Bangladesh Rural Electrification and Renewable Energy Development II (RERED II) Project (IDA Credit 5158-BD and 5514-BD, GPOBA TF096552 and TF098472, USAID TF015034, BCCRF TF015077) Implementation Review Mission October 21-30, 2014 Aide Memoire I. Introduction and Acknowledgements 1. An Implementation Review Mission for the Rural Electrification and Renewable Energy Development II (RERED II) was carried out from October 21-30, 2014 to review progress of implementation of the project. 1 The mission met with the officials of the Power Division and Power Cell of the Ministry of Power, Energy and Mineral Resources (MPEMR), and Infrastructure Development Company Ltd. (IDCOL). A list of officials met during the mission appears in Annex 1. The team wishes to express its deep appreciation to the Power Division, Power Cell, IDCOL and others for the productive discussions, access to information and excellent cooperation during the review mission. The findings of the aide memoire were discussed and agreed through a virtual wrap-up meeting. The government requested this Aide Memoire to be classified as Public document under World Bank’s Access to Information Policy. II. Key Project Data Key Dates Project Performance Ratings IDA Cr. 5158 IDA Cr. 5514 Board Approval September 20, 2012 June 19, 2014 Achievement of PDO Satisfactory Signing October 23, 2012 June 30, 2014 Implementation Progress Moderately Satisfactory Effectiven ess February 20, 2013 September 28, 2014 Financial Management Satisfactory Closing December 31, 2018 December 31, 2018 Procurement Satisfactory 1 The mission members were: Messrs. Zubair K M Sadeque (Senior Energy Finance Specialist and Task Team Leader), Ashok Sarkar (Senior Energy Specialist), Koffi Ekouevi (Senior Economist), Christopher Purcell (Renewable Energy Consultant), Dr. M. Khaliquzzamn (Technical Consultant), Ishtiak Siddique (Procurement Specialist), Mohammed Atikuzzaman (Financial Management Specialist), Iqbal Ahmed (Environment Specialist), Sabah Moyeen (Social Safeguards Specialist), and Md. Tafazzal Hossain (Program Assistant). 1
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Bangladesh Rural Electrification and Renewable Energy Development II (RERED II) Project(IDA Credit 5158-BD and 5514-BD, GPOBA TF096552 and TF098472,
1. An Implementation Review Mission for the Rural Electrification and Renewable Energy Development II (RERED II) was carried out from October 21-30, 2014 to review progress of implementation of the project.1 The mission met with the officials of the Power Division and Power Cell of the Ministry of Power, Energy and Mineral Resources (MPEMR), and Infrastructure Development Company Ltd. (IDCOL). A list of officials met during the mission appears in Annex 1. The team wishes to express its deep appreciation to the Power Division, Power Cell, IDCOL and others for the productive discussions, access to information and excellent cooperation during the review mission. The findings of the aide memoire were discussed and agreed through a virtual wrap-up meeting. The government requested this Aide Memoire to be classified as Public document under World Bank’s Access to Information Policy.
II. Key Project Data
Key Dates Project Performance RatingsIDA Cr. 5158 IDA Cr. 5514Board Approval September 20, 2012 June 19, 2014 Achievement of PDO SatisfactorySigning October 23, 2012 June 30, 2014 Implementation Progress Moderately
SatisfactoryEffectiveness February 20, 2013 September 28, 2014 Financial Management SatisfactoryClosing December 31, 2018 December 31, 2018 Procurement SatisfactoryAllocation 102.8 million SDR 50.585 million SDR Environment and Social SatisfactoryDisbursed 102.78 million US$ 0
III. Achievement of Development Objectives 1 The mission members were: Messrs. Zubair K M Sadeque (Senior Energy Finance Specialist and Task Team Leader), Ashok Sarkar (Senior Energy Specialist), Koffi Ekouevi (Senior Economist), Christopher Purcell (Renewable Energy Consultant), Dr. M. Khaliquzzamn (Technical Consultant), Ishtiak Siddique (Procurement Specialist), Mohammed Atikuzzaman (Financial Management Specialist), Iqbal Ahmed (Environment Specialist), Sabah Moyeen (Social Safeguards Specialist), and Md. Tafazzal Hossain (Program Assistant).
