Once the broad vision and strategy of the energy market system has been outlined, the next step is to start to design a set of potential interventions for overcoming each market barrier, as well as their categorisation and prioritisation. Although these interventions will be developed more fully in the next roadmap steps, it is useful to start to identify potential interventions at this stage.
It will probably not be possible to overcome all the barriers in a dysfunctional energy market, at least not in the short term, but it is useful to start to identify them. This helps the facilitators know what to expect during the next roadmap steps, which will be developed in more detail by the market actors. The potential interventions should be designed according to the following criteria:
Impact: An intervention in a market system needs to result in tangible impacts. It is important to develop milestones and targets against objectively verifiable indicators (OVIs) for the planned impact of each intervention.
Value Addition: It is important that any intervention adds significant value in terms of sustainability and scale of impact over and above a traditional energy market support programmes. It is important to be clear what this value addition is and ensure it can be captured in the OVIs and targets.
Cost-Effectiveness: It is important that any intervention achieves value for money: indicating that its resources are being used for the greatest effect. Once again, this should be reflected in the OVIs and targets.
Once all the potential support interventions have been identified, it is important to categorise them. The facilitation team can use the template in Annex 6 to carry out preliminary categorisation of the potential support interventions. It is useful to use Table 2, which summarises the main types of interventions that have been identified through experience of supporting energy systems. The table is divided into the 2 categories of technical assistance (TA) and financial assistance (FA), as well as an intervention code to allow them to be quickly and easily identified.
Table 2: Summary of Categorisation of Potential Support Interventions
Technical assistance (TA) interventions
|Business Development Support||Increased capacity of market chain companies to develop their business models.||TAB|
|Technical Support||Increased capacity of market chain companies on technical issues.||TAT|
|Policy Support||Increased capacity of government departments to overcome a particular enabling environment factor.||TAP|
|Advocacy Support||Increased capacity of relevant stakeholders to allow them to participate in the development of particular policies and regulations as well as ensuring they are enforced.||TAAd|
|Awareness-raising Support||Increased capacity of end-users to understand the benefits of energy products and appliances and increase their uptake.||TAAw|
Financial Assistance (FA) Interventions
|Direct Grant Financing Support||Provision of grant funding to directly or indirectly subsidise the costs of establishing an energy delivery system (e.g. a mini-grid or establish a stove production facility), including tax concessions.||FAG|
|Loan Financing Support||Provision of loan financing, directly or through intermediaries (e.g. local banks or micro-finance institutions).||FAL|
|Equity Financing Support||Provision of financing for equity investment in companies, again directly or through intermediaries (e.g. dedicated energy investment funds such as ACRE).||FAE|
|Complementary Financing Support||Provision of complementary financing (e.g. policy risk mitigation, currency risk mitigation, loan guarantees etc.).||FAC|
Note: Once all the interventions have been defined and categorised it is also possible to start to prioritise them. However, as this prioritisation needs to be made based on the potential impact of each intervention on the market actors and end users, it is more effectively achieved during the next steps of the roadmap process.
It is also important to reiterate that the market mapping, assessment of market actors, identification of potential market barriers and potential support interventions, carried out in this step is to produce a baseline to inform the market facilitation process. All of these need to be independently identified during the facilitated activities with the energy market actors in the next roadmap steps.