The Rural Electrification Authority (REA) STRATEGIC PLAN

Transcription

1 The Rural Electrification Authority (REA) STRATEGIC PLAN 2428

2 Rural Electrification Authority STRATEGIC PLAN 2428 January 24

3 Table of Contents Foreword Acronyms and Abbreviations iii iv Executive Summary Introduction 4 Review of the Strategic Plan Internal Organisational Analysis External Environmental Analysis 2 SWOT Analysis 4 Key Success Factors 5 Strategic Direction Vision Statement 5 Mission Statement 5 Core Values 5 Areas of Strategic Focus Implementation Plan 7 The Board of Directors 7 The Board Committees 7 Executive Management 7 The Budget 8 Monitoring and Evaluation of the Plan 8 External Review of the Strategic Plan 9 PreConditions and Assumptions for the Implementation of the Strategic Plan 9 Appendices 2 Appendix : Logframe 2 Appendix 2: Monitoring and Evaluation Template 3 Appendix 3: Detailed Budget 38 ii Rural Electrification Authority Strategic Plan 2428

4 Foreword Since 26 when the Rural Electrification Authority (REA) became operational, it has sought to accelerate the pace of implementation of the national electrification programme for rural areas. The target set by the Rural Electrification Master Plan (REMP) to raise the access rate in the rural areas to 5 per cent by 23 is only attainable through a comprehensive, systematic and wellfinanced electrification programme. For this reason, the Authority formulated periodic Strategic Plans based on the REMP but taking into account an evolving environment for its operations. Reviewing past experience and the progress achieved todate, this Strategic Plan proposes some changes of emphasis in electrification methods. In particular, under the Plan, the Authority will make greater use of the opportunities provided by renewable energy. In some areas, this will involve minihydro schemes, in others it will be solar and even wind, where conditions will be found favourable. Apart from giving additional impetus to the growth of rural access to electricity, this approach will reduce capacity demand on the national grid arising from the electrification programme. This approach implies a broadened front for rolling out the rural electrification programme. The Rural Electrification Act of 23 anticipated this by mandating the Authority to promote the participation of the private sector. Under this Strategic Plan, the Authority will make deliberate efforts to facilitate private sector investment in small generation plants for both mini and offgrid schemes. Experience elsewhere shows that these are effective means for supplementing the gridextension work that currently dominates the work of the Authority but whose limitations are well known. The key factors of success for the Strategic Plan 2428 are: the financing of the programme, and the technical capacity of the Authority. Therefore, the Authority looks to the continued commitment of government to rural electrification, especially in the context of the priority it attaches to rural development. The Authority also wishes to encourage cooperating partners to continue and expand their valuable support. To achieve the required rate of implementation, the rural electrification programme does not only need finances but it also requires the technical expertise which the cooperating partners are wellplaced to provide. I am confident that with the support from government, a dedicated staff, and collaboration with friends of the programme, we can reach the targets set in the Strategic Plan Prof. Jorry M. Mwenechanya BOARD CHAIRPERSON Rural Electrification Authority Strategic Plan 2428 iii

5 Acronyms and Abbreviations AG AIDS ASF CD CSO EIA EPC ERB EU GDP GIS HIV ICT JICA KSF LCMS M&E MMEWD NGO REA REF REMP RGC SIDA SPP ZEMA ZNBC Auditor General Acquired Immune Deficiency Syndrome Area of Strategic Focus Compact Disc Central Statistical Office Environmental Impact Assessment Engineering Procurement and Construction Energy Regulation Board European Union Gross Domestic Product Geographical Information System Human Immunodeficiency Virus Information Communication Technology Japan International Cooperation Agency Key Success Factors Living Conditions Monitoring Survey Monitoring and Evaluation Ministry of Mines, Energy and Water Development NonGovernmental Organisation Rural Electrification Authority Rural Electrification Fund Rural Electrification Master Plan Rural Growth Centre Swedish International Development Agency Small Power Project Zambia Environmental Management Agency Zambia National Broadcasting Corporation iv Rural Electrification Authority Strategic Plan 2428