2 Grant financing amounting to US$3.565 million is made available from the US Agency for International Development (USAID) as the first tranche to support the access to electricity component of the project. An amount of US$10 million is made available from the Bangladesh Climate Change Resilience Fund (BCCRF) for grant support to the solar irrigation pumps under the access to electricity component. Two GPOBA Grants (TF096552 and TF098472) have been providing matching grant to the Solar Home Systems (SHS) and mini-grid schemes supported under the project.
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2. The original project development objectives (PDO) were to increase access to clean energy in rural areas through renewable energy and promote more efficient energy consumption. A project restructuring was approved by IDA board in June 2014 (along with an additional financing to support further scale-up of the SHS program) that involved dropping the Efficient Lighting component of the project and revising the PDO as ‘to increase access to clean energy in rural areas through renewable energy’. The project has provided access to electricity to about 590,000 households by September 2014. The PDO is likely to be achieved and the overall rating for achievement of the PDO is Satisfactory. Annex 2 provides the results framework of the project and progress achieved to date.
IV. Current Implementation Status
3. Overall implementation is on track. The SHS program continues satisfactorily. The SHS installation continues at over 50,000 systems per month supported by IDA and other development partners. A total of 6 mini-grids for a combined capacity of 0.86 MW are under construction. A total about 191 solar irrigation pumps have been approved by IDCOL for financing and 69 have been installed funded from USAID, GPOBA and other financing sources. Out of the remaining 122 pumps, 70 are expected to be financed from BCCRF. Another 230 pumps are in the pipeline for consideration for BCCRF financing. The overall implementation progress of the project is Moderately Satisfactory given the slow initial uptake in the mini-grids, solar irrigation pumps, and the household energy component.
4. Disbursement Progress. The project already disbursed US$102.8 million in IDA credit (68% of the original credit). To meet the funding needs of the fast growing SHS program, an additional financing of US$78.4 million was approved with a target to reach an additional 480,000 SHS (beyond the original target of 550,000) by the project closing of December 2018. Disbursement projection for FY15 is US$47.5 million (including additional financing), which is expected to be met. The additional financing also included a project restructuring that included dropping the efficient lighting component and re-allocating to access to electricity (US$12 million) and to sector technical assistance component (US$5 million). An additional US$15 million in grant financing is being processed from the Global Partnership for Output Based Aid (GPOBA) trust funds to meet the capital buy-down grant requirements for the access to electricity component.
5. Against the first tranche of US$3.765 million of USAID trust fund (TF05134) for access to electricity component, US$3.06 million has been disbursed providing grant support to 113,858 SHS. Total commitment from USAID is US$7.565 million and a second tranche of US$1.5 million is in the processing from USAID. Some re-allocation to SHS from other renewable options will be needed from this second tranche to meet the needs of the growing SHS program. An amount of US$0.45 million has been disbursed against GPOBA trust fund for mini-grid (TF096552) supporting 20 irrigation pumps. The remaining amount is expected to be fully utilized by the closing date of June 30, 2015 that would support a total of 36 irrigation pumps and one mini-grid (currently under construction). After the special account was opened, an initial advance of US$0.644 million was processed in June 2014 against the BCCRF trust fund (TF015077). Some 4 irrigation pumps have been so far been supported under the fund with another 70 pumps under construction that would utilize about US$1 million. The allocation of US$10 million from the BCCRF funds is expected to be fully utilized by the closing date of December 2016.
6. GAAP Implementation. The Governance and Accountability Action Plan (GAAP) was revised dropping the actions related to the dropped efficient lighting component. The major activities under the matrix of actions outlined in the GAAP are continuing (Annex 3) to mitigate the risk of inadequate competition that could result in poor quality and service to SHS customers. The SHS market competitiveness survey indicated adequate competition by the POs in the market. An impact evaluation survey conducted earlier did not find any discernible difference in the quality of service delivery across the POs. IDCOL continues to focus on strong inspection and monitoring to ensure quality installations. A
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follow-up survey under a Bank-administered trust fund (CARTA program) to seek beneficiary feedback is on-going (the first survey indicated a customer satisfaction rate of 97%).
Component-wise Implementation Status
7. The restructured project now has three main components: i) access to electricity (total cost US$374 million, IDA US$128 million from original credit and US$78.4 million from additional financing); ii) household energy (total cost US$46 million, IDA US$12 million); and iii) sector technical assistance (total cost US$10 million, IDA US$10 million). The following section summarizes the component-wise implementation issues.
