The Rural Energy Access Model encompasses many activities and programmes to ensure sustainable poverty alleviation in rural areas of Africa. Whilst the overwhelming focus of the Gpower projects to date has been on generation and distribution of micro-hydro electricity, following auxiliary programmes (described in detail below) have simultaneously been put into practice:

- CBO Identification and Legal Institutionalization Programme
- Educational Programmes
- Commercial Venture Programme
- Outreach Programme
- Carbon Credit Programme
- Loan/ Grant Programme

Educational Programmes:

In collaboration with internship programmes via UQAM (University of Montreal) Gpower facilitates an education- and training programme for shareholders and CBO representatives on the following topics:

- Organization and Governance strategy
- Legal strategy
- Shareholding and Credit Access strategy
- Administration strategy
- Implementation strategy
- Operation strategy

These seminars are currently held on a weekly basis at the Kianyaga branch office

Commercial Venture Programme:

Through the establishment of affordable energy infrastructure and the considerable capacity building input materialized through the REAM programme the target area will become increasingly attractive to foreign private sector investment. In this context Gpower is networking with international venture partners to prerequisite successful micro economic and social development in the REAM partner communities.

Outreach Programme:

To ensure full community participation, including the participation of women, Green Power is preparing to implement outreach workshops, print and disseminate information material and organise incentive visits to the REAM project sites, also in Western Kenya where Green Power has only become active since August 2008 and where communities do not yet have a reference point on how best to organize the projects.

Carbon Credit Programme:

Micro-hydro is one of the most environmentally benign energy conversion options available, because unlike large-scale hydro power, it does not attempt to interfere significantly with river flows, and relieves the local population from dependence on scarce natural resources. Through its environmentally friendly approach the REAM may facilitate capitalisation on a variety of synergies such as carbon credit. Gpower in collaboration with the Berlin University of Technology and Linklaters Ltd. New York is exploring a carbon credit programme to secure further pre-financing of its projects through Gold Standard Status.

Table 1: Prospected yearly revenue from Carbon Credit Programme

Loan/ Grant Programme:

Gpower’s financial strategy is, for one, centred on self-reliance and sustainability i.e. no reliance on donor support once the model is operational and also strongly advocates maximum community contribution to the projects, which represents a vital facet towards enhancing a sense of ownership, responsibility and motivation towards the REAM realisation.

Community members in the target area have thereby agreed to sign individual loan agreements to pay off an initial connection fee of Kshs 25,000. This fee will be raised to secure third party loans acquired for rolling out various components of the respective micro-hydro facilities. While this amount is more than 15% below the heavily subsidized connection fees currently collected by KPLC (Kenya Power & Lighting Company Ltd), it reflects a substantial contribution with respect to the average annual income of rural households in the Mt. Kenya region. Naturally the REAM infrastructure cannot be completed with these contributions alone and rely on subsidiary grant support from donor organisations.

Grant/ Loan Policies

In line with the aforementioned loan agreements and to implement the projects in an economically viable way, Gpower is seeking loans from lending institutions equivalent to the amount which can be secured through the connection fees from the individual communities (900 members per site @ Kshs 25,000).

Grants are required to compensate investments that are necessary but supersede the contributions the communities are able to bare. Generally, grants are requested to establish infrastructure that is auxiliary to all projects under one REAM i.e. training centre, outreach programmes or operating expenses of umbrella, electricity holding and operating companies in their first year(s), whilst the projects are not fully operational.

Gpower bears full liability for grants and loans through company assets, equity shares, CBO and individual shareholder agreements.
Funding Needs

Whereas all legal licenses have been secured and the prime structures are well on their way in many of the partnering communities, GPower under its Loan/ Grant programme is currently reaching out for following support:

1. To complete the model in the first 5 communities where prime structures and generation facilities are already in place or financially secured we are looking for grant and loan support to establish and finalize the corresponding distribution networks in Kiangurwe, Inanjugu, Riakaruria, Rianjue and Muketura;
2. While Linklaters New York has offered substantial pro bono legal services to translate the organizational structures of the REAM into a legal format, grant support is required to register the companies for the first 11 communities as well as the respective lateral agreements according to Kenyan law.
3. Because there will be an initial period where the distribution network is not yet fully operational, yet the electricity companies will be incurring running costs, Green Power is seeking the operating expenses in grant support.
4. For the establishment of a dedicated community training, information dissemination and capacity building centre Gpower is seeking grant support. Current training programmes are being held in Gpower’s Kianyaga office which is getting to small for the growing interest and educational needs on the ground.
5. Gpower is also seeking grant support to develop and print information material, facilitate workshops and visits to the project sites in the context of our outreach programme.
6. Since end 2006 Gpower is supporting various impact evaluation studies in the REAM communities which have to date and on a continued basis provided valuable baseline data for the progressive adaptation of organisational design and integrated business concepts. We are seeking grant support to be able to maintain the facilitation of these studies as they have proven to be a substantial and indispensable monitoring and feedback tool to a successful realisation of the Rural Energy Access Model.

Funding Organisations

Following organisations have already, are currently funding or -supporting the REAM model:

- Africa Lighting
- Ashoka Foundation
- Berlin University of Technology
- CDF (Community Development Fund)
- Dutch Embassy
- Echoing Green Foundation
- Finnish Embassy
- French Embassy
- Japanese Embassy
- Liberty Foundation
- Lighting Africa (World Bank and IFC
- University College Utrecht (UCU)
- University of Quebec Montreal (UQAM)
- Tana River Development Authority