6 Executive Summary The Rural Electrification Authority (REA) herein known as the Authority was established through an Act of Parliament with the mandate to promote the rural electrification agenda of government. Some of the functions of the Authority are to administer and manage the Rural Electrification Fund (REF); to develop, to implement and update the Rural Electrification Master Plan (REMP) for the systematic electrification of the rural areas; to promote the utilisation of available electrification technological options to enhance the contribution of energy to the development of economic and social activities namely agriculture, manufacturing, mining, tourism, commerce, health and education in rural areas; and to mobilise funds from within and outside Zambia in support of rural electrification among other functions. In furtherance of these functions, REA has formulated a strategic plan aimed at increasing access to electricity in rural areas. Key Success Factors The Key Success Factors (KSFs) for any Rural Electrification (RE) programme are as follows: (a) Effective Project Management; (b) Ability to attract a constant and sustainable inflow of ; (c) Effective organisation structure with a skilled workforce; (d) Harness stakeholder support into RE programmes; and (e) Efficient and effective procurement of works. The Strategic Direction The strategic direction of the Authority shall be guided by the vision, mission and core values as follows: The Vision Statement The vision of the Authority is: The premier provider of electricity infrastructure for rural areas. The Mission Statement The mission statement of the Authority is: To provide electricity infrastructure to rural areas using appropriate technologies in order to contribute to the improvement of the quality of life. Core Values The Board of Directors, management and staff of REA commit themselves to the following values and ethos that will govern their behaviour in the discharge of their mandate during the fiveyear Strategic Plan 24 28: (a) Transparency; (b) Accountability; (c) Integrity; (d) Innovativeness; Rural Electrification Authority Strategic Plan 2428

7 (e) (f) Diversity and Inclusiveness; and Team Work and Excellence. During the period 2428 REA shall focus on the following five Areas of Strategic Focus (ASF) with key actions: ASF : Enhancing Resource Mobilisation for Rural Electrification Key Actions (i) Increase and maintain number of financiers; and (ii) Develop donor coordination platform. ASF2: Increasing Access to Electricity in Rural Areas Key Actions (i) Develop Kasanjiku minihydro Power Station in the Ntambu Rural Growth Area; (ii) Undertake feasibility studies on mini hydro development projects; (iii) Expand the National Electricity Grid; (iv) Carry out feasibility studies of other renewable energy technologies; (v) Promote solar energy solutions in rural areas; (vi) Develop solar energy technologies; (vii) Carry out feasibility studies in biomass, geothermal and wind technologies; (viii) Promote the utilisation of alternative renewable energy technologies in rural areas; and (ix) Institute measures for increased access to electricity. ASF 3: Promotion of Private Sector Participation in Rural Electrification Key Actions (i) Develop programmes for local and international resource mobilisation; (ii) Identify technical and financial partners for private sector development of Small Power Projects in generation and distribution; (iii) Develop a framework on how to implement and manage capital subsidies for generation and distribution projects; Develop a comprehensive framework for Small Power Projects (SPP) that includes technology specific tariff structures and tariff review methodologies in conjunction with the Energy Regulation Board; (iv) Establish or identify institutions for the generation, distribution and supply of electricity to rural areas; Undertake appropriate road shows to attract investors and participants in Small Power Projects; and (v) Strengthen the institutional framework for the promotion of Small Power Projects in conjunction with ERB and ZESCO. ASF 4: Communication of REA Programmes to Various Stakeholders Key Actions (i) Review and update the communication strategy; (ii) Hold meetings with stakeholders; (iii) Production and dissemination of reports on rural electrifications; and (iv) Conduct electronic media documentaries; 2 Rural Electrification Authority Strategic Plan 2428

8 ASF 5: Strengthening Organisational Effectiveness Key Actions (i) Develop Institutional and human resource capacity building programmes annually; (ii) Review and enhance the ICT systems; (iii) Initiate and recommend the revision of the Rural Electrification Act; (iv) To develop a FiveYear Rolling Plan based on the REMP; (v) Review the Strategic Plan; (vi) Procure new office premises for REA head office; and (vii) Enhance Monitoring, Evaluation and Control. A detailed log frame showing these areas of strategic focus and key actions are in appendix to this plan. Implementation Framework The implementation of this fiveyear Strategic Plan shall be driven by the Board of Directors and the Chief Executive Officer. The implementation framework shall comprise the detailed logframe, the budget and the monitoring, evaluation and control mechanism. The Board of Directors The Board of Directors have the primary responsibility to provide policy guidance and direction to ensure that this Strategic Plan is implemented and the expected outcomes realised. The Board through its regular quarterly board meetings will receive reports from the Chief Executive Officer and top management on the status of implementation against the annual work plans and budget among other matters. Executive Management The daytoday implementation of this Strategic Plan shall be the full time responsibility of the Chief Executive Officer and the management team. The executive management team shall prepare annual work plans and budget in line with the Strategic Plan. The Chief Executive Officer will monitor and evaluate the performance of the Strategic Plan and report to the Board of Directors on quarterly basis. This will be done in line with the objectives and outputs that are identified under each area of strategic focus. PreConditions and Assumptions for the Strategic Plan The mandate of REA remains central to the government s strategy of taking development to rural areas. With the commercialisation of ZESCO, REA is expected to provide rural electrification services where ZESCO may find it uneconomic to invest. Rural Electrification Authority Strategic Plan

