Pre-Feasibility Study for “A Low-Carbon EnergySolutionfortheDevelopmentoftheKosovoInformalSettlement in the Southern Corridor IntegratedHumanSettlementsProgramme,WesternCape,SouthAfrica”

ExecutiveSummaryofthePre-FeasibilityReport

May2018

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement ii

Wewish to thank theUK Prosperity Fundwho funded thiswork through the BritishHighCommissioninPretoria,SouthAfrica.

KEYMESSAGES

• Aviable solutionwas identified for analternative, low-carbon,energy solution forlow-incomehousingdevelopmentinSouthAfrica.

• Pre-feasibility modelling considered a low-carbon energy solution for a new low-incomehousingdevelopmentconsistingof7,040-8,593housingunits inthePhillipiareaoftheCityofCapeTown(CoCT).

• The preferred solution includes connection to the grid, rooftop solar PV and gridfeed in of surplus power, coupled with the use of smart, innovative paymentplatforms.

• ThepreferredmodelisaPublicPrivatePartnershipwithbenefitsfortheCoCT,localresidentsandtheprivatesector.

• The solutionwill result in lower household energy costs, greater deployment anduse of green energy within the CoCT’s network and the potential for local jobcreation.

• ThecapitalrequirementisestimatedatR200millionwiththepotentialtogeneratean Internal Return Rate (IRR) of over 15% (or higher if funders are able to investthroughatax-efficientSection12Jstructure).

• The Levelised Cost of Electricity (LCOE) is R 1.54/kWh for the base case scenario(Eskom);R1.36/kWhfortherooftopsolarPVenergysolutionthatallowsforfeedinginto thegrid;andR1.52/kWhfor therooftopsolarPVenergysolutionthatallowsfor feeding into the grid and supplemented by gas for cooking. The LCOE for thepreferred energy solution represents an 11% improvement on the base casescenario.

• Thedevelopmentwillexport17GWh/yearofcleanenergyintotheCoCT’sgridortheequivalentofa10MWutility-scalesolarPVfacility.

• A feasibility study is needed to explore: i) detailed costing for different energysources;ii)arrangementsformeteringandbilling;iii)assessmentofco-benefits;iv)bundlingofservices;v)thestructureofaviablePublicPrivatePartnership(PPP);vi)amendments to the Small Scale EmbeddedGeneration (SSEG) fixed tariff for low-incomehouseholds;andvii)theacceptabilityoftheproposedenergysolutiontothemunicipality, the Department of Human Settlements and importantly thebeneficiarycommunity.

• TheprojectteamledbySouthSouthNorthConsulting(Pty)Ltd, is lookingtosecurefurtherfundingtocompletethenextphaseofprojectpreparation.Ifyouwouldliketo receive a copy of the pre-feasibility report, please contact John Thorne atjohn@southsouthnorth.org.

INTRODUCTIONThis study explores the potential for a low-carbon energy solution to be deployed whenformalising theexistingKosovo informal settlement in theCityofCapeTown (CoCT).ARGDesign, the project planners and architects appointed by theWestern CapeGovernment:DepartmentofHumanSettlements (DoHS)has adopted a vision centredon sustainability,using urban design to catalyse socio-economic development and stimulate economicactivities.Renewableenergyproductionisproposedasoneofseverallivelihoodstrategies.SouthSouthNorthConsulting(Pty)Ltd(referredtoasSSN)wasapproachedtoevaluatethefeasibilityandimpactofrenewableenergyinthedevelopment.Excitedbytheopportunity,

