel presented. There was about the 10 or a dozen instruments but the reality is in Sub-Saharan Africa there's nearly 100 instruments identified for instance by an accident report by RIS for Africa. So there's nearly 100 instruments for somehow financing and mitigating risk in the region. And we won by the way we won many instruments some will fail some will succeed but we do need as all of the above approach because we don't need to accelerate deployment in the region. But the fact is these instruments they're all different they're not standardized and what we hear over and over and over again from the developers on the ground is we don't know what's out there. We cannot compare them. If we want to engage with an instrument we if we want to know what the instrument is about we need to deeply engage with them. So so we so there's a huge transaction cost basically in order to know what's what's around we need to engage with the instrument and that takes time that takes energy that costs money. So there's a cost we need to help navigate that we need tools tailor for developers to help navigate this variety. And the last one and I know a lot of times I'll go it quick but and this one is not new but it just has to be repeated over and over. DFI's are development emphasis and development finance institution so we need to leverage the D we need to leverage development part we need them to lend where others cannot lend. We hear and in some cases that's happening but we hear from stakeholders on the ground that in many cases DFI's are perceived to operate in a very risk averse manner even more risk averse and commercial entities and that they did not fulfill the development mandate. So even though it's not new we just have to say it again please do leverage the in DFI and thank you with this we look for a discussion but I'll pass back to Carly. Thank you. Thanks Mikael. Well I did see that there was a question in the chat but it's about the PowerPoint if we can share this afterwards. Yes thumbs up so I suggest that those who want the the PowerPoint send me an email and I'll write my email address in the chat shortly and then I can send it out. But now I would like to invite Dan to take the floor Dan Croft from IFC. Could you tell us a bit more about scaling solar and yeah if you have any reflections on what you've heard also? Sure thanks Carly. Good morning afternoon evening everybody and it's nice to see some familiar names in the participants and to meet some of you for the first time as well. So just by way of introduction I think on the flyer I was builders IFC scaling solar that's just a procurement program and I'll say a little bit more about it. Formerly I'm the regional upstream manager for infrastructure in Africa based in Accra and what we mean by upstream for those who don't know this is nothing to do with oil and gas exploration. This is all to do with sector project market development typically over a three to five year investment horizon but often and regularly it ends up being rather longer so this is the sort of long slow burn stuff and the long-term aim there is really to put the back in DFI to create markets to try and build a pipeline of investable projects for not just for ourselves but for other DFI's for commercial lenders for sponsors and ultimately for our client governments who are at the end of the day our shareholders. So I'm going to try not to say too much and despite the slide thank you very much Carly I don't have any I'm not a fan because I tend to just speak for longer and I'm more interested in hearing from others on the chat and getting a good discussion going so I'm going to just try and limit this I think scaling solar's been around for a while and there's a lot of material out there not all of it entirely accurate but we can get to some of those questions a bit later on but it essentially it's a world bank group program and that's very important I'm here representing IFC and we were instrumental in the design but this was designed across the world bank group recognizing that everybody brought different value propositions and it was we developed it to make it faster and easier and more competitive for developing countries to procure utility scale private sector solar power projects that's it and it was really designed around three premises and it's worth just tipping our hats to the South African IFAP or REIPP program because these three things well we saw them there we realized that that program probably wouldn't work in many other countries in Africa for various reasons which I'm happy to go into but that you could take the bare bones and design something that would work for other countries and those three basic elements are transparent competitive tendering which I'll be saying quite a bit more about pre-negotiated and demonstrably bankable template project and procurement documents which need to be fair and balanced to all parties and then a package of world bank group support to the governments and to the private sector which are available from project inception all the way through to financial close and onto operations and some of those were listed in the introductory presentation the RMT instruments but my working hypothesis is that risk mitigation goes way beyond instruments and I'll be saying a little bit more about what I mean by that when we started we saw low solar prices or increasingly low solar prices everywhere except sub-Saharan Africa and so as a DFI we sort of asked ourselves why that was when there was so much solar resource and it must have been a higher perception of risk I'm sure that for the more inland projects there are also higher costs logistics kicks into this and availability of equipment and warranties and all of those things but ultimately it's all about a higher risk perception but what we saw when we first started talking to the government of Zambia who were our first client was that the prevailing offers from developers unsolicited proposals looking for negotiated deals were around 12 cents a kilowatt hour and that was typically without any resource mapping and no costing of fundamental equipment either or no detailed costing so that was a thumbs up which logically had it been accepted must have been designed to allow considerable contingency and fat to enable the developers to get to financial close before they actually breach their own return requirements less than a year through the program we designed we halved that to six cents it was actually about nine months and there are some RMT things there and we can dig into those there are some instruments but ultimately the key determinant of that was transparent procurement transparent competitive selection subsequently we've seen similar kind of pioneering results in Senegal and pleasingly now outside of Africa it was designed for Africa but we're now seeing that in Uzbekistan as well where the government is embarking on a second round and we think that this formula of transparent competitive procurement whether that's done through