9 Introduction The Rural Electrification Authority (REA) is an agency of government with the mandate to promote the rural electrification development agenda. It was established under the Rural Electrification Act No. 2 of 23. The Act stipulates the functions of the Authority as follows: (a) (b) (c) (d) (e) (f) (g) (h) (i) Administer and manage the Rural Electrification Fund (REF); Develop, implement and update Rural Electrification Master Plan (REMP) for the systematic electrification of rural areas; Promote the utilisation of available rural electrification technological options to enhance the contribution of energy to the development of agriculture, industry, mining and other economic activities in rural areas; Mobilise funds from within and outside Zambia in support of rural electrification; Offer on a competitive basis, the construction of rural electrification projects and periodically publish information on programmes being carried out; Design and offer on a competitive basis to developers or operators smart subsidies for capital costs on projects that are designed to supply energy for development of rural areas; In conjunction with stakeholders, develop mechanisms for the operation of grid extension networks for rural energy supply systems; Finance project preparation studies for rural electrification projects in accordance with guidelines developed and approved by the Authority; and Recommend to government policies for the enforcement of access to electricity by the rural population. In 2, the government launched a Rural Electrification Master Plan (REMP) to provide a roadmap for the rural electrification programmes through the identification of,27 Rural Growth Centres (RGCs) throughout Zambia s nine provinces. In 28, the Board of the Authority approved the fiveyear Strategic Plan for implementation from 29 to 23. The Board and management noted that since the life of the Strategic Plan was coming to an end on December 23, a successor Strategic Plan for the period 24 to 28 needed to be formulated to build on the success of the previous Strategic Plan. REA invited individual consultants through the public media to procure consultancy services to review the previous Strategic Plan and develop the subsequent plan. This Strategic Plan has been developed to provide a roadmap to the operations of REA for the period The review and formulation of the Strategic Plan was a consultative process involving external stakeholders, cooperating partners, government officials and the beneficiary communities in the project areas. In addition, the Board and management were fully consulted and participated in the plan s development process. 4 Rural Electrification Authority Strategic Plan 2428

10 Review of the Strategic Plan The Strategic Plan was set out to achieve the following objectives: (a) (b) (c) (d) (e) (f) (g) To implement the Rural Electrification Master Plan; To market the Rural Electrification Master Plan; To promote stakeholder awareness and participation in rural electrification programmes; To manage and administer the REF in order to effectively implement the Rural Electrification Master Plan; To strengthen the institutional capacity of REA to effectively implement the REMP; To promote utilisation of appropriate alternative rural electrification technologies in order to enhance economic activities in rural areas; and To identify and recommend policies aimed at improving the effectiveness of the rural electrification programme. The performance of REA against each of the strategic objectives is as given in the subsequent sections below. Strategic Objective : To Implement Rural Electrification Master Plan During the period under review, the Rural Electrification Master Plan (REMP) was launched on 2 April 2. The REMP identified,27 Rural Growth Centres (RGCs) for electrification by 23 with a target of achieving a 5 per cent rural electrification access rate by the end of 23. According to the Central Statistics Office (CSO) 2 Living Conditions Monitoring Survey (LCMS), about 5 per cent of households in rural areas were connected to electricity. The assessment of access to electricity used by the Central Statistics Office (CSO) indicators is based on the actual number of households with electricity connections (for lighting and other uses). REA depends on CSO for the generation of statistics on rural electricity access rate as surveys of such a nature are a costly undertaking. However, the figures for rural electricity access rate for 22 and 23 were unavailable as the LCMS for 22 have not yet been conducted by CSO. The Strategic Plan did not have set performance targets against which actual performance could be measured. To address the measurement challenges faced, annual work plans were developed with a rolling plan and a monitoring and evaluation manual for application. During the period of the Strategic Plan, REA completed 67 grid extension projects against 6 planned projects as indicated in Table below. The seven extra projects were carried forward from the previous period. Table : Grid Line Extension upto 22 Performance indicator Achievements to date (292) Approved projects 6 Completed projects 67 Percentage performance 7% A total of four (4) feasibility studies were carried out for five (5) proposed minihydro projects at Chanda and Chavuma Falls in Chavuma District; Chikata Falls in Kabompo District; Kasanjiku Falls and Zengamina II in Mwinilunga District. In addition, two applications from private entities for support in the development of mini hydro projects were considered. The uptake of the mini hydro projects by investors has not been as expected Rural Electrification Authority Strategic Plan

11 because of the economic viability of such projects to the private sector. In addition, the Authority did not have the requisite skills and competencies to develop mini hydro projects. The priority solar energy projects were identified in the REMP. The development of solar projects was based on the annual work plans for each year. The performance of REA in promoting clean energy (solar) was very good but there was no basis to compare between the actual performance and planned targets/outputs. The projects captured in the REMP per year were not all adopted hence the measurement challenge. The success rate of REA was approximately 62 per cent of the projects approved in five year period (2922). Table 2 below shows the number of projects approved by the board and those that were completed over a seven year period. The increased access to electricity projects was not fully implemented to realise the benefits of more people accessing electricity. The increased access to electricity project was funded by the World Bank with REA being a fund manager and ZESCO the implementer. Table 2: Approved and Completed Solar Energy Projects 2622 Project Status Approved Completed Transferred to Beneficiary Approved Completed Transferred to Beneficiary However during the period under review, REA had not updated the rural electrification master plan. There were no clear guidelines and justifications for the adoption or selection of projects outside the REMP. A number of procedure manuals were developed during the period though some of them are not yet approved by the Board. 6 Rural Electrification Authority Strategic Plan 2428

