CIF Allocates Over $385 Million for Peru, Liberia, and Targeted Private Sector Projects Worldwide
Press Release | Nov 01 2013
Climate Investment Funds Trust Fund Committee and Sub-Committee meetings took place in Washington, D.C. from Oct. 28 to Nov. 1.

November 1, 2013 Washington, D.C. — The Climate Investment Funds (CIF) concluded their week-long semi-annual Trust Funds Committees meetings today, endorsing over $385 million to support forest investments in Peru ($50m), energy access expansion in Liberia ($50m), and targeted private sector initiatives in clean technology, renewable energy financing, forest  investments, and climate adaptation ($285.7m).

Reaching out to the private sector

To extend its reach to the private sector, the CIF governing bodies endorsed for the first time specific allocations for private sector initiatives through all four funding windows of the CIF.

Under the Clean Technology Fund (CTF), $150 million was approved for two Dedicated Private Sector Programs (DPSP): the Utility Scale Renewable Energy Program ($115m) to catalyze a global funding effort to scale up renewable energy, and the Renewable Mini-grids and Distributed Power Generation Program ($35m) to leverage private investment for rural and under-served communities.

Under the competitive private sector set-asides of the Pilot Program for Climate Resilience (PPCR), Forest Investment Program (FIP), and Scaling Up Renewable Energy for Low Income Countries (SREP), 15 project concepts, totaling over $135 million, were endorsed for further preparation by the multilateral development banks and full CIF funding approval in 2014. These include five forest-related initiatives in FIP pilot countries Brazil, Burkina Faso, Ghana, and Mexico; four renewable energy projects in SREP pilot countries Honduras, Kenya, Mali, and Nepal; and six projects for climate resilience in PPCR pilot countries Haiti, Jamaica, Mozambique, Saint Lucia, and Tajikistan.

"These new private sector mechanisms represent a significant step by the CIF to support innovative private sector financing to address climate change challenges. They will be closely monitored in the months ahead to ensure rapid implementation of funds and that lessons emerging from these efforts are captured and widely disseminated," said Patricia Bliss-Guest, CIF Program Manager.

Peru and Liberia investment plans advance

Closing out the investment planning phase of the FIP was endorsement of the final pilot country plan from Peru for $50 million. 

“The process of formulating our FIP investment plan has allowed us to have a national debate, including the government, civil society, and the private sector, to identify a strategy on how to position forests as an important asset in our development and to implement enabling conditions to ensure economic growth, social inclusion, and sustainable environmental development,” stated Gabriel Quijandria Acosta, Peru's Vice Minister of Strategic Development of Natural Resources in the Ministry of the Environment.

Peru’s FIP investment plan is particularly unique for its extensive consultative process involving government and regional officials, experts from the Inter-American Development Bank and World Bank, civil society, and indigenous people and local community representatives in more than 20 meetings held in priority regions and in the capital. Stakeholder engagement is further exemplified in Peru’s FIP Steering Committee, which comprises the Ministries of Environment, Economy, Agriculture, and Culture; regional Amazonian governments; and national, regional, and local leaders of two Amazonian indigenous peoples groups: the Asociación Interétnica de Desarrollo de la Selva Peruana (AIDESEP) and Confederación de Nacionalidades Amazónicas del Perú (CONAP).

In a show of solidarity for Peru's investment plan, Daisy Sapata of AIDESEP joined Vice Minister Quijandria Acosta during his presentation to the FIP Sub-Committee to highlight the role of indigenous peoples in the Peruvian government's proposal, as well as their support.

Liberia’s $50 million investment plan was also endorsed under the SREP. In a country with less than 2 percent energy access, Liberia will use SREP resources to support efforts to increase energy access via off-grid electricity solutions; develop renewable energy such as small hydro, solar, biomass, and hybrids; and complement expansion of centralized generation and transmission facilities to contribute to the national goal of achieving 35 percent electrification rate by 2030.   

“With the SREP, we will have a wide range of social economic impacts across the country. Expanding energy access will create jobs, empower women, and allow people to generate income and add value to their activities. This is going to be huge because it is looking at the grassroots level in rural communities that are far off the grid,” explained Augustus Goanue, Executive Director of the Rural & Renewable Energy Agency of the Ministry of Lands, Mines & Energy.