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement iii

SSNraisedfundingfromtheUKProsperityFundandformedaconsortiumincludingCarbonTrust andPlanetCapital Energy toundertakeapre-feasibility study toassess the financialviabilityofincorporatingalow-carbonenergysolutioninthedevelopment.The project team evaluated a number of options based on input from technical experts,interviewswithstakeholdersandresearchonmarkettrendsandtheenablingenvironment.ItbecameapparentthattheCoCT’sSmallScaleEmbeddedGeneration1(SSEG)programmecould provide an enabling regulatory framework for incorporating a low-carbon energysolution in the housing development. Various technical solutions and business modelscenarioswereassessedwithregardtotheir impactonhouseholdenergycosts,municipalrevenues,ownershipmodelsandrisks.Basedon the findingsof thepre-feasibility study,ourpreferred solution isan institutionalstructure,likelyaPublicPrivatePartnership(PPP)betweentheCoCTandtheprivatesector,owning the rooftop solar PV arrays on sectional title apartment blocks that meet therequirements of the SSEG programme. The PPP structure provides the project withlegitimacy by allowing the CoCT to fulfil its service delivery mandate and realisedecentralised energy while harnessing private sector expertise to ensure the low-carbonenergy solution is funded and delivered. The rationale for the preferred solution isdocumentedbelow.TheintegratednatureofthisapproachwillnotbeachievedbytheCoCTortheprivatesectoralone.Thecostsandcomplexitiesofimplementationrequiresabroadpartnershipbetweenthe CoCT, private sector and civil society; each playing to their strengths. The structuregoverningtheenergycomponentoftheprojectisrequiredtooperateaspartofabroaderinstitutionalframeworkforthedevelopment.BACKGROUNDThe DoHS tasked with themandate ofproviding low-cost housing to addressthe housing gap in the province,together with the CoCT is fast-trackingthe development of many low-costhousing projects across three prioritycorridors in themetropolitan area (seeFigureA).TheexistingKosovo InformalSettlement is located in the SouthernCorridor, more precisely in Philippi,Cape Town. This area is home to thepoorest people in the metropolitanarea. The project is targeting thedevelopment of 7,040-8,593 housingunits and will span across three sites,Withashortageofhalfamillionlow-income housing units in the Cape1SSEGreferstoaprogrammedevelopedtosupportthemovetowardslow-carbondistributedelectricitygenerationofunder1MW/1000kW,whichislocatedonresidential,commercialorindustrialsiteswhereelectricityisalsoconsumed.Theprogramaims to address negative impacts on municipal revenue. The majority of the electricity generated by an SSEG should beconsumeddirectlyonsitealthoughitcatersfortimeswhengenerationexceedsconsumptionandalimitedamountofpowerisallowed to flow in reverse - from thecustomer into themunicipalelectrical grid (GreenCapeSSEG resourcepack,2017).ByOctober2017,34SouthAfricanmunicipalitieshadactiveSSEGprogrammes.

FigureA:TheprojectsiteisinthepoorestareaofCapeTown

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement iv

metropolitan area and limited availability of land for residential development, adensification approach (see Figure B below) is necessary. Densification allows foroptimisationofsubsidiesforconstructionandservicedelivery.Thespatialplanningandhousingdesignapproach and the approach employedfor energy provision must be seen inthecontextofabasketof strategies tostrengthen resilience, increaseaffordability and create livelihoodopportunities for the beneficiarycommunity.Untilrecently,thetechnicalfeasibility and financial returns foralternative energy solutions, includingrooftop solar SSEG have not provedconvincing in a low-income context. However the densification approach used in thisdevelopment allows for the reconsideration of the SSEG model in a low-incomedevelopment.Theproposed formalisationprojectwilldeliverapartmentstyleaccommodation for7,040-8,593householdsacrossthethreesites,namelyKosovo,VusiandFarm694.Thisrepresentsa fraction of the current housing backlog in the metropolitan area but represents asignificantlyscaledprojectthatislikelytoprovideablueprintforfurtherdensificationintheCoCT and beyond. The apartment design – from 40m2 as primary housing unit and anadditional40m2thatcanbeupgradedovertimetocreaterentalopportunities–issuchthatitoffersthepotentialforfurtherrentalunitstobeaddedthatincreasestheaccommodationto a total of 11,000units andprovides an additional revenue stream forhouseholds. Thistranslates into severalhundredapartmentblocks,with thepotential to supportalmost20MWofrooftopsolar.ThismayprovidepartoftheanswertotheCoCT’svisionofdiversifyingitsenergymixandsupportingrenewableenergy.IfimplementedatscaleasenvisagedintheSouthernCorridor catalytic project, this project has the potential to deliver significant co-benefitsbothfortheCoCTandbeneficiaryhouseholds.ENERGYMODELLINGThe modelling undertaken to test feasibility assumed adequate Eskom grid connectioncapacity2.Electricitydemandisassumedtobe250kWhperhouseholdpermonth.A“low”and“high”maximumdemandwasdeterminedbasedonfloorspacethatisdesignedforunitexpansion over time (from 40m2 to 80m2 to create rental opportunities). The loadrequirementswerehencedeterminedtobebetween19.8and31.4MVAfortheresidentialcomponentand20.1and31.7MVAforthedevelopmentasawhole.92%ofthetotalenergydemand is from the residential component of the development. The energy needs weremodelled, per hour of the day, per use type over the course of a year, to determine theprofileasshowninFigureCbelow.