12 Strategic Objective 2: To Market the Rural Electrification Master Plan Following the launch of the REMP, the Japanese International Cooperation Agency (JICA), Swedish International Development Agency (SIDA), the European Union (EU) and the World Bank were some of the major cooperating partners who bought into the programme and supported the rural electrification programme in Zambia. In addition, government was the main target for marketing the REMP as it remained the largest contributor to the RE projects. The support from JICA came to an end and was unlikely to be extended because it achieved most of the capacity building objectives in the contract. Based on the donor coordination group meetings, SIDA reported that the European Union would be joining the energy sector from 25 and the Chinese were also interested in the sector. The World Bank would continue to support the Increased Access to Electricity projects. These cooperating partners came on board because they identified their support to the sector with the objectives set out in the REMP. In addition, Annual Reports with audited financial statements were prepared and presented to Parliament for political and budgetary support. There is however room for improvement in marketing the REMP to attract more supporters to the sector including the Government of the Republic of Zambia in order to address the declining budgetary allocations to REA over the years. Table 3 gives a summary of achievements and challenges under this strategic objective. Table 3: Marketing the REMP S/No.. 2. Performance Indicators Number of potential financing institutions identified and support solicited. Number of awareness publications produced annually. Achievements Four (4) institutions supported the rural electrification sector (i) Five (5) Annual Reports presented to Parliament; (ii) 25 copies of the REMP published and distributed; (iii) Twenty (2) Quarterly publications of electrification newsletter; (iv) Nine (9) Media reports during commissioning projects published; (v) Advertisements for various tenders were made in the print media; and (vi) Targeted meetings with parliamentarians were held. Strategic Objective 3: To Promote Stakeholder Awareness and Participation in Rural Electrification During the period under review, the communication policy and strategy were formulated to guide information sharing with various stakeholders. The Authority participated at the Agriculture and Commercial Shows that were held each year to create awareness of its activities to various stakeholders. In addition, REA also participated in many other annual national exhibitions such as the International Trade Fair, Energy Conservation Week, etc. Community education and awareness campaigns were conducted in the various project areas. A number of education and information materials were produced and circulated to various stakeholders. In the same vein, the REMP document was published and printed both in hard and electronic copy (CD) and Rural Electrification Authority Strategic Plan

13 was submitted to Parliament for distribution to all Members of Parliament. A quarterly newsletter was published, which was widely circulated and a website was established to post various pieces of information concerning the operations of REA. Annual Reports with audited financial statements were published for each of the four years of the review. The financial reports were clean and never qualified throughout the planned period. During this period under review, a number of television documentaries and commercials were developed and aired on national and private television stations. A 23series radio programme was produced and aired on ZNBC s Radio 2. Press statements were also issued on various activities such as new projects to be undertaken and those that were commissioned. The Authority also undertook a number of facility/field visits for both internal and external stakeholders such as government officials, Board Members, cooperating partners and the media to appreciate the work of REA and gain stakeholder support. Table 4 below shows the various awareness programmes carried out under this strategic objective. Table 4: Stakeholder Awareness and Participation S/No. Performance Indicators Achievements Communication policy Central data base of REA projects Electronic media programmes produced Number of articles, adverts, features in print media Number of communication meetings/workshops/ seminars The Communication policy and strategy were developed. Stored with the Monitoring evaluation office Annual Report highlighted such programmes Reports and adverts for projects were covered Community Sensitisation and Education Awareness reports for all projects were produced. Strategic Objective 4: To Manage and Administer the REF in Order to Effectively Implement the Rural Electrification Master Plan The management and administration of the Rural Electrification Fund (REF) was largely applied to support the various grid extension projects and the solar energy projects particularly the electrification of palaces of their Royal Highnesses. The Operational and Finance manuals indicating how the smart subsidies and REF would be allocated to developers were developed. One annual monitoring report was submitted in 22 as the Monitoring and Evaluation Unit was only established at the end of 2. Prior to 22, there was no inhouse capacity to prepare two annual monitoring reports. All public tenders of projects were always published in the print media in order to promote its ethos of 8 Rural Electrification Authority Strategic Plan 2428