 

For more information, please contact:

Steven Shalita, CIF Communications

sshalita@worldbank.org

Colombia to Improve Capital City’s Public Transport System
Press Release | Oct 03 2013

Colombia will improve its public transportation system in Bogota with a $40 million CTF loan approved by the Inter-American Development Bank, making its hallmark bus system better as well as cleaner. The project will finance 282 new medium capacity hybrid or electric buses. It will reduce operating costs of this fleet by 35% and reduce GHG emissions by 7,000 tons/year, a 46% drop.

EBRD Supports Renewable Energy Project In Southern Ukraine
Press Release | Oct 01 2013

The European Bank for Reconstruction and Development is providing a financing package of € 5.4 million to Teplodar PiVi LLC in the Odessa region for the development, construction and operation of a 4.2 MW solar power plant. The financing arranged by the EBRD will include an 8-year EBRD loan of €3.9 million and a 15-year loan of €1.5 million from the CTF.

ADB to Provide $500 Million for Renewable Energy Transmission System in Northwest India
Press Release | Sep 30 2013
CTF $200 million will support construction of a transmission system from wind and solar power projects to existing grids

Orginally published on September 27, 2013 by the Asian Development Bank

MANILA, PHILIPPINES – The Asian Development Bank (ADB) will provide $500 million to build a power transmission system needed to deliver clean electricity from wind and solar power projects in Rajasthan in Northwest India to the state and national grids.

“Boosting renewable energy is important for Rajasthan and India to meet fast-growing energy needs in a way that is kind to the environment while also improving the country’s energy security by reducing reliance on imported fossil fuels,” said Len George, Energy Specialist in ADB’s South Asia Department. “The proposed transmission investments will also support evacuation of energy produced in large renewable energy parks that bring in economies of scale compared to smaller stand-alone renewable energy projects.”

The Bhadla park in Western Rajasthan is the first solar park that is under development by the Rajasthan Renewable Energy Corporation, the state’s renewable energy agency, to house photovoltaic and solar thermal projects and is part of Rajasthan’s aim to reach about 8,000 megawatts of solar and wind generation capacity by 2018, largely from the private sector.

Solar energy development is also a key part of the national government’s goal under the Jawaharlal Nehru Solar Mission (JNNSM) to find renewable energy alternatives to fossil fuels to meet India’s fast-growing energy needs. The JNSMM, set up in 2010, aims to deploy 20,000 megawatts of solar power capacity across India by 2022. A large chunk of that is expected to be located in Rajasthan, which has one of the highest levels of solar irradiation in India and is home to over 80% of the solar power set up under Phase 1 of the JNNSM.

Work has already started on 75 megawatts of solar photovoltaic power at the Bhadla park after competitive bidding in early 2013 under the Rajasthan solar policy and a further 200 megawatts will be added annually starting 2014.

The new power transmission system will involve about 1,850 kilometers of transmission lines, mostly in western Rajasthan, three new 400 kilovolt substations and nine new 220 kilovolt grid substations. The funds will also be used to boost the transmission capacity of seven existing substations. Apart from serving the Bhadla park, the infrastructure supports solar and wind power developments in Western Rajasthan.

The funds comprise a $498 million multi-tranche financing facility including funds from the concessional Clean Technology Fund, and a further $2 million in technical assistance grant that finances infrastructure planning for the Bhadla park, transmission system studies and a community development plan to set up solar power electricity and clean water equipment for small communities. The government of Rajasthan and state transmission utilities will provide counterpart financing of about $300 million.

The second loan tranche of around $220 million is expected to be released later in 2014 and the final loan of around $128 million expected to be made in 2015. The investment program is expected to be completed by early 2018.

 

For more information, please contact:

Steven Shalita, CIF Communications
IDB Supports Colombia’s Plan for Clean Energy Technology and Efficiency
In the News | Sep 25 2013

The Inter-American Development Bank will be supporting Colombia’s plan to boost clean energy technology and efficiency to reduce GHG emissions with a $10 million loan from the CTF. Under the project, investments in energy efficiency for around 90 hotels and 34 health clinics will be provided financing. The boost in energy efficiency is expected to reduce the establishments’ annual energy costs by as much as 20 percent, significantly lowering their GHG emissions.