2GridcapacityconfirmedforKosovoandFarm694butatthisstageassumedforVusigiventheexistingdairyonthesiteandproximitytotheothersites.

FigureB:Densification(ARG,2017)

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement v

FigureC:EnergyneedspersiteAtthisstage,ourproposedsolutiondoesnotanticipateadditionalbudgetspendforenergy-efficiencyanddemandsidemeasuresthatexceedtherequirementsofthenationalbuildingstandards. This decision was informed by multiple factors including budget constraints,concerns from the CoCT around additional pressures on low-income households throughloadshifting,theneedtoreducecomplexityandloweringtherisksthatmaybeassociatedwithmultiple technology interventions. In addition, due to the efficient design proposed,thereislimitedpotentialforadditionalefficiency.The following supply-side options were identified for evaluation and inclusion in thebusinesscasescenariosthatweredevelopedandinvestigated:

• Electricityfromthegrid;• SolarPV(rooftop);• Gas(forthermal,cooking,managedbyalocalSMME);and• Bulksolarwaterheaters.

FigureDbelowdepictstheenergydemandmodelledfortheentiredevelopmentinrelationtovariousenergysources–onewithandonewithoutgasforcooking.FigureEdepictstheenergydemandforthenon-residentialcomponentofthedevelopment.

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

KWh/

year

Total development

Farm 694 Non residential Kosovo Non residential Vusi Non residentialFarm 694 Residential Kosovo Residential Vusi Residential

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement vi

FigureD:Residentialenergydemandwithandwithoutgasoptions

FigureE:Energyuseacrossthenon-residentialcomponentofthedevelopmentTheresultisthatthegridcouldmeetbetween41-64%oftheprojectedenergyneeds(withandwithoutgas);solarPVwouldmeet35-36%ofenergyneedsandwouldfeedin17GWhof surplus per year. In the gas scenario, this particular sourcewillmeet 25% of the totalenergyneeds.ThepreferredsolutionissummarizedinFigureFbelow.

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement vii

FigureF:PotentialenergypackagesTableIbelowshowsthemodelledelectricityconsumptionfromvarioussourcesacrosstheentire development and the amount of electricity fed back into the grid for each of theenergypackages.TableI:Summaryofenergysolutionpackages Non-Residential Residential-lowdemand

Referencecase PV + Gridsolution

Referencecase PV + Grid +Feedin

PV + Grid +Feed in +gas

GridMWh/year 1987 1187 24114 15352 8816

SolarMW n/a 0.47 n/a 21.48 21.48

Gas MWheq/year n/a n/a n/a n/a 6000

Grid feed inMWh/year n/a n/a n/a 17099 16563

The preferred energy solution is estimated to cost approximately R 200 million (at netpresent value) to service the proposed maximum number of units of 8,593 across the

•No additional DS measures beyond energy efficient building regulations (adds complexity risk& load shiftingputs pressure on low-come households)

Resi

dent

ial

22 –

43 G

Wh

per

year

(250

KWh

/ H

H /

Mon

th)

Demand Side (DS)

Supply Side (SS)

System Operation

•Grid•Solar PV (on rooftop gardens) for own consumption and with grid feed in (SSEG)•With & without Gas (thermal) –LPG cylinders delivered by a local company

•Smart meters•Systemmanagement(dataawareness, fraud detection, remote energy management)•Value added services (IT, data, TV, etc.)