14 transparency and accountability. A summary of various achievements made are shown in Table 5 below. Table 5: Manage and Administer REMP S/No. Performance Indicators Achievements Guidelines for smart subsidies developed and implemented by 29 Number of appropriate institutions identified to generate, distribute and supply electricity annually Amount of funds released to REA annually compared to the budget Audited financial reports produced annually Monitoring reports submitted to financing institutions twice annually Nine (9) manuals for various aspects including an operational manual that gives smart subsidies were developed No appropriate institutions to generate, distribute and supply electricity were identified. GRZ funding has declined over the life of the plan despite increasing demand for rural electrification services. Audited financial statements were produced annually Monitoring reports submitted once annually. However, there was still work to be done in the review and updating of the Procurement and Supplies manual to make it to be in line with the new Zambia Public Procurement Authority Guidelines. In addition, the implementation manual for the development of guidelines for institutions to generate, distribute and supply electricity was not developed. The audit manual was still in the development phase to enhance quality assurance and compliance with various systems and procedures. The Internal Audit Unit was established in 2 in order to promote good governance. Strategic Objective 5: To Strengthen the Institutional Capacity of REA to Effectively Implement the REMP The strategies to achieve this objective were useful but not quite sufficient to address the needs of the Authority. The officers of the Authority participated at various competence based capacity building workshops over the life of the plan, which were aimed at strengthening the capacity of REA to implement the REMP. A structure for REA was redesigned and approved though the structure was not fully filled up to the end of the plan cycle due to inadequate funding. The JICA funded capacity development project could not fully achieve the intended objectives because of understaffing, as staff could not always attend the onthejobtraining because they were hard pressed with their work schedules. During the period under review, a number of key officers were appointed such as the Director of Human Resources and Administration while other officers were promoted to take up more responsibilities in their various roles. However, the staff turnover of senior officers may affect the institutional memory. The establishment of the Internal Audit and Monitoring and Evaluation departments was important developments in enhancing project management, controls and quality assurance in REA. The performance management system was rolled out and was operational. The various financial management systems such as risk management, asset management among others needed strengthening. However, the transport system was manual and preventive maintenance programmes needed to be enhanced. The GIS system would be updated. The Organisational structure needs to be filled up in order to implement Rural Electrification Authority Strategic Plan

15 the REMP. The ICT system requires to be modernised. Finally, the proposed acquisition of REA owned office space did not materialise. Table 6: Strengthening Institutional Capacity by REA S/No. Performance Indicators Achievements Organisational structure, terms and conditions of service Training of staff annually Own office space acquired by December 2 (i) A new structure with conditions of service was implemented in 2; and (ii) Human resource manual was developed (i) A number of training workshops were held for senior, middle management staff as well as junior officers; (ii) Key officers were promoted such as Finance Director, Manager Procurement, Director Technical Services and Director Support Services; and (iii) Key staff were employed such as the Director of Human Resources and Administration, among others (i) No new office premises have been procured Strategic Objective 6: To Promote Utilisation of Appropriate Alternative Rural Electrification Technologies in Order to Enhance Economic Activities in Rural Areas There were some studies that were carried to determine the suitability of different rural electrification technologies. Notable among these were the Biomass gasification and the solar minigrid studies. As a result, one mini solar grid project was implemented during the last fiveyear period. This project would be used as a model for implementing similar alternative technologies. Table 7: Appropriate Alternative Rural Electrification Technologies S/No. Performance Indicators Achievements. 2. Number of appropriate alternative technologies identified Number of projects using the alternative technologies Biomass and Solar minigrid studies were carried out. One solar minigrid was implemented Strategic Objective 7: To Identify and Recommend Policies Aimed at Improving the Effectiveness of the Rural Electrification Programme During the period under review, the Rural Electrification Act was in place, the Act was reviewed in the light of new policies which were developed aimed at improving the operations of REA. Rural Electrification Authority Strategic Plan 2428

16 INTERNAL ORGANISATIONAL ANALYSIS In carrying out the organisational analysis of REA, the McKinsey Consulting s 7S Framework was used to get an indepth understanding of REA and its chemistry. The 7S Framework is a tool used in the implementation as well as the review of the effectiveness of the Strategic Plan. The framework comprises Strategy, Structure, Systems, Styles, Skills, Staff, and Shared values (organisational culture). The strategy of the company was reviewed during the evaluation of the Strategic Plan (29 23). All the 7Ss should be linked together for effective implementation of organisational programmes. Structure The structure of REA was found to be very high with very senior management staff without immediate support officers suitable to take over or succeed the senior managers. There was no succession planning as gaps between the top managers and the direct reports needed to be reviewed. The departments were reported to be fragmented due to lack of an integrated system of linking departments horizontally. REA was functionally and mechanically designed such that there is lack of coordination of activities among departments. The organisational structure is centralised in Lusaka without any regional representation in provinces. Decision making was a mixture of both decentralisation as well as centralisation depending on the nature of the decision. The communication policy and strategy has been approved but not fully complied with. Systems Systems are central to the effective implementation of a strategic plan. The operational, human resource and financial management system were put in place but were not properly linked for effective coordination of operations. Standardisation and consolidation of systems is an area that requires improvement. There were no integrated business information systems and project management systems for effective management of various projects. Control systems are largely manual making it difficult to carry out real time monitoring and evaluation of projects. Styles The participative style of leadership has been the most predominant. The immediate history did not have a style of leadership that promoted participation and cooperation among staff as one family. Decision making processes were centralised but this is part of the change processes taking place. The nature of REA that has a significant number of professional staff means that a participative style of leadership promotes freedom, a sense of belonging and productivity among highly qualified staff. Coordination among departments requires further improvement in order to undertake various roles that require multidisciplinary teams. Team members were now more cooperative than competitive. Staff The human capital in the organisation has been affected rather negatively from inception of REA. Gaps between staff establishment and filled up positions were identified and made the structure less effective. For instance, vacant positions of Engineer, Accountant, Financial Analyst and GIS Specialist among others were not filled up. Only 59 per cent (42/7) of the staff establishment was filled up with a staff shortage of 4 per cent. This tended to negatively affect the capacity of the institution to carry out its mandate effectively. There were no interdepartmental relationships for effective coordination of work flows. Rural Electrification Authority Strategic Plan 2428