Component 1: Access to Electricity
8. The access to electricity component is providing continued support to the solar home systems (SHS) program and also supporting other renewable energy options (mini-grids, solar irrigation pumps, captive biogas plants for electricity etc) implemented by IDCOL.
9. Increased share of smaller SHS. There has been an increased uptake of smaller SHS ever since the capital buy-down grants were limited to smaller systems only. In order to better understand the market dynamics (whether it is the result of the demand pull from the poorer households who are only able to afford smaller systems, or the sales push by the POs as only the smaller systems are eligible for subsidies), market surveys have been initiated by IDCOL through call centers. A recent pilot on ICT based customer surveys was done under a Bank-executed trust fund that had established call centers to be the most cost-effective channel for collecting feedback from SHS customers.
10. Pico-solar kits: There has been interest recently from some development partners on introducing pico-solar kits in the IDCOL program. Globally, in the many places outside of Bangladesh where SHS programs have been less than successful for reasons of unaffordability, upfront costs barriers, lack of access to finance, poor quality, high supply chain costs, lack of access to installation and maintenance services etc, the solutions being promoted are plug & play pico-solar kits (and solar lanterns). The characteristics of pico-kits are typically: no complex installation requirements, small system components due to ultra-high efficiency LEDs, enabling use of small long life Li-Ion batteries, kits quality tested and certified (usually) to Lighting Global standards with 2 year warrantee. Sizes range from 5-10Wp. The introduction of pico-solar to Bangladesh raises several questions particularly on the cost-effectiveness of the pico-solar when compared to smaller (10Wp) SHS in the IDCOL program. IDCOL will need to explore answers to these carefully before introducing such pico-solar kits. Details are in Annex 4.
11. Solar lanterns: Lanterns are also seen, globally, as part of a solution to the challenges of failed or challenged SHS programs, as they have almost all the characteristics of pico-solar kits, except they are integrated units providing for one lamp only and usually cellphone charging. Since they cost much less than $50 in almost all cases, they cannot be financed by IDCOL and are intended for cash sales only. IFC and GIZ have jointly launched the ‘Lighting Bangladesh’ program on October 29, 2014 that is aimed at providing support to private sector to reach the poorest of the poor who cannot afford even IDCOL financed-SHS. IDCOL is coordinating closely the SHS program with the IFC-GIZ lighting Bangladesh program.
12. Service level of older SHS. Given the fact that there are a large number of systems that are already paid off with older CFL light packages, it would be important to understand to what extent they are still being used or maintained by the customers. It will also be important to understand the effectiveness of the battery recycling process that IDCOL introducing by surveying older customers if they had recently replaced their batteries through the IDCOL POs or through others. The customer surveys through call centers have been initiated recently.
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13. Mini-grids. A total of 6 mini-grids are at various stages of construction. Given the site-specific nature of the mini-grids, uptake has been slow. The mission reiterated the need for IDCOL to identify potential sites (in discussion with Power Division) and carry out feasibility studies for such sites. The potential sites can then be offered through bidding for private sponsors interested in setting up mini-grids. IDCOL agreed to initiate selection of the feasibility study consultant by December 15, 2014.
14. The mission visited the site of one 141 kWp solar Mini Grid at Paratoli Island, Raipura Upazila, Narshingdi District by Souro Bangla (SBL). The project was approved in January 2014 with the targeted commercial operation by June 2014. There have been delays and the project is now due for commercial operation by end-Nov. The civil construction, electrical works, and distribution network construction were all found to be of high quality. Possible concerns include some spatial planning issues that should have been anticipated (battery room layout, array shading). The mission reiterated the need to keep a close supervision by IDCOL on the battery and control room installations, which will ultimately determine the actual quality of services.
15. Solar irrigation pumps. After some initial delays, the pace of installation of irrigation pumps are finally picking up. Out of 191 pumps that were approved by IDCOL for financing, 69 have been installed already with support from USAID, GPOBA and other funding sources. Out of the remaining 122 pumps, 70 are expected to be financed from BCCRF. Another 236 are in the pipeline for consideration for BCCRF financing. These are in the 7-11kWp sizes that would require 30 acres of 3-crops irrigation needs. Such large areas require agreements with 25-30 farmers for each pump location, which is a time-consuming and difficult task. IDCOL is currently assessing the feasibility of smaller (3 kWp) sized pumps that would require smaller land sizes with agreements with 2-3 farmers for each pump. Once such smaller sized pumps are found to be economically cost-effective compared to diesel pumps, these will be considered for financing contributing to faster pace of installation. With the continued panel price decline and increased diesel costs, there is a possibility that individually owned pumps will be most economical in the near future that will allow for replication of the ownership model of SHS in the irrigation pumps.