EBRD Supports Major Wind Park in Ukraine
Press Release | Sep 16 2013

The Novoazovskiy Wind Park in the Donetsk region – one of the largest privately-owned wind energy projects in Ukraine – will receive an EBRD loan of up to €33.3 million and a parallel loan from the CTF of up to €15.5 million ($20.7 million). It represents a sustainable model of energy generation and will benefit from Ukraine’s green tariff law.

Push for super efficient fans faces uncertain future in India
In the News | Aug 06 2013
Employees wait for customers in KRS Electricals, an electrical appliance shop in New Delhi which stocks fans.

By Sujit Chakraborty originally published August 2, 2013 on Thomson Reuters Foundation. Photo: Sujit Chakraborty /TRF

 

NEW DELHI (THOMSON REUTERS FOUNDATION) – Sales of electric fans are rising 12 percent a year in India, as its sweating, ever-larger population looks for ways to escape temperatures being driven ever higher by climate change.

Making those fans more efficient could save on electric bills, cut the huge number of new power plants India needs and curb climate-changing greenhouse gas emissions.

But an effort to persuade Indian manufacturers to produce and sell super-efficient ceiling fans, backed by a $50 million loan from the Clean Technology Fund and other support, may struggle, experts say.

Manufacturers and fan distributors wonder if buyers can be persuaded to purchase super-efficient fans that, while offering lower monthly bills, might cost significantly more to buy than a low-efficiency fan does today, even with an expected discount funded through the programme.

Government processing delays have held up programme funding becoming available, and some potential manufacturers do not yet have the technology in hand to begin quickly producing the fans, experts say.

And smaller manufacturers complain that they have been excluded from the programme by government-set eligibility-to-bid criteria that favour big manufacturers, who programme backers believe could more quickly scale up sales.

Some of the problems are leading to delays which suggest the programme’s goal to introduce about five million super-efficient ceiling fans into India’s market over four years may be ambitious.

“The pilot project is currently undergoing review within the Government of India, as per established norms for projects of this size. This review requires inter-ministerial consultations, including with the Planning Commission,” said Mudit Narain, a World Bank energy economist based in India, in an email to the Thomson Reuters Foundation.

ENERGY EFFICIENCY PUSH

The effort to build super-efficient ceiling fans is part of an Indian Bureau of Energy Efficiency (BEE) programme to reduce the energy consumption of fans, seen across much of India as a household necessity.

The BEE functions under the Indian Ministry of Power. India’s major source of power is fossil fuels, so any energy-efficiency improvements could play a major role in arresting climate change.

In India, electric lighting is the largest source of household energy consumption, but there has already been a substantial reduction of energy use from lighting with the introduction of affordable compact fluorescent lights.

The BEE has also set mandatory energy efficiency labelling requirements for other electrical appliances. The Standards and Labelling programme rates the energy efficiency of air conditioners, refrigerators, television sets and other appliances on a scale of 1 to 5 stars, with five being the most energy efficient.

So far, fans have remained outside that labelling system, something the BEE hopes to change. It also wants to introduce super-efficient fans, with support for a manufacturer’s incentive scheme channelled by the Climate Investment Funds through the World Bank’s International Bank for Reconstruction and Development (IBRD).

The IBRD is making available $50 million for the programme through 2017, and other international agencies have committed financing totalling up to $130 million.

Two civil society organisations with proven track records of working on energy issues in India -Prayas Energy Group of Pune and Shakti Sustainable Energy Foundation of New Delhi – have been hired to carry out studies and offer advice on the fan energy efficiency drive. They published aguidebook to the project in April.

But Prayas Energy Group official Aditya Chunekar told the Thomson Reuters Foundation that the energy efficiency project is still awaiting clearance at the Indian Planning Commission, a process that might take months, he said.

According to Narain, of the World Bank, the bidding process for the project is “already underway, with expressions of interest received earlier this year.”