17 Skills The officers currently on the staff establishment were highly skilled and committed but the low staff numbers put too much strain on the available staff. There were however skills and capacity gaps in technical designs, technical feasibility studies for minihydro, interconnection of standalone grids to the main grid; single wire earth return designs, financial and economic modelling, procurement (PPP) and mechanical engineering departments. Electrification of rural areas has largely been through solar and grid extension models. REA is largely a professional and knowledge organisation despite the staff shortages. Competencies in people management skills including performance management skills need to be developed among the Technical staff (Engineers). The JICA supported capacity building project had positive effects on project planning for the technical staff but did not cover capacity building in soft or people management skills. Shared Values or Core Values The Authority established a code of ethics for all staff to follow. The previous strategic plan had established ethos to guide the operations of the Board, management and staff in carrying out their respective mandates. The vision, mission and values are displayed in offices and on the computer screen saver for all staff to be reminded. In addition, REA is walking the talk in compliance with its core values in the procurement of goods and services, recruitment of staff and interpersonal relationships among others. Such practices are indicators of adherence to the value system. The values are publicised for all staff and stakeholders to comply through various publications of the Authority. The value system was negatively affected in the recent past due to the weak interpersonal relationships among staff leading to the creation of two parallel structures within REA. However, this has changed with the change of management and the employment of new officers from different backgrounds and orientations without any association with the recent history of the Institution. EXTERNAL ENVIRONMENTAL ANALYSIS POLITICAL TRENDS (a) The political environment in Zambia is stable with change of government through democratic elections over the years; (b) The national energy policy was recently revised; (c) There is an optimum governance benchmark that needs strengthening and sustenance; (d) Cooperating partners have positive perception of Zambia and have continued to give support to various sectors of the economy; (e) The political competition in the governance of the country may expose some risks that could disrupt the planning and implementation processes; and (f) Cooperating partners willing to continue providing support to the rural electrification programmes. ECONOMIC POLICY FRAMEWORK (a) Stable economic policy environment over the years despite the change of government; (b) Economic growth has been around 6 per cent of the gross domestic product over the last five years; (c) The rate of inflation has been stable over the past five years; (d) Unemployment levels in the country are still very high; (e) The monetary policy has been stable over the last five years; (f) Changes in the foreign exchange market with the enactment of Statutory Instrument No. 55; (g) The fiscal policy of government has been within the budgetary provisions, though there is room for improvement in light of the reported budget deficit of 8.5 per cent of GDP; (h) Government has launched unprecedented infrastructure development in roads and construction of social infrastructure such as health and education facilities; 2 Rural Electrification Authority Strategic Plan 2428

