Shortlisted developers prepare and submit a proposal
“REA works with local commercial banks
to drop interest rates from 25% to15%,
apply a 3 month moratorium period,
and a longer payback time”
Out of the 242 expressions of interest received, 103 projects were shortlisted to submit proposals. In the proposal phase of the competitive procurement process, prospective developers are expected to provide detailed technical and financial information. They provide technical information on their energy systems such as the load survey, size of the energy system, peak generation capacity, storage capacity, lifespan. The developer also submits a long-term operations and maintenance plan detailing how they intend to monitor and maintain their energy system to ensure the desired level of service to the recipient community for the duration of the agreement. Developers disclose their business model and key company financial information. In the business model presented in the proposal, developers need to stipulate the tariffs negotiated with the community to be serviced, the size of the grant requested from REA, and the size and source of private equity. REA provides a capex subsidy up to 75% of the total project cost while a minimum of 25% is to be self-funded or financed through private equity. Developers are given 30 days to submit a full-fledged technical and financial proposal to REA.
During the proposal period, a multi-tiered decision-making process is established. This consists of a technical and evaluation committee that undertake technical and financial due diligence of the responses received based on the information provided in the proposals. The proposals that pass the above-mentioned committees are presented to the grant award committee to determine the size of the grant that they will receive, then sent to the tenders board for review and endorsement and passed on to the REA board for final approval.
During the evaluation process mentioned above, REA staff undertake site verification visits to ensure that the developers have engaged with the community and chosen a site for deployment of the system that is not environmentally sensitive.
To help developers raise private capital, REA has worked closely with several commercial banks to decrease their interest rates from 25% to 15% with a 3-6 months moratorium period, and a longer payback period.