scaling solar or not and I mentioned REIPP there are other programs we're going to be hearing from Judith on get fit as well has to be the best way for governments to scale renewables and achieve value for money now in terms of what's included it covers everything from transaction advice project preparation standardized documentation which can be rolled out quickly and we have to remember that this was done at a time of falling solar equipment prices rapidly falling solar equipment prices so if you negotiated your price and took two years to negotiate your documents the chances are that the government would realize that your price was wrong and then they would reopen your price and you could no longer deliver for that price because that had all sorts of other knock on effects so the key here was speed the critical path item was the process not the construction you can build these things in five or six months but the critical path item was the speed of the procurement process so that's really what we focused on a lot of the criticism that we had subsequently was that the whole thing actually wasn't that quick no but a lot of the delay came after the procurement had happened and what you realize is that the same things that hold up projects in Africa were still holding up projects government ministry is not talking to each other unclear title to land I can go on and on but most of you know all of this so if we think at its heart that a solar tariff comprises is really has driven by three factors and we think in terms of cents per kilowatt hour and two of them pertain to the cents right so you've got the cost of the kit which is give or take the same for everybody though bigger players can usually command better prices and the cost of capital which of course is not the same for everybody so how do you get down capital cost you attract larger players with cheaper capital and you de-risk the project for them so that by the time they bid they are really just sharpening their pencils okay this is a clear economic principle that competition drives down prices of course the other half of the of the equation the the denominator is the kilowatt hours that's really a function of plant efficiency and solar resource and that's the same for everybody give or take a few variations in terms of O and M so cost of capital is the key driver the key risk mitigant is low prices one of the things that's also worth bringing out in terms of another risk mitigant that isn't really covered on that chart that we saw earlier is the cradle to brave nature of the process so if you think about what we did we designed a tender process which was designed to focus on the best the most credible developers with the cheapest costs of capital and the reason for that is if you are running a program in South Africa and it's round four of a renewable energy program and you're looking for another 3000 megawatts and 50 megawatts doesn't turn up that's okay that's their loss because you've still got the rest of it if you are a minister in Zambia dipping your toes in the renewable energy ocean amidst quite a bit of skepticism in the country that we really shouldn't be moving away from hydro should we because that's what we've been relying on if that 50 megawatt project doesn't turn up it's quite embarrassing possibly career limiting career ending even so it's very important that when we go in and talk to our shareholders the government about helping them procure utility scale solar we have to be as confident as possible that the project is going to materialize this is also something that's very clearly forgotten and so what we did by focusing on the best developers actually allow the financing offers to be more aggressive we could take more risk because the likelihood of those developers failing to build their plants went down okay so that is also risk mitigation nothing to do with instruments nothing to do with guarantees or anything like that that is just about focusing on people that know what they're doing because ultimately our development mandate is the delivery of low-cost infrastructure that's really what we're trying to do it also means that the projects are most likely to close so some of the numbers that I'd just like to bring out just to demonstrate the point about transparent competition in that first bid in Zambia one of the two projects not the one that was on the slide and Gonye was the project that NL won Banguilu was the one that Neo N won and we had six bids the lowest was 6.015 cents the highest was 10.6 cents for the same risk broker now I probably don't need to spell it out but I will that is clear evidence that all things being equal cost of capital bid or risk appetite how hungry they are for the deal drives the prices down and what happens when you've got a government that has chosen what it wants to procure it's gone out and actually de-risked it in advance it's then offered that project to the market and it's asked bidders to sharpen their pencils and to come back with minimal negotiation it means that everybody is calling over everybody else to get it which means they all sharpen their their pencils and lower their prices as much as they can to put that into context some of the analysis we did for some of the other governments that wanted to see this we're going to ignore the sixth cent because that was a bit of an outlier those guys really really wanted to win and that's great Zambia got a great result but if we look at the other five bids there were three at the 8 to 8.4 cent per kilowatt hour range and there were two at the 10.4 to 10.6 cents per kilowatt hour range now if we focus on the difference between 8 and 10 and if we also remember that these numbers mean nothing in a vacuum it you can it a lot depends for example on whether it's a fixed tariff or whether it's indexed over time so let's compare 8 cents and 10 cents and fixed indexed at 2% okay so we've got four numbers if we look at fixed the difference between 8 cents and 10 cents on a notional 100 megawatt plant with the same solar conditions as there were in Zambia the difference is 60 million to 160 million over 25 years so that's 100 million more from two cents per kilowatt hour on the tariff if we look at it indexed it's even worse it's not 60 million then over 25 years the government will be paying 170 million for power and at 10 cents per kilowatt hour they would be paying 300 million so the difference there is 130 now if we go back and we imagine that from the government's perspective this is fundamentally a public procurement they're buying a service and I hear everything about dollars and forex but until plants are actually until equipment is made in country these are going to be dollar denominated assets they can pay the dollars up front or they can pay dollars over the life of the project but fundamentally that's just a reality that everybody needs to deal with but if we look at the difference there that is why it's so important to get transparent price discovery through competition