The IFC/GEF Efficient Lighting Initiative (ELI) in South Africa is a program implemented by the International Finance Corporation (IFC) and funded by Eskom (the South African utility) and the Global Environment Facility (GEF), to accelerate the penetration of energy-efficient lighting technologies. ELI is also taking place in six other emerging markets (the Philippines, Peru, Argentina, the Czech Republic, Hungary, and Latvia).

The aim of ELI is to reduce greenhouse gas emissions through the reduction in energy consumption and demand originating from predominantly coal-fired generating capacity in South Africa. ELI promotes modern and high-quality efficient lighting technologies such as the compact fluorescent lamp (CFL). ELI South Africa ran from January 2000 until March 2003.

ELI was implemented locally by Bonesa, a joint venture between Eskom, through Eskom Enterprises (TSI), Africon Engineering and Umongi-Karebo as the major shareholders. Bonesa was created for the purpose of transforming the South African lighting market, by increasing the acceptance of high efficiency products and technologies. TSI takes up a 45% shareholding in the company and the remaining two partners take up 26% and 29% respectively. Bonesa serves as the Local Implementing Agency (LIA) for ELI-RSA.
For the residential market, the potential exists in South Africa to replace some 31,5 million old-fashioned incandescent light bulbs with CFLs. This would cut the peak load on the national grid by some 820 megawatts, which is almost equivalent to the peak load of a city the size of Cape Town (approximately 2,500,000 inhabitants). There exists a great potential for transforming other lighting markets, such as the commercial, industrial and institutional sector activities, health care facilities and street lighting infrastructure as well, which are by far not aware of the use of efficient lighting technologies. ELI will not only reduce greenhouse gas emissions, but could also save the country the need for large investments in generation, transmission and distribution facilities, and link household energy initiatives with other development objectives.

The Memorandum of Understanding (MOU) signed June 2000, between Soluziona Ingeniería, based in Madrid, Spain (IFC’s regional implementing agents for ELI-South Africa) and Bonesa, plus subsequent clarifications made by both parties, indicate that IFC funds, which represent 24% of the initial budget, would be allocated primarily for the low income market segment initiatives to the extent possible within the constraints of the Bonesa accounting system. On the other hand, Eskom funds, which represent the remaining 76% of the initial budget, would be directed to activities targeted at higher residential, commercial, industrial and institutional segments, and health care facilities and street lighting infrastructure.

Although the primary ELI-RSA program had a two year duration, given the fact that there were still projects unfinished and others that had not started yet, and there was a significant amount of funds left, a no-cost extension from July to December 2002 was approved by the funders, Eskom and IFC-GEF. In this regard, a new Strategy Document was developed in January 2002 to define the activities that would be implemented during the 2002 year and to set out the workplan for the different programs and to reallocate the remaining budget.

The Bonesa team made a great effort to fulfill the compromise of completing all the activities before the end 2002, the deadline established by both IFC and Eskom. Therefore, all the activities that were envisaged in the new Strategy Document have reached completion by the end of December2002.

KEY GOALS

The goal of the IFC/GEF ELI South Africa (ELI-SA) is to reduce greenhouse gas emissions in the electricity sector by building demand in the south African market for energy-efficient lighting. ELI-SA has focused on providing access to energy efficient lighting products and services for South Africa’s low-income population. ELI-SA has also worked to increase penetration of energy efficient lighting in the commercial, industrial and institutional sectors. ELI-SA has closely worked with the main electricity utility, Eskom, which has funded 76% of ELI’s budget; the municipal electricity distribution companies, such as Ethekwini Municipality in Durban, City Power in Johannesburg, Cape Town Unicity, Tshwane Metro, Nelson Mandela Metro in East London; and with community organizations; NGOs; the South African lighting industry; the South African government; and municipalities.
The IFC appraisal for ELI and Eskom’s own research showed the existence of significant barriers, which are explained for each program to the penetration of energy efficient lighting in South Africa. ELI has intended successfully to remove those barriers and develop a self-sustainable market.

ELI’s main objective has been to reduce greenhouse gas emissions (decreasing the peak demand for electricity, between 18:00 and 22:00, and overall consumption) by means of transforming the South African lighting market through the implementation of pilot projects in all market segments (residential, commercial, industrial, public buildings, street lighting and health care facilities.) and in the main sectors of the economy, the promotion of efficient lighting equipment and the education in schools, technical colleges, technikons and universities.
The reduction in greenhouse gas emissions and the transformation of the lighting market will bring other benefits, such as:

• A significant decrease in the overall water consumption for power plant refrigeration.
  
• Lowering household energy costs, thereby making more disposable income available, particularly to South Africa’s previously disadvantaged population.
  
• Creating employment and economic benefits arising from a robust, energy efficient lighting market.

SPECIFIC OBJECTIVES

ELI’s specific objectives were:

• To reach the middle & high-income residential market segments through the promotion and the provision of incentive rebates in shopping centers.
  
• To reach the lower residential market segments through the recommendation to implement the efficient alternative to the EBSST (Electricity Basic Support Services Tariff ).
  
• To engage the existing distribution infrastructure to supply CFLs and luminaires to the rural areas. To work with the municipalities to introduce CFLs in the Rural Development Program’s (RDP) newly electrified areas. The Rural Development Program is a project developed in South Africa by the Department of Housing to provide all South African families with a combined monthly income of less than R 3,500 with a proper dwelling, which will enjoy the basic services such as electricity and water.
  
• To introduce efficient lighting technologies in the commercial and industrial segments.
  
• To introduce efficient lighting technologies in public buildings. Activities in this market segment can show society that both the national government and the local authorities are deeply concerned about energy efficiency.
  
• To introduce efficient lighting technologies in medical facilities. This has ensured both the reduction in electricity consumption and the improvement of quality in lighting in the public hospitals.
  
• To introduce efficient lighting technologies in the street lighting infrastructure, especially in the less developed municipalities. This has ensured both the reduction in electricity consumption and the improvement of quality in lighting on the streets.