•No additional DS measures beyond energy efficient building regulations

Non

-Re

side

ntia

l 2

GW

hpe

r ye

ar (1

33 –

333

KWh

/ m

2/

year

•Smart meters•City: low carbon energy generated

•Grid•Solar PV (on rooftop gardens) for own consumption & NO grid feed in

•Consumer & city: grid infrastructure leveraged•Consumer: Cross subsidization (value added services & other revenue generating options cover some of the energy system costs)•Community: jobs (if gas option implemented)•City: incentivise payment (bundled services leverage service with the highest appetite for payment)•City: fraud detection•City: low carbon energy generated•Private sector: revenue opportunities through the system operation platform (including sale of data)

Impacts

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement viii

development. Based on our calculations, the Levelised Cost of Electricity (LCOE) is R1.54/kWhfor thebasecasescenario (Eskom);R1.36/kWhfor therooftopsolarPVenergysolution that allows for feeding into the grid; and R 1.52/kWh for the rooftop solar PVenergysolutionthatallowsforfeeding intothegridandsupplementedbygasforcooking.The LCOE for the preferred energy solution represents an 11% improvement on the basecasescenario.BUSINESSMODELThe business model works within parameters provided by the CoCT’s SSEG programme.Sevenscenarioswereformulatedforthepurposesofthispre-feasibilitystudyusingamodeldeveloped to analyse the impact of ‘Residential Grid-tied Rooftop PV installation onHousehold's electricity costs and Municipality’s Income’3. Each of the scenarios wasinvestigatedintermsofthebenefitstotheend-usersandtothemunicipalityaswellasanythird party where applicable. Figure G provides a brief overview of the scenarios, thevariablesapplied,andcapturesthenetsavingstotheCoCTandeveryhouseholdforeachofthe scenarios explored in this pre-feasibility study. It is important to note that theintroductionofbothgasandsolarwaterheatersaddedadditionalcostwithoutequivalentbenefitintheformofincreasedsavingstohouseholds.Thepreferredmodelwasselectedbasedonitsviabilityintermsofbenefitstohouseholds,municipalityandthePPP.Thispreferredbusinessmodel–seeScenario5inFigureGbelow–assumed a PPP between the CoCT and the private sector reveals a net saving ofapproximately R 7,000 per household over the lifetime of the project for only amarginaldecrease in revenue to the CoCT. The scenario further allows for the financial risks to becarried by the PPP rather than the low-income households and is likely to introducesignificantco-benefits.Significantly, whilst the base case scenario (Eskom) benefits from the highly subsidisedlifelinetariffsofR1.02/kWh,ourmodellingindicatesthatinourpreferredsolution,thereisa viable business case which will provide an Internal Return Rate (IRR) of over 15%. Iffunders are able to invest through a tax-efficient Section 12J structure, this will createadditional upside to the project return. The viability of this approach needs furtherevaluationduringfeasibility.Itisimportanttonotethattheviabilityofthebusinessmodelisnot dependent on concessionary finance since we assumed a cost of capital of 11%,althoughareducedcostofcapitalwouldcertainlycontributetowardsoffsettingsomeoftheprojectrisksandwouldimprovetheinvestmentcase.