in order to drive down those prices because the impact on the fiscus over 25 years is absolutely huge let me wrap up so some key messages it's not just the RMT tools they're important but it's not just them it's also a de-risk project and a competitive process bidders see two risks and these are often conflated there's process risk will my project close and there's project risk will it work will I be able to finance it will I be able to build it will the government pay me etc what we tried to do was to take out the the process risk we tried to make it as likely as possible that these projects would close so the bidders and good bidders at that could focus on the project risk and ultimately this comes down to public procurement none of us if we were looking to buy a car would make sure our driveway was nice and clean and tidy and then we'd sit on our front porch and wait for people to come and offer us their own cars because they'd offer us cars we didn't want cars that might not work they might not even own the car etc most of us would work out what kind of car we wanted we would go around car dealerships we would test drive we would research and then we would negotiate the price okay and that is really all that's scaling solar and I hesitate to say get fit as well try and do allowing governments to procure what they want to buy rather than what developers want to sell the advantage of that is that if the government knows that on the day through a transparent process they've got the best for that project on that day with that equipment with that solar resource in that EPC market and that financing market with those tax incentives these are all the variables they get the best price they possibly could have any investor is going to look at that and think it's less likely that that government is going to marry and haste and repent at leisure they are going to think that this is the best deal they could have done it's a positive decision that they made to procure they've procured and that was the price they got because the process was robust that means it's more likely they're going to pay that means those RMT instruments are more likely to be available we don't offer those as sticking clusters we offer them in the expectation that they buy us time to fix the problems in the sector so it's all interrelated and the single biggest mitigate at the end of the day is a retail tariff that is below the prevailing sorry a wholesale tariff that is below the prevailing retail tariff if a utility is losing money on every unit of electricity itself it is more likely to run into trouble and the project is therefore riskier if it is making money or breaking even it is more likely to be able to pay going forwards this is just simple economics so I would like to stop there I do have some responses to some of your conclusions and recommendations but I'm probably over time so I'm going to stop thank you very much thank you Dan and you will get the chance to talk more during the discussion but first let's hear from Judith good afternoon everybody hope you can hear me yes okay great so you can move to the next slide unlike Dan I usually talk longer if I don't have slides so I try to have a few slides just to hide my thoughts a little bit so basically I'm here to present on Getford Zambia a key question maybe is who or what is Getford Zambia so Getford Zambia is really the implementing program for the government's refit strategy and I'll speak about that a little bit more later the program is being funded by KFW through the German government and it's a grant of approximately 41 million euros the primary purpose of the program is really to promote investment in renewable energy by private sector entities so that was the key driver the grant provided by KFW and I'll also speak about that in a bit more on the next slide but the key element of the grant is not to provide financing to the to the projects I think I often get the question why isn't KFW just financing the projects so KFW is an entity that only extends financing to public entities such as the government of Zambia or Zesco it doesn't lend to private sector entities so probably a key point so what then is the 41 million for it's essentially for grants of element that we call viability gap funding and also what we refer to as the grid facility these two elements arguably provide some de-risking to the projects but also meant to help with affordability so a bit more about the program on the next slide and what we ultimately intend to do so essentially what I would say is the program was designed or is aimed at being a catalyst for future or rather to encourage future private sector investment so KFW is hoping that by implementing the program and what you see on the slide is what we call our toolbox by implementing this we are hoping to improve framework conditions for private sector investment in Zambia to such an extent that get fit would not be required in order for government to move forward so the idea is implement the program in a manner where you can hand over the documents the framework to the government to continue with implementation so what is the toolbox so for those that know Zambia they are and I think especially over the last two years there's been a lot of interest by private sector entities to invest in the country a lot of entities have got what they term year and zesco feasibility study rights but I think what a lot of the developers and IPPs are struggling with is a is a clear path to market and I think Dan has actually articulated it well it adds to the cost or the tariff that ultimately the utility pays because there's no certainty so developers are spending money on development work but they just never sure if they will ever be able to secure a PPA with entity so similar to scaling solar what we what we aimed at achieving is to provide a comparative procurement platform aim on our end really is to work together with a ministry of energy similar to scaling solar coming up with a set of procurement documents so RFP documents together with standardized what we call project agreements which includes PPA and a grid connection bankable and we use that in order to tender out projects to private sector the other element that we have is what we call debt and risk mitigation facility here we've primarily partnered with ATI and the facility we made available under the tender is the RLSF I've mentioned before that we've got viability gap funding and grid facility these two products are mainly aimed at the small hydro program I think Dan Croft has has highlighted that given the nature of solar PV right prices have been low pricing has been achieved across the world and question was why not in Zambia we set out to prove we weren't sure if we'd be able to do that that Zambia itself is also capable of getting a low price outcome on on solar and thus we we didn't need the viability gap funding or the grid facility in order to make those projects viable and then the last element of our toolbox what we