But Ashok Kumar, India’s top BEE official, said there could be delays in the first batch of fans hitting the market by the summer of 2014, as originally planned, depending on how long the government approval process takes.

LOOKING TO BIG MANUFACTURERS

Eight manufacturers have been listed as ‘eligible to bid’ for support to begin producing super-efficient fans, and Compton Graves, India, one of the largest, confirmed it will be among the bidders.

Companies were selected as eligible to bid based on having a record of selling at least 300,000 fans annually over the last three years, Prayas said. The aim of the criterion was to weed out “fly-by-night” operators who might produce inferior products that would be detrimental to the programme’s success, he said.

Narain said the aim was also to ensure “rapid transformation at a large scale in a short time” and that “requires participating manufacturers to have substantial market penetration, extensive sales channels and existing engagement with dealers and retailers, apart from eligible technologies.”

The problem, he said, is that “it may take years for smaller manufacturers to develop these market linkages and sales channels in a market as competitive as that for fans in India.”

Such rules are “in line with international procurement good practices for a project of this size,” Narain said.

But small manufacturers say the rules could prevent innovative and efficient Indian-made technology from gaining a foothold.

The guidebook produced by Prayas and his partners notes that “innovators and small manufacturers… can be the drivers of change in an industry.” But “it was felt that this criterion (to be already involved in large-scale manufacturing in order to bid) would not be too onerous for them because, in any case, innovators would need to team up with established manufacturers to manufacture and market their products.”

Smaller firms, who say they have the efficient motor technology in hand to build super efficient fans, however, insist they are reluctant to hand over technology they have developed to the big firms who do not yet have it.

They also fear big firms will have too little financial incentive to promote sales of the more costly super-efficient fans over their own existing models.

Nagaraja Mannan, managing director of Green Power Systems and Services, a small Bangalore-based firm interested in bidding to produce the fans, said the technology needed for super-efficient fans would require large fan manufacturers to rework existing assembly lines with little guarantee that higher priced fans would sell.

Large firms could also end up making smaller profit margins on efficient fans than on normal ones, again reducing their incentive to push sales, he said.

ANY BUYERS?

Finding buyers for super efficient fans may be the biggest hurdle, experts say. Currently available ceiling fans sell for about Rs 1,800 ($36), while highly efficient fans could probably not be priced at less than Rs 3,200 ($64), one manufacturer said.

Narain, of the World Bank, said manufacturers chosen to produce super efficient fans as part of the project will be eligible to receive a per-fan incentive of up to Rs. 500 ($8.39). If passed along to customers, that could help lower the cost of the new fans somewhat, though not bring them close to the existing cost of less-efficient fans.

The fans may face cultural resistance as well. Indian buyers tend to choose products based on design and colour rather than efficiency, Consumer Voice, a consumer non-governmental organisation, said in a January 2013 publication.

Arnav Kala, a spokesman at KSR Electricals, a large electrical equipment distributor in India, confirmed that its wealthier buyers show willingness to pay more for good-looking fans with lights attached, but are less interested in saving electricity.

“Our buyers want to pay higher prices for rich colours and decorations but energy efficiency without such decorative items does not make sense to them,” he said.

As a result, “I doubt how many SEE fans we can sell,” he said.

Kumar said the fan project “includes a component on awareness and advertising, to sensitise the consumers on the benefits of energy efficient appliances, especially those eligible under this program.”

The media campaign will build on the successes of the current Bachat ke Sitare television ad campaign by BEE, which showcases India’s progress in energy efficiency, Kumar said.

 

For more information, please contact:
Steven Shalita, CIF Communications
sshalita@worldbank.org

EBRD helps Ecoprod generate power from biogas
In the News | Jul 29 2013

EBRD finances Ecoprod with a 15-year loan of €1.1 million from the Clean Technology Fund to develop, construct and operate a 1.5MW biogas plant, which will produce 5.8 million cubic metres of biogas a year to be used for the generation of 9,900 MW of electricity.