3Developed by Sustainability Innovation Lab (SIIL) in collaboration with SEA

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement ix

FigureG:Businessmodelofeachscenarioexplored

TableIIbelowprovidesahighleveloverviewoftheincomestatementoverthelifetimeoftheproject.While theanalysis above looksat the investment case fromabottomup realtermsperspective,theincomestatementbelowprovidesatopdownnominalIRR.TableII:PublicPrivatePartnershipincomestatementandcashflowforScenario5(preferredscenario)

Notesabouttheincomestatementabove:

• TotalcapexisestimatedatR215,000,000.• TherevenueequatedtoR228/household/month.

Year%0 1 2 3 4

Inflation%factor 1 1.06 1.12 1.19

Revenue 23,528,168 25,820,564 28,322,445 31,090,819

O&M ?4,300,000 ?4,558,000 ?4,831,480 ?5,121,369

Insurance ?2,365,000 ?2,365,000 ?2,365,000 ?2,365,000

EBITDA 16,863,168 18,897,564 21,125,965 23,604,450

Depreciation ?107,500,000 ?64,500,000 ?43,000,000

Finance%cost ?23,729,749 ?23,729,749 ?23,729,749 ?23,729,749

19 20 Total%

2.85 3.03

124,117,460 136,084,954 R1,300,468,832

?12,273,658 ?13,010,078 ?R158,178,042

?2,365,000 ?2,365,000 ?R47,300,000

109,478,802 120,709,876 R1,094,990,790

0 0 ?R215,000,000

0 0 ?R237,297,494

Interest ?15,372,500 ?15,133,064 ?14,867,289 ?14,572,279

Taxable%income ?106,009,332 ?60,735,500 ?36,741,324 9,032,171

Tax 0 0 0 0

PAT ?106,009,332 ?60,735,500 ?36,741,324 9,032,171

Cumulative%PAT ?106,009,332 ?166,744,832 ?203,486,156 ?194,453,985

Cashflow% 75,250,000?R% ?6,866,581 ?4,832,186 ?2,603,785 ?125,299

IRR 15.14%NPV R76,693,810 (discount%rate%15%)

0 0 ?R139,093,235

109,478,802 120,709,876 R740,897,555

30,654,065 33,798,765 211,739,673R%

78,824,737 86,911,111

442,246,772 529,157,882 529,157,882R%

78,824,737 86,911,111 645,953,623R%

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement x

• The Operation & Maintenance cost is estimated at 2% of capex escalating atinflation,andinsuranceat1.1%ofcapex.

• TheprojectfinancestructureisassumedatDebtEquityof65:35.• Annualinflationof6%isassumed.• Thecostofdebtis11%.• Theloantermisover10years.• Theaccelerateddepreciationyearsare1,2,3:50,30,20.• Theprojectbecomescashflowpositiveinyear5.