call technical assistance under the technical assistance framework we hope to work with government I think to essentially close some of the gaps also highlighted by IFC i.e making sure that certain licensing frameworks are addressed ensuring that there's no duplication in work being done by different entities with within Zambia and I'll just give an example of that one of the things that we found is that there are different entities that are essentially responsible for issuing of rights one is called feasibility study rights and that's issued by an entity called OPPI under the Ministry of Energy but then you'd have the Water Authority in Zambia Wama also issuing rights for entities to exist water in order to do their studies key year is to try and see whether or not one can design a framework that eliminates some of the duplication in in work and licensing requirements and permitting and in doing so reduce the cost of the projects so other element under the technical assistance is really capacity building as well next slide the next slide is just meant to demonstrate I think as soon as it changes is meant to demonstrate our key tenders so under the refit strategy we had a 100 megawatt allocation under solar PV and 100 under what we call or rather under small hydro power program how we decided to to to run or how we are running the two processes are very different our approach has also been very different I'm not quite sure if you guys can see the next slide I'm still on the get the toolbox okay there we go so this is essentially the two programs or the two technologies for which we've been that we've been allocated the the the refit strategy so solar PV tender that one we started the auction process and as I mentioned it's a reverse auction process we started that in 2018 started with shortlisting also similar to scaling solar try to get the best entities shortlisted so it had variance very stringent and very competitive criteria key thing and and and maybe primarily part of what's the difference between scaling solar and get fit and again it's not that the one is right and the other one is wrong it's just two approaches to achieve different outcomes personally I think both can work in a market governments probably just need to decide which is more appropriate for for which technology etc etc but but both certainly in my view could could work our approach was really to allow the developers to take all of the up front risk that site selection doing feasibility studies on those sites trying to secure the land trying to ensure that they've got appropriate connection to the grid the only thing that we did under the tender was we provided a list of feasible transmission or distribution connection points whether it was a line or whether it was a substation that developers could connect to so they would know up front whether or not their buds would be successful because for those that could not connect to the to the grid they would obviously be disqualified so there we were quite closely with with Zesco on the hydro not going to say too much about it but essentially under that tender it's refit based we worked together with ERB which is the energy regulation board in order to determine refits idea there really was to try and keep the refits as I would almost say as low as possible to the extent feasible in the hope that some of the developers could execute projects within that refit and for those that are not able to do so that's what we call viability gap funding grid facility really is to ensure that the projects can connect to the grid so one of our key learnings in Uganda was the fact that many of the projects were able to complete construction this is small hydro projects but then didn't have any access to the grid the government I think at the time had indicated that they would be responsible for the grid but unfortunately I think given their delays projects went ahead they implemented waiting for government to complete the grid and so grid risk was sitting with the government under the get fit part of the small hydro program we're trying to avoid that so trying to deal with the program and cost for the government in that regard maybe just to mention both our projects have got a portion of indexation so on the solar PV 10 percent and under the hydro 15 percent of the total prices index so where are we with both programs needless to say as I said started in 2018 I think we had really high hopes together with the developers I think much enthusiasm around the program we had also managed to complete within record time the the the tender itself I think probably seven months and by April 2019 we're able to announce who the winning bidders were they were all awarded development rights those entities are listed there red rockets globalic solar in over those and then in urban partnership with the local Zambian entity called CC I think unfortunately as we and I don't know how many of you have been following developments in in in Zambia at the time we launched the tender yes there was an IMF program that was being put in place there was also sector forms underway yeah I just want to let you know that you need to soon wrap up okay so I think this is almost the last slide there were also sector reforms underway and at that point I think unfortunately things didn't go as planned a cost of service study was underway it unfortunately got delayed and once all of that happened you know we had financiers basically deciding to suspend funding in Zambia also primarily driven by the fact that government had defaulted on the debt so essentially now where we are with the with the solar projects we're still waiting for financial closed and then under the hydro program I've said quite a bit on that the only thing I'd mentioned there is hydro RFP for now is on on hold I think the last slide just essentially speaks about I think some of the elements that Dan has already raised so I wouldn't go through that but essentially what we are trying to achieve is to ensure that we've got affordable tariffs for the utility we're hoping that that by having tariffs there are below average selling price so wholesale tariff or PPA tariffs below selling price would help as an element of de-risking projects because it would ensure that the utility is able to to to sell that yeah key things that we're now working on in to ensure financial or rather to ensure that projects can move forward is really to try and see whether or not we can work with lenders in order to look at other risk mitigations that will enable the projects to move forward so that's essentially concluding on on what's on the slide thank you Judy and now we will jump into the panel discussion and I invite Vikkus who we haven't heard from yet to join the digital stage and I will also spotlight you so that everyone sees you thanks Barley and yeah good afternoon everyone thank you Daniel, Mikael, Dan and Chileth it was great to hear from you and I think it's a great report that's been produced that sounds on the back but I