Mexico Aims to Cut Emissions, Boost Afforable Housing Via Eco House Program
In the News | Jul 23 2013

The Mexican government expects the Eco House program will reduce housing sector GHG emissions by at least 20% come the end of the decade. Up to $150 million in loans has been raised in support of the program, $50 million of which is coming from the $5.2 billion Clean Technology Fund.

South Africa Adds Renewables into Coal-Heavy Energy Mix
In the News | Jul 17 2013
Giant wind turbines dot the landscape at the Darling Wind Farm, a national demonstration project near Cape Town.

By Jocelyn Newmarch originally published July 17, 2013 on Thomson Reuters Foundation. Photo: Mike Hutchings/Reuters

 

JOHANNESBURG (Thomson Reuters Foundation) - South Africans have traditionally relied upon their plentiful coal reserves to supply over 90 percent of their electricity needs. Only in the past decade has national energy policy taken note of abundant wind and solar resources. Economic growth in the past two decades has outstripped electricity capacity, and now the country needs to catch up.

As a result, Eskom, South Africa’s national electricity provider, is investing for the first time in utility-scale renewable energy, even as it also goes ahead with new coal-fired plants. The Renewables Support Programme, worth $1.3 billion, will see Eskom develop the first commercial-scale wind farm in the country and one of the world’s largest concentrating solar power (CSP) plants. Each of these two projects will add 100MW to the grid.

Financing for the programme has been obtained from the Clean Technology Fund (part of the Climate Investment Funds), the International Bank for Reconstruction and Development, and the African Development Bank.

“The programme is strongly linked to the government’s development agenda,” explained Mafalda Duarte, the African Development Bank's chief climate change specialist. The projects were approved as the “best approach” to meeting South Africa’s goal of shifting the balance of its energy mix to 42 percent clean energy while reducing its carbon emissions.

“Renewable energy will contribute to improved generation capacity and make electricity generally more reliable and resistant to fossil-price fluctuations,” she said. Because components can be sourced locally, the projects would also contribute to domestic industrial development and employment – both national priorities in a country with an official unemployment rate of 25 percent and widespread poverty.  

SOLAR POTENTIAL

According to the Clean Technology Fund (CTF) investment plan for South Africa, prepared in 2009, concentrating solar power plants have vast potential to be scaled up around the region. “In South Africa alone, Eskom estimates 40 gigawatts of commercially viable CSP in the Northern and Western Cape provinces. Replication in Namibia and Botswana could double or treble this potential,” the authors say.

In addition, solar plants could help to stabilise emissions, in line with President Jacob Zuma’s pledge to reduce growth in greenhouse gas emissions by 34 percent by 2020 and 42 percent by 2025. South Africa, despite its status as a developing country, is the 11th largest carbon emitter in the world.

“Eskom aspires to reduce its relative emissions of carbon dioxide by diversifying its energy mix in the years leading up to 2025. After this, it plans to reduce absolute emissions of carbon dioxide,” Eskom’s media desk said in response to questions.

Construction has already started on the 100 megawatt Sere wind farm, in the Western Cape, which will be fully commissioned by December 2014. It is expected to save approximately 230 000 tons of carbon emissions per year.

Eskom did not say when work would begin on the 100 MW concentrating thermal power plant, in the Northern Cape. However, the plant is due to be commissioned in 2017, and would save 450 000 tons of carbon emissions per year.

In addition, the utility will buy over 4,700 MW of renewable energy from independent power producers.

CHEAPER POWER?

Thanks to the soft loan financing structure, Eskom has been able to lower the capital cost of renewables, said Saliem Fakir, head of WWF South Africa’s Living Planet Unit. The money allowed Eskom to develop renewable energy at a cheaper rate than commercial producers, something that should ultimately result in benefits to consumers.

 Now, “the question is whether Eskom is willing to take on a larger bulk of the renewables and bring the benefits to South African consumers. If they can find ways to lower their cost of generating electricity from renewables, it can result in a lower impact on electricity tariffs,” Fakir said.

In the long term, renewable power could help South Africa save on transmission losses, lowering the cost of transmitting electricity, and create more flexibility in the national grid. “Those costs are often not taken account of because they are future costs to the economy,” he said.

 

For more information, please contact:

Steven Shalita, CIF Communications

sshalita@worldbank.org

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