16. IDCOL has been using funds from GPOBA, USAID and kFW for the irrigation pumps that have been installed so far. Going forward, mostly BCCRF funds will be utilized for the irrigation pumps to fully utilize the allocation of US$10 million by the fund closing date of December 31, 2016.
17. Captive biogas generation: Three captive biogas generation proposals have been reviewed by IDA and were cleared for financing. Biogas formed from cattle or poultry farms is used within those farms to offset grid electricity consumption or diesel consumption – with benefits to the greater economy. There are several thousand such captive generation opportunities, which can be explored.
18. Technical Assistance (TA) Progress and Actions. a. Transition to Commercial Financing Study : The task got delayed due to the non-availability of
the international consultant. IDCOL is exploring the option of finishing the study with a new consultant that will identify options for introducing commercial financing to the SHS program while ensuring poorer segments of the market are not left out of the program due to increased costs. The mission reiterated the need to engage an appropriate consultant by January 31, 2015 and complete the study by June 30, 2015.
b. PV Testing Laboratory : Agreement has been signed with the Bangladesh University of Engineering and Technology (BUET) for operating and maintaining the testing laboratory while the lab equipment will be supported under the project funds. The technical specifications for the equipment are being finalized in consultation with the technical consultant of IDCOL, IFC consultants, and BUET. The equipment will include test equipment for small/pico PV systems that would be supporting IFC-GIZ Lighting Bangladesh program.
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c. 220 V DC Mini-grid Testing Facility : The revised proposal from the United international University (UIU) has been finalized and agreements reached. UIU agreed to initiate the civil works for such lab immediately with a target to establish the facility by June 30, 2015.
d. SHS Technical Standards Upgrade : The standards now include specifications for LED lamps. The LED lamp specifications are rudimentary and could benefit from the work done to develop solar LED lighting standards under the Lighting Global Program, which are now incorporated into the international IEC Standard, IEC TS 62257-9-5 Ed. 2. IDCOL will request the Technical Standards Committee to review the IEC standard for low voltage LED lights, and incorporate appropriate elements into the IDCOL SHS Specification by December 31, 2014. SHS using better ultra-high specification LED of 90lumen/watt could significantly reduce system size and cost.
e. Audits: Several audits have been initiated: i) audit of procurement practices of POs to check if the procurement comply with economy and efficiency principals is on-going; ii) selection of auditor is at final stage for the environment and social audit to monitor the environmental and social compliance in field level implementation as well as compliance with the battery recycling process; and iii) technical audit is on-going.
f. Baseline Surveys for Impact Evaluation. Contract negotiation with the first ranked survey firm is on-going. An IDCOL team participated in a workshop in Lisbon on impact evaluation surveys sponsored under a Bank-executed trust fund. The team has benefited from a better understanding of the scope and methodology to be used in the impact evaluation for the different activities (mini-grids, solar irrigation pumps, improved cookstoves, and biogas plants for cooking). It was agreed that some modifications in the TOR will be incorporated based on the workshop learning and contract negotiation will be done based on the revised TOR.
g. Technician training program. The rapid growth of the program resulted in a shortages of trained technicians. IDCOL has recently contracted several technical institutes to offer certification courses for technicians. The task team introduced IDCOL team with the Project Director of the Bank-funded education project (Skills and Training Enhancement Project) who showed keen interest to work with IDCOL to introduce certification courses in the curricula of the Technical Education Training Institutes. IDCOL’s own curriculum has been shared with the education project. IDCOL agreed to follow-up with the education project.
Component 2: Household Energy Component.
19. Improved Cookstoves: Overall, the implementation progress of the dissemination of improved cookstoves is satisfactory. A call for expression of interest for selection of partner organizations (POs) for dissemination of ICS has resulted in responses from 198 POs. IDCOL shortlisted 102 and selected 33 POs for the first round launched in December 2013 and 16 others for a second round expected to be launched in December 2014. Consultations, adjustment of operational modalities, ICS selection, testing and certification delayed the physical dissemination of the ICS. However, the initial round is now under effective implementation with about 2,800 ICS already purchased by households. The ICS implementation rate is currently low for timely achievement of the project target. The mission acknowledges initial difficulties in setting up production facilities and supply chains. A higher implementation rate is expected in the next six months. The mission noted the operationalization of SREDA and recommended that IDCOL takes up the support of SREDA the for mobilizing support from local government agencies to promote ICS in the communities.