think Daniel and Mikael in particular have been able to capture a lot of the the real issues related to risk mitigation in the sector just for those of you that don't know me my name is Vikkus Kruger I work at the University of Cape Town in South Africa we have a small research unit here at the Business School called the Power Futures Lab primarily working or producing research on biosecule investment but also biosecule reform and regulation in Africa and just as a very quick background to why we're looking at this topic I mean within our unit we've been tracking investment levels in power in in sub-Saharan Africa over the past 30 years and I mean there's probably three big things we've seen the first is that there is a massive gap right there's there is just a lot of new investment needed of the the 115 gigawatts that's installed in the 56 countries in the region half of that distance South Africa 90 percent of the remainder is shared among 15 countries and then we have you know 23 countries with systems smaller than 500 megawatts seven with systems smaller than 100 megawatts so it leaves a big gap in the sector and and the need for scale is is incredible the other thing that we've seen is that renewables are taking off and the investment levels have increased substantially but they're not kind of near the levels that we need and so there's still much more work being done and the risk mitigation instruments and products are being used are welcome and I think make a big difference as as Daniel pointed out but there are still very serious questions around how how one scales these and so my first question Dan is Dan Croft for you and yeah there's there's been a lot of criticism thrown at the scaling so the program for various reasons and I I don't need anything to go into all of them right now but one of them is that the program has promised more especially in terms of scale than it's been able to deliver in in especially in Africa and and I'd be curious if you can just unpack a little bit more what what exactly it is right the ambition of the program was always to to scale and to you know to unlock the benefits that you get from from running such a kind of a large program with a with a significant backing from from the World Bank Group but at this stage there have been a lot of announcements but not necessarily all that many results and so maybe you can just help us understand what those results are and for what the reasons are and kind of where risk mitigation instruments sit within this story and what the limits are to ease. Sure so I think to put this into context and again another very sort of simple analogy not about cars this time but about manual tools so if we think in terms of a hammer and let's imagine you've never seen a hammer before and I show you a hammer and say okay assuming you have big enough muscles and you never got tired you could probably hammer in something like 3000 nails in a day a normal working day you say thank you very much and then three years later the hammer's still sitting on the desk where I left it and you say you promised me 3000 miles a day I didn't I told you that's what it could do it's a tool right we have to remember that in the markets in which we operate these are not liberalized markets sorry don't need to tell you this you know this better than I do but the the role of the government in this is central um what we did was create something which any government could pick up tweak so that was a learning for us it was not quite a standard as we thought it might be and of course that was probably pretty obvious you know um but it it always has to be tweaked for local public procurement law for the intricacies of grid connections and who takes forex risk and the role of the utility and the credit worthiness of the utility etc etc but it's something which could be picked up but a government needs to want to do it they need to want transparent competitive procurement they need to want to make or be willing to make difficult decisions so our contribution to that was we'll help you de-risk the project we'll do a lot of the preparation you tell us where you would like the project so it's most useful for your grid it's another thing rather than you know it's a different story in South Africa where you can let bidders pick their own sites what we were finding was that a lot of those 12 cent tariffs were because land owners who happened to be fortunate enough to have a site right next to a substation were charging a premium we worked on the basis that that should not be passed through to the tariff so we let the government provide the land uh and we um asked them to demonstrate that they had title and we did all of those things but fundamentally the government had to do that there was a fee payable um some discussion about whether or not we just sort of underwrote the whole cost of project development no no our clients pay us fees for that service and then there is a difficult conversation about okay here's the model these risks are going to remain with you and these risks you can pass on to the private sector you can tweak that but the more you tweak it the less bankable it will probably become and then the longer you will take negotiating and putting sticking plasters on to try and get the project to financial close that's quite hard for a lot of people to do a lot of people are a lot of governments have resource constraints there's an election coming there's political pressure and there's a lot of competing offers and promises being made we never promised ever gigawatts and megawatts we leave that sort of thing to others what we promised was that there is something there that in theory could work anywhere with a fair win and a government that was willing to pick up the hammer and start having hammering in nails um I think on the you asked a question a follow-up question about the risk mitigation tools what can you just remind me what that was please I mean primarily what role do you see the the risk mitigation tools playing in achieving the scale and possibly also kind of the inverse of that is what potentially deterring role do do they play in in getting governments to sign up to a program like this where some of the tools might end up representing for example a contingent liability or either kind of risks on on the government okay so I think it's probably worth saying that unless and until we have fully liberalized sectors the fundamental obligation to pay is going to rest with the government if the government decides to use its scarce development dollars to buy a solar farm outright it's paying on day one it's not a contingent liability it's an actual liability if they decide to do more of the sort of higher purchase uh model the sort of ppp ipp sort of thing where you pay over a period of time as we all know when you involve lenders you end up paying more in absolute terms but it's more manageable and you can pay out of operating cash flows and revenues right but the the payment liabilities on the public