Business Plan Preparation Prior to ESCO Setup and Operationalization in Senegal

Senegal, through its Agence pour l’Économie de la Maitrise de l’Énergie (AEME), has requested the support of the AfDB for the mobilization of technical assistance to set up and operationalize a Super Energy Service Company (ESCO) in Senegal. The technical assistance was provided against the backdrop of Senegal’s firm commitment to using its resources to establish its energy autonomy and consolidate the foundations of its economic and social development. As part of its mandate, Econoler is carrying out an analysis of the market and the local context in light of international best practices to design a Super ESCO model adapted to Senegal; this will be accompanied through the implementation of a business plan to be validated during a national workshop.

As part of this mandate, Econoler is carrying out the following tasks:

 

Task 1: Review of previous studies on the energy efficiency market in Senegal: 

• Gather relevant studies, works, documents, and data on the energy efficiency market;

• Evaluate, for the different market segments, the energy efficiency project development potential under the Super ESCO;

• Analyze the legislative and regulatory frameworks that may influence the energy efficiency market in Senegal;

• Identify the various players in the energy efficiency value chain, in particular ESCOs, and analyze their know-how, in this case their technical capabilities for energy audits, project design, procurement, measurement and verification (M&V), and supervision of energy efficiency projects;

• Identify and analyze financing mechanisms for energy efficiency projects as well as market incentives for suppliers of energy efficiency and renewable energy solutions. Identify all barriers to the implementation of Senegal’s Super ESCO and propose an action plan for its implementation and operationalization.

 

Task 2: Analysis of possible options for setting up a Super ESCO and identification of the most appropriate model for Senegal:

• Organize a study tour to examine two Super ESCO models from around the world. These visits will illustrate the benchmark on Super ESCO business models as well as actual achievements, difficulties, and lessons learned with a view to guiding the choice of the model best suited to Senegal;

• Propose the various options for setting up the Super ESCO in consultation with AEME that will mobilize its partners, drawing on international best practices and the lessons learned from the study tour;

• Clarify, for each option analyzed, the structure of the partnership, operational activities, roles of the main players, operation of the Super ESCO structures, capacity-building activities identified, etc.

• Carry out a comparative SWOT (strengths, weaknesses, opportunities, and threats) analysis of the options analyzed for the Super ESCO;

• Propose legislative or other solutions that will enable the operationalization of the Super ESCO option approved by AEME with its partners in the project. This will include identifying the adaptations required for the successful use of energy performance contracts (EPCs) and proposing accompanying tax and budgeting measures.

 

Task 3: Drawing up a business plan for the implementation and operationalization of the selected Super ESCO model: 

• Draw up a business plan in close collaboration with AEME based on the data and analyses carried out in Tasks 1 and 2.

 

Task 4: Organization of a national workshop to validate the final report:

• Prepare the terms of reference for a validation workshop and have it validated by AEME;

• Present the final report and lead the workshop;

• Prepare the summary report of the validation workshop.