20. Biogas Plants: Implementation of the biogas plants is also progressing satisfactorily. The biogas
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program is benefiting from the organizational modalities initiated earlier under SNV financing. Overall about 1,453 biogas plants have being constructed under the project. A cluster construction approach is also adopted for the biogas component to help POs concentrate their activities, to increase efficiency in collecting revenues, to reduce operating expenses, and to provide smooth after sales services. It was agreed that POs will make the best use of dry season starting from November and increase monthly plant construction.
21. Detailed implementation progress and an action plan for the next six months appear as Annex 5.
Component 3: Sector Technical Assistance.
22. The component is continuing satisfactorily. An amount of US$2.7 million already disbursed against the original allocation of US$5 million. During the additional financing and project restructuring in June 2014, an amount of US$5 million was re-allocated from the cancelled allocation for the efficient lighting component.
23. The mission was pleased to note the operationalization of SREDA with the appointment of a full-time Chairman, members, and other key staff. The mission met with the new SREDA officials and agreed to explore options to develop a national-level Energy Efficiency (EE) Implementation/Financing Strategy linked to the EE Action Plan. The potential of earmarking some dedicated TA funds (implemented by Power Cell) to SREDA for EE activities was also discussed. SREDA will work with Power Cell and Power Division for such earmarking. SREDA could benefit from knowledge sharing with some global experts in the field of EE, which can be funded from the TA component. Details for the potential EE engagement are in Annex 6.
24. It was further agreed that a comprehensive approach will be designed including development of a large scale household level LED lamp deployment program through a Demand Side Management (DSM) modality; formulation of an Incandescent Lamp Phase out Policy; and design of a comprehensive consumer awareness program on promoting LEDs and other energy efficient appliances. A feasibility study and options analysis needs to be undertaken that will identify the most effective means of addressing the market barriers for LED. Details are in Annex 6.
25. Re-fund of CDM preparation costs for the efficient lighting component. IDCOL signed an Emission Reductions Purchase Agreement (ERPA) with the Bank as the trustee for a carbon finance fund for the emission reductions from the efficient lighting component (now dropped). The ERPA stipulated that the preparation costs for Clean Development Mechanism (CDM) project would be borne by the Bank as the trustee that would be recovered from the carbon revenues generated from the CFLs distributed under the component. In the event of a failure to generate the carbon revenues, IDCOL was liable to refund the preparation costs. Accordingly, an amount of Euro 315,000 is claimed by the Bank as the carbon finance trustee. The mission discussed the issue in detail and requested IDCOL to explore options for such refund. IDCOL agreed to revert back by December 15, 2014.
V. Fiduciary and Safeguards
Environment and Social Safeguards
26. Recycling of SHS Batteries. IDCOL is continuing to monitor the collection of warranty expired batteries with the working committee meeting regularly. The database for tracking of warranty expired batteries has been developed. The on-going customer surveys will also provide more information on the status of the warranty expired batteries. IDCOL is continuing to monitor the progress in establishing recycling facilities in all the remaining 14 battery suppliers with a June 30, 2016 target date. Only 3 currently have their own facilities.
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27. Mini-grids, irrigation pumps and biogas plant. It was informed that the site-specific environment assessment/screening (EA) for 6 mini-grids, 110 solar irrigation pumps and 5 captive biogas plant were carried by the proponent and duly reviewed and cleared by the IDCOL. The Bank also reviewed the EAs of 2 mini-grids, 8 irrigation pump and 2 biogas plants on sample basis, and found these to be in compliance with Bank requirements.
28. Institutional Strengthening on Safeguards. With a view to strengthen the institutional capacity of IDCOL on environment safeguards, a new Environment Specialist has been appointed who has commenced work from May 1, 2014.
29. Development of National Guidelines for CFL disposal. A draft guideline has been developed by the consultant. The Bank reviewed the draft and suggested for further consultations with the stakeholders including the Department of Environment (DoE) to ensure their buy-in for implementation of the action plan. Despite dropping the efficient lighting component from the project, this work of developing the national guideline would continue to ensure safe disposal of CFLs throughout the country.