sector either way so the the idea that somehow because it's a contingent liability that's a bad thing it's already there right so at that one what I think the focus needs to be on and I mentioned this through the transparent competitive procurement is by running the tender process and getting the tariff the wholesale tariff down below the retail tariff you make it easier for governments to avoid that contingent liability ever materializing you can see if they're selling at seven cents and they'd sign one of those agreements at 12 cents we all know what would have happened they'd be an even worse straights than they are now that's exactly what happened with that power barge contract that they signed in order to cover the drought period that they had in zambia right we all know why they did it because electricity is just you can't manage without it but look at what it's done to the finances so the RMT instruments which as I mentioned were available specifically because the program was so well designed right they're not exclusive to the program we saw them in the azura project in Nigeria as well which also has a partial risk guarantee and there's meager insurance since you know very often available if you want to go and approach meager what we did was we addressed the point that I think daniel made which is that the or maybe it was Miguel the the the perception that it's so difficult to access these products so we reversed the order we stapled them to this product and we said if the government follows this line these products are available on these terms and that was made available to all the bidders in the data room they all knew what the terms of that were now it's never that simple of course you still have to negotiate agreements but it was a lot better than I've got my price now I'm going to look around and get get the offer because if the price if the wholesale price that is agreed is higher than the retail price these days the chances of getting concessional lenders to help you achieve your own economics when you haven't even been through a competitive process are that much more remote so it all fits together did I answer you yes thank you very much I have a quick question for Judy and then I'm going to go to the questions from the chat Judy I mean this question on on government's role is of course central in in Zambia right now and one of the key issues I think that's that's been front of mind for everyone involved in the get fit program is Zambia in their situation and I was wondering whether you could reflect on what your view is on the current date restructuring that was recently announced and how that might impact your program thanks for that question because perhaps in answering it let me just take a quick step back so I highlighted on my slides that our projects essentially came to a standstill that was in 2020 so shortly after covid major impacts on the macroeconomic situation in Zambia eventually leading to the government defaulting on it one of the things that that had obviously done was um triggered a rating downgrade so currently and that is probably one of the key hurdles that we had experienced in our program is the fact that government rating is at a level that doesn't allow for certain of the um DFI's I think we might have lost Judy there for yeah fortunately okay Judy we will get back to you I hope once connectivity is stored but maybe let's go to one of the questions that we've got in the chat which was specifically posed to Dan um it's it regards the relationship between the lenders and the spv or the project sponsors and what happened when there are disputes between the lenders and their sponsors spv after close has been reached how do you deal with that efficiently and quickly um without putting the viability of it uh project at risk so I guess the slightly generic question it's going to depend largely on on the nature of the dispute if we have a particular reporting requirement so we want to see quarterly financial statements or pro forma balance sheets or whatever it is and they're not being provided we have a conversation with our clients it's a private conversation doesn't need to go any further we have clients and client relationship managers and portfolio managers and we speak that's what lenders do when there are problems arising contractual differences um in a financing nothing new there or strange I think probably the question might have been aimed more at issues where there is a dispute between some of the external parties and the project company the spv that we have financed and then we have to take a holistic view the thing about those contracts and I speak as a as a lawyer and this is why I'm not a lawyer anymore is because they only take you so far um it can say what it likes but ultimately if you built a plant you're not going to take it away very few of them are actually have any sort of resale value at all you're not going to take it away it's all about making sure that you have the tools at your disposal to try and encourage the government to pay you know one is if you stop paying you won't get any more investment it's pretty obvious uh but you might do in a few years time but you know fundamentally why don't you carry on paying because you want people to come and bring resources and investment and expertise and partnerships to your country but that's one of the advantages of being a dfi and I I hear everybody that it's great when the commercial market can just take this up on their own as they do in South Africa we didn't finance a single solar pv or wind project in South Africa in any of the rounds because we weren't needed the local banks did that role right they weren't available pretty much anywhere else where we've looked with with scaling solar and one of the things that bidders at least like about us and other dfi's being in the room is that when there is an issue we can try and address this sensibly through a conversation with the government through convening power through our annual meetings when we meet with these governments we have conversations so you know we you will probably find us and anyone who has any experience of this the nuclear option of legal enforcement is really just that it really is a last resort nobody likes it and it's not good for development thanks then I see Julie is back so Julie do you want to quickly take a moment to finish your thoughts before we last you okay sure so just coming back to the debt restructuring personally I I think it's it's quite significant one of the things that was highlighted by Miguel on the slide is really the lack of dfi's really stepping in right when when I would almost say when they most needed and so if you look at the situation in in Zambia granted that some of the dfi's had to step out after the default but the government have subsequently done so much I mean one of the requirements was signing of the IMF debt relief package they signed the staff level agreement in record time they signed the IMF debt restructuring deal one sorry