OTHERBUSINESSMODELPOSSIBILITIESAs current legislation stands, Eskom has the exclusive right to procure electricity fromIndependent Power Producers. The CoCT is currently challenging Eskom’s single–buyerstatus incourtand if successful, thiswill allow theCoCT topurchaseelectricity from IPPs.Thiswillopenupanewandperhapssimplerbusinessmodelforthisproject.TherooftopIPPwillbeabletosellelectricitygeneratedintothegridtotheCoCTwithoutthecomplexityoftheSSEGprogramme.ApartmentblockscanineffectsublettheirroofspacetotheIPPandreceivearentalincomethatcaneitherbepaidoutorcanbeusedtooffsetelectricitybills.CO-BENEFITSAside from savings in household electricity costs, this project will bring a host of otherbenefits.Significantly,itrepresentsanopportunitytostimulatetheregionalgreeneconomyandsupportfurtherdevelopmentofgreentechnologyvaluechainsthathavethepotentialto create jobsanddrive local innovation.Within thedevelopment itself, this initiativewillstimulate local economic development through upskilling and employment of residents inthe operations and maintenance of SSEG systems on hundreds of apartment rooftops.WhilstexportbacktothegridfromSSEGisasmallpartoftheadditionalvaluederivedatanindividualhouseholdlevelduetotheSSEG’slowfeedintariff(R0.69/kW),onaggregatethisrepresents17GWh/yearofcleanenergy into theCoCT’sgridor theequivalentofa10MWutility-scale solar PV facility. With significant possibilities for further upscaling, and theintroductionofenergyasaservicepaymentmodelwithasmartphone-enabledPay-As-You-Go(PAYG)paymentplatformtoimprovepaymentcompliance,theprojecthasthepotentialtobecomeagamechangerfortheCoCT.FURTHERINVESTIGATIONNEEDEDDURINGFEASIBILITYBasedonthefindingsofthispre-feasibilitystudy,weconcludethatthepossiblealternativeenergysolutionwouldnotonlymeetthesustainableenergyneedsofthetargetcommunity,but also serve the interests of a range of public and private stakeholders. The preferredenergysolutionandbusinessmodelneedtobe further interrogatedat feasibilitystage. Inparticular,wewillexplore:i)detailedcostingfordifferentenergysources;ii)arrangementsfor metering and billing; iii) assessment of co-benefits; iv) bundling of services; v) thestructure of a viable PPP; vi) amendments to the SSEG fixed tariff for low-incomehouseholds;andvii) theacceptabilityof theproposedenergysolution to themunicipality,DoHSandimportantlythebeneficiarycommunity.Additionally,wewouldalsoneedtobuildsupportamongststakeholdersandidentifychampionswiththeCoCTwhocanhelpdrivetheprojectforward.Aspartofthisstudy,wehaveengagedwithpotentialfundersbothinSouthAfricaandintheUK and the initial reception to the project is encouraging. During feasibility, the fundingworkstreamwillrequiresignificantattention.

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement xi

WHYISTHISPROJECTIMPORTANT?Atthecountrylevel:

• SouthAfricahasmadecommitmentstoreduceCO2emissions.Thiswillbeachievedthrough renewable energy implementationboth at utility-scale aswell as throughSSEG programmes that are now active in a number of municipalities around thecountry.

• There is a shortageof2.1millionhousingunitsof accommodation in the country,withmostofitneededintheprimaryandsecondarycities,wheremediumandhighdensity housing is the optimum solution to support affordable infrastructure,transportandwalkability.

• The ‘green economy’ has the potential to create socio-economic developmentalbenefits suchas jobsand skillsdevelopment. If implemented successfully, thishasthepotentialtobetransformativeamongsttheurbanpoor.

• This project has the potential to create a replicable model for greening in low-income urban centres throughout sub-Saharan Africa and this knowledge andexperiencecanbeexportedtoothercountriesintheregion.

Atthecitylevel:

• TheprojectisalignedwiththeCoCT’sstrategytodiversifyitsenergysupplyandtoprovidesupporttothegreeneconomy.

• Theproject is replicable acrossnew low-incomehigh-densitydevelopments in themetro.

• Improvedcollectionmechanismsforcityservices in low-incomeareaswillassist toreducetheserviceburdenontheCoCT.

• The programme creates opportunities to bundle additional services that have adevelopmental impactsuchas internetdataandtelevisionunderasinglepaymentplatform.

• Theadditionalrentalaccommodationcanbeplannedforandcanavertthepiratingof electricity, which is common currently in informal settlements and backyardshacks.

Atthehouseholdlevel:

• Nexttofoodandhousing,energyisthebiggestexpenseforlow-incomehouseholds.A key driver of the project will be its ability to reduce the burden of escalatingelectricitycostsforpeopleatthebottomofthepyramid.

• It has the ability to create employment opportunities and skills development inareaswithhighunemploymentintheCoCT.