18 (i) Liberalisation of the electricity sector has provided opportunities for service providers in the electricity sector following the commercialisation of ZESCO Limited; (j) High cost of investment in rural electricity infrastructure in a country with competing needs for various national requirements; (k) Demand for electricity is high in both rural and urban areas; (l) Cooperating partners and other stakeholders are demanding for more collaboration, transparency and accountability in the use of ; and (m) Increased government investment in the ZESCO power generation capacity. SOCIAL/CULTURAL TRENDS (a) The demographic distribution of the population indicates that 65 per cent of the population is below the age of 25 years (in the reproductive age group); (b) The HIV and AIDS is still common but the infection rate has reduced significantly; (c) Early marriages especially in rural areas suggests that this young productive population will lead to an increase in the population in rural areas; (d) The poverty levels particularly in rural areas have remained particularly high and putting pressure on their capacity to afford various services such as electricity; (e) Prevalence of isolated households in many parts of rural Zambia as a cultural trend making it difficult to provide services at community level. (f) The culture of employees getting involved in activities away from work such as attending funerals are common; (g) Low rates of access to electricity in rural areas; (h) Abundant energy in the country to develop indigenous and renewable electricity generation; and (i) Attitude of people towards public assets, without a sense of ownership. TECHNOLOGICAL TRENDS (a) Increased use of satellite technology in research and scoping of areas from remote sites; (b) Developments in core technologies of renewable energies; (c) Technologically trained people on the market are in high demand; (d) The reduced cost of ICTs; and (e) Reduced cost of solar systems. ECOLOGICAL / ENVIRONMENTAL TRENDS (a) Increasing pressure in using clean energy at the global stage with increasing availability of donors supporting the promotion of clean energy; (b) The environment policy and legal framework were recently reviewed and updated to reflect on the increased demand for more humane environmental management practices; (c) The cost of Environmental Impact Assessment tends to be high for projects; (d) Various environmental nongovernmental organisations have been established to advocate for more compliance in the environmental sector; and (e) Displaced communities are now demanding higher levels of compensation from the investors. LEGAL AND REGULATORY ISSUES A number of statutes have been established that affect rural electricity service providers such as the following: (a) Conflicting pieces of legislation for players in the energy sector; (b) The Rural Electrification Act of 23; (c) Environment Management Act; (d) Electricity Act; and (e) Energy Regulation Act. Rural Electrification Authority Strategic Plan

19 SWOT ANALYSIS Strengths Skilled workforce; Public goodwill and support; Well documented systems and procedures; Dedicated and committed workforce; Management operate in a transparent manner in the procurement of goods, services and works and make decisions using an objective criteria; A participative style of leadership; The Rural Electrification Act depoliticizes the work of REA; Establishment of the REF Opportunities Political environment in Zambia is stable with the change of government through democratic elections; The policy framework for the energy sector is in place; Developments in core technologies of renewable energies; Goodwill of cooperating partners who have continued to financially support the sector; Goodwill of the public towards REA; Government political will to continue supporting the Rural Electrification; Cost of ICTs declining; Stable economic policy with continued GDP growth; Government launch of unprecedented infrastructure development in roads and construction of social infrastructure such as health facilities and education facilities in rural areas; The demographic distribution of the population indicates that over 65 per cent of the population is below the age of 25 years; Abundant energy in the country; Low electricity access rates in rural areas but with evident high demand for electricity services; Increased investment in ZESCO s power rehabilitation and power new generation capacity; Weaknesses Weak project management skills with delayed completion of projects; Long planning and procurement processes; Visibility of REA in some project areas is not always projected; Human capital shortages due to inadequate funding; Failure to retain skilled staff; Lack of integrated business information system; Centralised structure without any regional representation; Manual monitoring, evaluation and control systems; Inadequate office space Threats Government mopping of committed funds at year end for projects which were still running; Declining financing support to rural electrification programme as per the Sixth National Development Plan; Various environmental NGOs have been established to advocate for more compliance in the environmental sector thereby affecting project implementation phases; The ZEMA processes may negatively affect rural projects; Prevalence of HIV and AIDS, despite reduced infection rates; Prevalence of isolated households in many parts of Zambia making it difficult to provide services at community level. The high cost of rural electricity infrastructure projects; 4 Rural Electrification Authority Strategic Plan 2428

20 KEY SUCCESS FACTORS Key Success Factors (KSFs) are key trends or events or processes that any player in a particular market segment needs to do very well for effective longterm sustainable performance and development. KSFs are never confined to a company but to an industry. The KSFs for the Rural Electrification sector are as follows: (a) (b) (c) (d) (e) Effective Project Management; Ability to attract sustainable inflow of Effective organisation with skilled workforce; Harness stakeholders into RE programmes; and Efficient and effective procurement of works. STRATEGIC DIRECTION 2428 Vision Statement Mission Statement Core Values The premier provider of electricity infrastructure for rural areas To provide electricity infrastructure to rural areas using appropriate technologies in order to contribute to the improvement of the quality of life During the next five years of this Strategic Plan, the Board, management and staff of REA commit themselves to the following values and ethos that will govern their behaviour in discharging their mandate. (a) Transparency In the procurement of goods, services and works, executive decision making, transparency will be central to all the processes guiding Board, management and staff. As such all decisions made will be guided by verifiable objective criteria. All members of staff will be availed the code of ethics as a reference point to guide them in their behaviour. (b) Accountability In the utilisation of, the Board and management will be guided by the principles of responsibility and good governance and deal with various stakeholders in an equitable and transparent manner in order to meet stakeholder expectations. The Board will submit the Annual Report and audited financial statements to Parliament as a statutory body, six months after yearend. (c) Integrity In discharging its functions, management and staff will find themselves in situations where they may have to make decisions that bind the Authority. Management and staff will always practice the highest ethical standards and honour and treat all stakeholders fairly with openness and appropriate etiquette. (d) Innovativeness In implementing the mission, the management and staff will always look for the innovative ways of meeting the needs of stakeholders. The REA Team commits itself to the culture of continuous improvement. The management and staff are committed to achieving the highest levels of performance through promoting a culture of innovation and everlearning organisation. (e) Diversity and Inclusiveness The projects implemented will always take account of diversity and inclusiveness for all stakeholders thus Rural Electrification Authority Strategic Plan