the IMF debt relief package one year later granted that the debt restructuring had taken longer than planned I mean the president had indicated that they'd hoped it would be done in a couple of months everybody had hoped that it had taken longer and what we had always tried to convince some of the dfi's is everybody knows that it will be done so why not have faith and start a process maybe of due diligence and start working towards project implementation why wait until the debt restructuring is actually concluded I think a lot of the dfi's have unfortunately taken this this approach I certainly think that the deal that was concluded is good but some pieces are coming out in terms of what exactly is being concluded but one of the requirements from the lenders at least has been the signing of the MOU I think what's being concluded paves the way for the signing of the MOU but unfortunately I think the MOU signing still needs to needs to take place maybe one thing that I want to mention is that we have fortunately managed to find a lender I'm not sure if I can mention them but DFC from the US that is now willing to consider financing the the get-for-the-projects within the current environment one other thing I quickly need to mention is we are trying to also look at more sustainable risk mitigation mechanisms specifically looking at the the utility so it's not only a question of adding one type of guarantee or liquidity facility after the next but actually working together with the utility to say what is it that they can put in place in order to give lenders comfort going forward and so that's now a new ongoing initiative that that that we're working towards and hopefully we can conclude something shortly. Thank you Judy just a quick follow-up question on on the debt restructuring one of the conditions initially from the IMF was that the government of Zambia was not able to provide sovereign guarantees and as Dan explained in in a context where you have state-owned utilities that are often not able to charge cost-effective tariff that that effectively means that the uptake risk of these projects sits with the government and that that needs to somehow be contractually guaranteed is is that still the case in in the kind of restructuring context because that's also one of the main recommendations from the report that these kinds of carve-outs for renewables projects and climate investments are needed in these Yes so I think that's that's a very good question and probably a critical question I mean I think it's I think either Daniel or Miguel showed it on their presentations it's it's simply not possible to conclude any private sector IPP at this stage given the rating of most countries most utilities without termination guarantees so I think maybe that's just the first point I think the second point is if we look at the IMF framework it but it essentially puts a debt ceiling on so basically they did a dsa debt sustainability analysis and they've come up with a maximum level which they call the debt ceiling that the government can borrow so this is the challenge they've kept the amount of money that the that the government's able to borrow and then in addition what they said that cap includes guarantees so the only way so number one government is limited in the amount of money it can borrow it has other social projects other infrastructure projects that it needs to consider and arguably financing needs to go towards those projects and programs so you left with a private sector to help with implementation so if you put the same conditions or if you say that private sector falls within that ceiling you can see that it's it's it's simply impossible for government to implement IPP projects which are critically required in order to drive economic growth because that's what you need for the mining sector agricultural sector etc etc one of the things in our discussions with the IMF and and and also this lender that we've been speaking to is we wonder and I think it's the same thing that Dan has raised whether or not IMF really understands the type of guarantees that are sitting under the IPPs so I think I had the same conversation with Daniel it's not it's not payment guarantees it's termination guarantees so essentially all the government is doing is standing behind a contract right and this contract that they're standing behind is a contract where their utility has agreed to buy certain services or to buy a product a product that they can resell resell at times at the profit that would help them to repay IPP payments and so certainly the nature of it is fundamentally different it's fundamentally different I would say to a normal guarantee for debt because guarantees for debt payment guarantees these guarantees that we're having under the IPP framework is not similar it's one of our partners under the program is Trinity and Paul will tell you it's basically a doomsday scenario it's in the event everything goes wrong Zesco or the utility continues non-payment what would happen under that circum under those circumstances you would put a plan to the government and all they're doing is they guarantee to buy the plant for that value so yes they've got a liability but they've also got an asset and that asset can generate income for them so so one of the discussions that we also need to have in order to conclude on the on the gate for projects is probably to have this discussion with the World Bank and the IMF to ensure alignment on our understanding of the nature of these guarantees number one number two to understand that projects just simply cannot be implemented without them and thirdly as as one of the financiers said very nicely IMF needs to understand that what it's buying is growth because without implementing IPPs you just simply won't have electricity so economic growth would just continue to slow hope I answer the question no thank you that is helpful I think the reference to the doomsday scenario reminds me of a data set that we use when we teach on project finance here at the university and one of the one of the data sets that we use looks at default rates on project finance deals globally and specifically in the power sector and what is interesting is that power deals in sub-Saharan Africa have the lowest default rate globally I think with the possible exception of the low east being slightly lower but the US, Europe, etc. see much higher rates of default and so there are obvious questions around risk perception versus reality possibly also the fact that many of these projects that we are developing are kind of gold-plated often in terms of how much risk mitigation is part of the package and whether that might be too much or not enough but I have a question from just team that I wanted to pose to the entire panel and I'm going to adjust this slightly but the question is largely around whether there are cases of public-private partnerships that that specifically address risk mitigation what their results are and I want to extend this by also bringing