SUMMARYNewhousingdevelopments in theCoCT requireadensification strategy toaddress severehousingshortages.TheplanningteamledbyARGDesignhavebeencontractedbytheDoHSto leadtheprocessonthiscatalyticproject intheSouthernCorridor,hometothepoorestresidents in the metro. Renewable energy has been proposed as one of a basket ofstrategiestoaddressunemployment.TheprojectenvisagesmultiplesolarPVarraysontherooftopsof sectional titleapartmentsproviding localemploymentandpotentiallyamodelfor future urban development. The CoCT’s SSEG Programme provides the regulatoryframework for the project that sees a significant export of low-carbon energy into theCoCT’sgrid.Theprojecthassignificantco-benefitsforallkeystakeholders.Thetotalsizeof

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement xii

theenergycomponentoftheproject isR200millionandprovidesa20yearequity IRRofover15%toinvestors.FinallyiftheCoCTissuccessfulinitscourtbidtochallengeEskom’ssinglebuyerstatus, thiswillopenupanewandperhapssimplerbusinessmodelforthisproject,i.ethedirectsaleofelectricitytotheCoCT.Atthisstage,itisnotclearwhenthematterwillbefinalised.TheprojectteamledbySSN,islookingtosecurefurtherfundingtocompletethenextphaseofprojectpreparation.Ifyouareinterestedintheprojectorwouldliketoreceiveacopyofthepre-feasibilityreport,pleasecontactJohnThorneatjohn@southsouthnorth.org.

ExecutiveSummaryofPre-feasibilityReport:Low-CarbonEnergySolutioninKosovoInformalSettlement xiii

WHOWEARESSNpartneredwithPlanetCapitalEnergy(PCE),CarbonTrustandARGDesigntodeliverthisreport.Thecoreteam–consistingofSSN,PCEandCarbonTrust–workedincollaborationtodevelop the technical aspects of the pre-feasibility study while ARG Design, tasked todevelop the contextual development framework for the re-development of Kosovo,facilitatedliaisonwiththekeygovernmentstakeholders.SSN: SSN has significant experience in climate changemitigation and adaptation in Africaandhaslednumeroussuccessfulmulti-disciplinaryandcross-sectorresearchandconsultingprojectsonthecontinent.ThefocusofSSN’sworkinSouthAfricahasbeenpredominantlyintheenergysector.SSNhasdoneextensiveworkinthelow-costhousingsectoranditsrecentHopefield Home Improvement Project has been identified as a flagship socio-economicdevelopmentprojectofSouthAfrica’sRenewableEnergyProgramme.PCE: PCE facilitates and develops sustainable and affordable energy projects. It createspartnerships in ownership and governance among community and business consumers,regulatorsandprivateserviceproviders.PCEhasahighlyskilledteamwithdecadesofworkin sustainable development. The team is skilled in sustainability, energy systems, climatechange, environmental resource management, social development and stakeholderengagement.CarbonTrust:HeadquarteredintheUK,theCarbonTrustisanot-for-dividendcompany.Itprovidesarangeofadvisory,technologyinnovation,andassuranceservicesintheresourceefficiencyspacetobothpublicandprivatesectorclients. InAfrica, it increasinglyworksonprojectslookingtoimproveenergyaccess,andthequalityofenergyservicesforlow-incomegroups, and its flagship project is the delivery of the DFID-funded Transforming EnergyAccess programme (TEA), which looks to identify, and accelerate the development ofinnovative energy access businessmodels and technologies in sub-SaharanAfrica. It alsoauthored the Prosperity-funded guide to developingmini-grids in a South African contextuponwhichthisstudyhasdrawn.ARGDesign: ARG Design has a 30-year history of workingwith low-cost, sustainable andmediumdensitysustainablesettlementsolutions.Theirintra-disciplinarypracticecombinesurban design, town planning, architecture, landscape design and sustainable anddevelopmental approaches to settlement design. ARG Design has been appointed togeneratetheconceptualdevelopmentframeworkandsupportthelanduseplanningfortheKosovoredevelopmentproject.Theobjectiveoftheconceptualdevelopmentframeworkisto frame the high-level feasibility of the built environment and the sustainable andlivelihood strategies that will support the affordability of households living in mediumdensityformalhousing.Thelivelihoodstrategiesincludeenergysolutions.