21 employees and external stakeholders. REA shall remain a nondiscriminatory and an equal employment agency of government in all its operations. (f) Team Work The mandate of REA requires employees to discharge their functions in multidisciplinary teams. In order to promote team spirit, management and staff will promote the culture of working in teams in discharging various roles in implementing annual work plans. (g) Excellence Excellence is the hallmark of the work of a professional organisation. The passion for quality will be the driving force for the Board and management as work outputs will guarantee improvement in the quality of life of people in rural areas. AREAS OF STRATEGIC FOCUS 2428 During the five years of this plan, the Authority shall dedicate its towards the five areas of priority as follows: Area of Strategic Focus : Enhancing Resource Mobilisation for Rural Electrification Key Actions (i) Increase and maintain number of financiers; and (ii) Develop donor coordination platform. Area of Strategic Focus 2: Increasing Access to Electricity in Rural Areas Key Actions (i) Develop Kasanjiku Mini Hydro Power Station in the Ntambu Rural Growth Centre; (ii) Undertake feasibility studies on Mini hydro development projects; (iii) Expand the National Electricity Grid; (iv) Carry out feasibility studies of other renewable energy technologies; (v) Promote solar energy solutions in rural areas; (vi) Implement solar energy projects; (vii) Promote the utilisation of alternative renewable energy technologies in rural areas; (viii) Carry out feasibility studies in biomass, geothermal and wind technologies; and (ix) Institute measures for increased access to electricity. Area of Strategic Focus 3: Promotion of Private Sector Participation in Rural Electrification Key Actions (i) Develop programmes for local and international resource mobilisation; (ii) Identify technical and financial partners for private sector development of Small Power Projects in generation and distribution; (iii) Develop a framework on how to implement and manage capital subsidies for generation and distribution projects; (iv) Develop a comprehensive framework for Small Power Projects (SPP) that includes technology specific tariff structures and tariff review methodologies in conjunction with the Energy Regulation Board; (v) Establish or identify institutions for the generation, distribution and supply of electricity to rural areas; (vi) Undertake appropriate road shows to attract investors and participants in Small Power Projects; and (vii) Strengthen the institutional framework for the promotion of Small Power Projects (in conjunction with ERB and ZESCO). 6 Rural Electrification Authority Strategic Plan 2428

22 Area of Strategic Focus 4: Promotion and Communication of REA Programmes to Various Stakeholders Key Actions (i) Review and update the communication strategy; (ii) Develop and implement appropriate information programmes; (iii) Production and dissemination of reports on rural electrification; and (iv) Promote print and electronic media institutional visibility. Area of Strategic Focus 5: Strengthening Organisation Effectiveness Key Actions (i) Develop institutional and human resource capacity building programmes; (ii) Review and enhance the ICT systems; (iii) Initiate and recommend the revision of the Rural Electrification Act; (iv) To develop a five year rolling plan based on the REMP; (v) Procure new office premises for REA head office; (vi) To enhance Monitoring, Evaluation and Control; and (vii) Review the Strategic Plan. The detailed logframe showing these areas of strategic focus, strategic objectives, strategies, planned outputs, performance indicators and means of verification are in the annex to this plan. IMPLEMENTATION PLAN The implementation of this plan shall be driven by the Chief Executive Officer with the guidance of the Board of Directors. The elements of the implementation plan shall comprise the detailed log frame, the budget, the monitoring and evaluation and control mechanism. The Board of Directors In this plan, the Board of Directors have the overall responsibility of ensuring that this Strategic Plan is implemented and the expected outcomes are realised. The Board through its quarterly meetings will receive reports from the Chief Executive Officer and top management on the status of strategy implementation against the annual work plans and budget among other matters. The Board shall ensure that there is a consistent alignment between this Strategic Plan and the organisation structure including other 7S elements for effective implementation. The Board will constantly review the organisation structure to enhance institutional effectiveness and capacity. The Board Committees The Board may review and strengthen the subcommittees of the Board to effectively monitor the operations of the Authority. These subcommittees are composed of members of the Board as well members from outside the Board; i.e. private citizens with outstanding backgrounds in various appropriate fields of specialisation. The chairpersons of these subcommittees are elected from within respective subcommittees. These subcommittees will meet at least once per quarter and interrogate reports over the operations of the Authority. Executive Management The daytoday implementation of this Strategic Plan shall be the full time responsibility of the Chief Executive Officer and the management team. The executive management team shall prepare annual work plans and budget in line with the Strategic Plan. The detailed work plans and budget will be presented to the Board Rural Electrification Authority Strategic Plan