in the issue of Chinese finance we see China funding an incredible amount of power infrastructure across the continent often with very different kinds of funding terms and risk mitigation measures that we find in the IPP space and if you could comment on how that might be different to what we're seeing and what the kind of benefits and you know possible drawbacks of both these approaches are to any of the panelists that are happy to speak to this I'm going to open the floor to who wants to go first then yeah I'm happy to I mean one piece that's missing often overlooked it was the case in Zambia and it was the case in Senegal was that the classic approach to PPPs where it's either your project as a public side or it's my project on the private side isn't always the way to go and it's not always what our government clients are looking for so in both of those countries there is a government ownership stake in the project which was paid for so no free carry that drives up the tariff they paid for it because they wanted to be on the inside they wanted to actually understand how to integrate variable renewable energy with their hydro largely hydro dominated grid and the idea was recognizing the importance of local participation in some of these structures but the challenge of doing that when everybody's doing it for the first time in the end the best model we came up with was that the government decided that for every one of the scaling solar projects and there were intended to be more until the sector hit the buffers the government would have this state it would be housed in a single vehicle and then ultimately it might be floated on a stock exchange for anyone who wanted to participate in these projects to participate and that was seen as the most democratic way of sharing the benefit amongst the local population as a whole that may still be a work in progress I'm no longer working with the government on that project but that to me is another risk once again is that if you spend time rather than just handing over a suite of documents saying my lenders want this otherwise there's no project if you spend time working with the public sector side trying to find a model that works before you even go to market and then everybody understands what deal they're doing and the government is involved both as an owner and as a customer they can see the relative trade-offs between a more balanced or a less balanced contract they understand both sides of the of the equation this must be more sustainable and therefore the risk must have been mitigated that is very much a PPP model that we believe strongly and certainly I personally believe strongly and I'm doing it in hydros as well involve the government on the ownership side of the table and make sure that everybody understands the deal they're doing because they're far less likely to try and unwind it if there is good institutional memory about how they got there in the first place I'm gonna I'm gonna call in now we really have three minutes left so we're gonna acknowledge the time this is a hate interrupting and I mean a great discussion Penny I don't know if you have a super short question in two sentences or less if not I'm gonna give the so do you can you do that Penny yeah very quickly Dan hi it's Penny you know my probably know most of my my concerns but just briefly I mean I hear you on on on the listing but I can't help because of the scars I have on a meme in Uganda raised the issue of what the terms of the exit are and how favorably skewed the terms of some of those concessions and x-axis structures are for those initial initial investors I think the meme an example in Uganda is a disgrace and and and that was done by a you know some of your own your own entities contribution and and yeah I think they believe it there I think there is there is merit absolutely merit in in in ownership got no doubt but the how the why the process is a very different discussion I'm afraid we aren't being honest thank you very much and I'm afraid we're not gonna have time to address this properly if I may sure but before that I'm just going to give you 30 seconds each to you to Judith to because and Kruger and to Daniel if you want to have a last remark and you may address this here and then I'm going to bring the meeting to a close to respect everyone at times thank you Dan okay so I mean I'm I won't go into detail because I can't it's I'm not entirely sure what Penny's point was but I'm you know I was involved in that project tangently before I joined IFC when I was with Global Act and the Actors family and then with IFC I'm guessing when she said some of my sister entities she must have meant that just to clarify to everybody everything I've said on this call I'm being quite honest really very honest indeed so just to be clear I I refuse the suggestion that I'm not being honest Judith just a few closing remarks from my side so firstly thank you very much for hosting this key thoughts on my side is yes risk mitigation tools guarantees etc are important but I think if one looks at long-term trajectory in Africa the need for projects the amount of cost that these things do add to the projects because they none of them come at no cost one ultimately has to find a sustainable solution I think we're hoping to try and see if we can achieve something under get fit but I think what I'm trying to say is cannot continue with guarantee and risk mitigation structures into perpetuity at some point one needs to focus on working with the utilities in order to come up with structures that are more sustainable and arguably more affordable so that's just that on my side thank you very much thank you Judy because any last remark no I just want to agree with Judy I think again to remind us as why we are facing the situation where we need these guarantees is that we are in most cases asking the private sector to sell to government owned entities that are not solvent even though commercially they should be and they have the ability to be and so better governance better structuring of the sector I think will go a long way towards unlocking investment and we see that happening in the case of Namibia and I think that's that's something that we do need to take into account when we think about guarantees as Judy said it's not a it's not a sustainable scalable solution for you all for the long term thank you so on behalf of Daniel and myself and SCI I want to thank everyone for participating my personal takeaway is the hammer metaphor so this is a tool it needs to be used so we can get 3 000 nails in a day with a hammer maybe if we turn into a nail gun we can do it in one hour and spend the rest of the day doing something else so I thank you everyone for participating here please download the report please visit our website on behalf of SCI and the finance forces development thank you very much and I know bring the meeting to a close thank you thank you bye thank you very much thank you thank you thank you very much bye bye thank you you