by chandirekeram@practicalaction.org.zw

Issue: 58

Journal section: General Articles
Download article in PDF format: Download fiancial and ownership models for microhydro schemes in South Africa.pdf

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Received: 2010-09-07


Micro-hydro schemes are built for marginalised communities in South Africa under a project run by Practical Action Southern Africa called the ‘Catalysing Modern Energy Service Delivery to Marginalised Communities in Southern Africa' project, abbreviated to ‘The Regional Hydro’ project. The project is designed to enhance Practical Action’s work in the South African community by designing business and financial models for sustainability. These models address issues at three stages of a micro-hydro scheme – at capital injection stage, at operation and maintenance stage, and also at expansion or replication stage. This article looks at the financial models adopted by three schemes in the three countries of Zimbabwe, Mozambique and Malawi during capital injection stage. The first financial model, called the Shares for Dividends (ShareD) model, has a capital structure of grant to equity where the equity is the community contribution. This community contribution is mostly in the form of labour and other locally available materials for the construction of the scheme. The second model, called the Generator model, involves an individual business person obtaining a loan to construct a weir, a canal, a forebay tank and a power house right up to electricity generation stage. The business person will repay the loan from the income he/she derives from the households and customers that he/she connects to the scheme. The third model, called the BOT model, involves the energy department of the Mulanje Mountain Conservation Trust (MMCT), who build and operate the scheme for an initial two to three years, after which time they will transfer the ownership of the scheme to the community.

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Tags: Community    Microhydro    Ownership    BP58   

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