81308958 - Support framework conditions and implementation of an Air Conditioning replacement programme

The number of Air Conditioners (ACs) in the Southern African Development Community (SADC) region will rise from 5.4 million to 17.7 million by 2030. SADC members aim to reduce greenhouse gas emissions and improve energy efficiency in the Refrigeration and Air Conditioning (RAC) sector. High costs and the inaccessibility of ACs using natural refrigerants with low global warming potential hinder sustainable transformation. Single split-type ACs have a high greenhouse gas (GHG) mitigation potential, but low electricity prices and high capital costs to cover the higher upfront costs of efficient ACs drive households to buy inefficient equipment. South Africa has introduced Minimum Energy Performance Standards (MEPS) for ACs, but other SADC countries lack regulatory frameworks. The project Cooling Program for Southern Africa (CooPSA) aims to establish MEPS, energy labels, an AC replacement program using natural refrigerants, and a sustainable financing instrument considering carbon finance under Article 6 (Art. 6) of the Paris Agreement in Botswana, Eswatini, Namibia, and South Africa. The project will create comprehensive documentation for implementing the energy-efficient cooling program under Art. 6 (Output I), including baseline setting, monitoring methodologies, and Share of Proceeds for recording GHG emission reductions and financial flows. It will support deploying the "Paris Rulebook" and consider innovative dynamic baseline setting approaches for GHG benchmarks and financial additionality. The project supports the drafting of national frameworks for ITMO transfers ensuring fair emission reduction distribution between acquiring and transferring parties by that the project will prepare countries for Art. 6 transactions with foreign partners, ensuring financial sustainability. Partner countries need regulations and national RAC-related Art. 6 frameworks. The readiness to use Art. 6-based carbon finance depends highly on the program's financial sustainability. Continuous technical advice will be provided to the BMWK on issues related to the Montreal Protocol and Paris Agreement, focusing on practical implementation of RAC related Art. 6 activities. The project will significantly reduce GHG emissions in the cooling sector (through R290 Split ACs), contributing to ambitious Nationally Determined Contributions targets of Botswana, Eswatini, Namibia and South Africa. It will pilot market-based approaches under Art. 6, demonstrating their potential as sustainable financing instruments for GHG mitigation, serving as practical examples for replication by other countries and sectors. Under Output II, the Cooling Program addresses policy barriers by developing policy instruments supporting Green AC market uptake. MEPS for split ACs will be improved or developed for the four partner countries and combined with an energy labeling scheme. MEPS will encourage manufacturers to improve product efficiency. Market surveillance will ensure enforcement and support of Green AC uptake. Monitoring, validation, and enforcement processes will be established. Enforcement action plans will ensure market compliance, and MEPS roadmaps will mandate updates and approvals. By the end of the project, MEPS and labels will be adopted and enforced in two partner countries. Output III: Technological and Logistical Aspects aim to increase demand and supply of Green ACs in partner countries and operationalize the replacement program, including end-of-life management for old ACs. The project will establish contact with Green AC manufacturers in various countries and AC import dealers in partner countries, aiming to establish export channels with at least two manufacturers. Up to 20,000 Green ACs will be installed. Training materials, tools, and equipment will be provided, and training will be implemented. Environmentally sound end-of-life management for old ACs will be developed. A replacement program concept will be implemented, including a monitoring, reporting, and verification scheme. Under Output IV, the project will provide a financing structure aligning with host countries' needs, considering two scenarios: (a) a pilot implementation phase concept, and (b) a large-scale rollout phase financing structure. The financing structure will consider carbon/climate finance, concessional finance from development institutions, subordinated debt, and private sector funding. These conditions may stimulate sustainable cooling device sales. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, on behalf of the German Federal Ministry for Economic Affairs and Climate Action (BMWK), will coordinate the overall program. The contractor will implement specific activities of Outputs I and IV and support Outputs II and III. Expertise for a period of 22 months is required.