Electrifying rural Moroccan households: Electricité de France (EDF), Tenesol, Total

The provision of additional power generation capacity for basic consumption needs, evaluated at 1kWh per family per day, amounts to about US$ 200 billion, all technical options included (connection to the grid, decentralized grids, solar home equipment, etc.). In regions where housing is highly scattered it is impossible for the electricity grid to reach each individual house in a cost-effective way.

However, by using solar power the inhabitants of these regions can also enjoy the benefits of electricity. Through a unique program developed by Morocco’s National Electricity Office (ONE), EDF, Total and Tenesol (previously Total Energie) are helping remote Moroccan villages access electricity through solar power installations. This innovative program ensures not only the supply of solar equipment but also a real local service in the long term. This is especially important because a simple aid program would not include maintenance after installation.

EDF’s involvement in the Moroccan program stems from a unique joint-venture between EDF, Total and Tenesol (a joint subsidiary of EDF and Total, specializing in solar electrification since 1983), called Temasol. Its activities are based on the inclusive business model of EDF’s Access program, which involves the creation of small, locally run companies to provide rural services including electricity, water, gas and telephone services in order to stimulate local economic activity and contribute to wealth creation.

The program

Today, Temasol is working in 24 Moroccan provinces to provide solar power to more than 53,000 customers.

• Phase 1: 4 provinces where installations began in 2002 and will finish in 2005 with 16,000 customers.
• Phase 2: 20 provinces where installations will start in 2005 for 37,000 clients.

The next likely phase will touch some 5,500 more customers.

In order to generate its own electricity, each house is fitted with a solar home system (solar panel + battery + controller). The equipment offered satisfies the main requirements of rural households: lighting (4 to 8 lamps) and a socket for a television, a radio, a mobile phone charger, or other small audio-visual appliance.

The cost for consumers

Each customer pays an initial connection fee, ranging from US$ 80-465, and then a monthly fixed service fee, ranging from US$ 7.50-17.50, depending on the level of service chosen.

The fees are adapted to the budgets of local households: approximately the same amount was being paid for candles, gas, batteries, or battery recharging. They are reasonable because they are equivalent to the amount paid for similar consumption rates by customers connected to the grid. The prices are in fact lower than the actual cost of the equipment and service received. This is because the ONE gives a grant for each installation in order to provide equal energy access opportunities to the Moroccan population. Temasol acts as an investor by also participating in the financing of the equipment.

Program cost and financing

The initial average cost of an installed system is approximately US$ 800 (630 Euros):

• The ONE provides a grant, which covers around 66% of this cost;
• The customer provides around 10% in connection fees
• Temasol contributes the balance of around 24%.

The monthly fees collected by Temasol enable it to cover the amortization of its initial investment, replace equipment (including batteries) and cover running costs.

Temasol has benefited from financial support in the form of an equipment grant (US$ 28.5 million– an average of 5,100 Drh excl VAT per customer) from the ONE based on a US$ 6.5 million grant from the German Bank KfW and on a US$ 6.5 million soft loan of the French Development Agency (AFD) to the ONE. Furthermore, the program has also been supported by the FFEM (French Fund for the World Environment) in the start-up phase, e.g. US$ 1.5 million for electricity.

Each customer also contributes to the initial financing of the operation through the connection fee (US$ 4 million). The company’s shareholders (Tenesol 35.6 %, Total Maroc 32.2 % and EDF 32.2 %) have each brought additional financing (US$ 4.5 million).

Positive impacts on daily lives

Temasol’s activities have had positive impacts on the daily lives of the population:

• The business creates jobs in areas where they are rare (currently 83 direct employees, and 31 subcontractors). All the employees follow high-level in-house training (technical, quality, customer relations, etc.)
.
• Bringing electricity to rural populations improves living conditions, which encourages local farmers and livestock breeders to remain on their land, rather than moving to the small towns that are connected to the grid.

The ONE decided to use solar power, in addition to more traditional technologies, in order to advance the geographical limits of electrification and to enable populations living in areas of scattered habitat to have access to electricity.

Everyone benefits

In April 2005, more than 12,000 customers had received solar home systems at an installation rate of 400 to 700 per month. At this rate, the 16,000 customers of Phase I will have been connected before the end of 2005, or one year in advance of the contract schedule. Phase II (37,000 customers in 24 other provinces) will start in the second quarter of 2005. The installation of equipment in the 37,000 households will last 3 years and then the service will be ensured for 10 years. The estimated budget for this second phase is US$ 27 million. ONE will provide US$ 22 million.

In April 2005, for Phase I, Temasol already had:

• 83 direct employees (17 at head office and 66 in the local branches);
• 31 subcontractors (to top-up the internal installation teams);
• 1 head office and 7 local branches in the regions concerned;
• 24 vehicles;
• Accounting, customer and maintenance management software adapted to “solar concessions”;
• A 99% payment rate (installations are dismantled after 2 months’ non-payment);
• Operations that conform to the business plan – economic viability will mean the activity is sustainable.

From these successful beginnings, the solar program will now be extended to more than 110,000 households, making Morocco a world leader in the use of solar power for rural electrification.

Further information

• Download the complete case study ( 109 kb/ 2,300 kb)
• EDF
• Total
• Tenesol (previously Total Energie)

Author WBCSD Publication Date 2 Jun 2005 Document Type Case studies Issue/Topic Business Role/CSR Development Electricity Utilities Energy & Climate Region Africa Country Morocco Company EDF Group Include In RSS WBCSD News & Updates		2.3 MB   109 kb