30. Updating of ESMF. The ESMF has been updated for the additional financing, which was disclosed in-country on April 20, 2014 and in the World Bank Infoshop on April 21, 2014. The ESMF is now applicable for the whole renewable energy program of IDCOL incorporating the requirements of all the different development partners supporting the program.
Fiduciary
31. The fiduciary performance is rated Satisfactory. The financial monitoring reports (FMRs) are being submitted on time. The audited accounts for the project and of IDCOL are expected to be submitted by the due date of December 31, 2014. The procurement performance of Power Cell (sector technical assistance) and IDCOL (for technical assistance under access to electricity and household energy components) is satisfactory. IDCOL and Power Cell have agreed to update their procurement plans using the electronic procurement plan monitoring system (SEPA) by December 15, 2014; which will enable real-time monitoring by the implementing agencies as well as the Bank of implementation of procurement activities under the project.
VI. Agreed actions to address issues.
Annex 7 has the list of agreed actions.
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Annex 1List of Officials Met
Ministry of Power, Energy and Mineral resources (MPEMR)1. Mr. Taposh Kumar Roy, Additional Secretary, Power Division, and Head, SREDA Cell2. Mr. Mohammad Hossain, Director General, Power Cell3. Mr. Md. Monwar Hasan Khan, Senior Assistant Chief, Power Division
Infrastructure Development Company Ltd. (IDCOL)1. Mr. Mahmood Malik Executive Director and CEO2. Mr. S.M. Formanul Islam, Deputy Chief Executive Officer3. Mr. S. M. Monirul Islam, Chief Financial Officer and Head of Operations4. Mr. Md. Enamul Karim Pavel, Director (Loans) and Head of Renewable Energy5. Mr. Md. Wahidur Rahman, Unit Head (Technical), Renewable Energy6. Mr. Nazmul Haque Faisal, Unit Head, Household Energy7. Mr. A F M Shahed, Monitoring Officer, ICS8. Mr. Md. Abdullah Hell Baki, Monitoring Officer, ICS9. Mr. Molla Anisur Rahman, Senior Field Coordinator, ICS10. Dr. A M Hasan Rashid Khan, Consultant, ICS
Partner Organizations (POs) and Others1. Dr. M Shahidul Islam, Consultant, Grameen Shakti2. Mr. Md. Belayet Hossain Miah, Deputy Director, VARD3. Mr. Chandan Bose Mukto, Program Coordiantor, AID4. Mr. Md. Abdul Mannan Sarkar, AGM, AVA5. Mr. ABM Masudunnabi, Coordinator, SMS6. Mr. Robiul Islam, Executive Director, DESHA7. Mr. Mr. Md. Mominur Rahman, Assistant Professor, Department of Chemical Engineering,
BUET8. Mr. Craig VanDevelde, Chief of Party, USAID CCEB Program9. Mr. A.K.M. Anowar Hossain Mollah, Senior ICS Advisor, USAID CCEB Program10. Mr. Md. Masud Hassan, Coordinator, VERC11. Ms. Laila Ishrat Jahan, Assistant Coordinator, VERC12. Ms. Lila Gomez, Field Worker, VERC
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Annex 2Results Framework for RERED II Project
(Figures in parenthesis are achievements)Project Development Objectives
The proposed project development objective is to increase access to clean energy in rural areas through renewable energy
Project Development Objective Indicators
Indicator Name Core Unit of Measure
Baseline(Dec 2012)
Cumulative Target Values
2013 20142015
(As of Sept 2014)
2016 2017 2018
Number of households, farmers, and businesses having access to clean energy services
Number 0 100,200 529,000 935,000 1,322,000 1,663,000 2,069,000
Achievements 183,066 499,529 590,183
Generation Capacity of Renewable Energy (other than hydropower) constructed- Solar
MW 0 6 20 33 43 49 56
Achievements 6.42 16.73 19.87
Direct project beneficiaries Million 0 0.5 2.4 3.8 4.8 5.3 5.7
People provided with access to electricity by household connections
Million 2.4 3.7 4.5 4.7 4.7
Achievements 2.73 3.12
People who gained access to more energy-efficient cooking and/or heating facilities
Million 0 0 0 0.1 0.3 0.6 1.0
Achievements 0 0.005
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Intermediate Results Indicators
Cumulative Target Values
Indicator Name Core Unit of Measure
Baseline(Dec 2012) 2013 2014
2015(As of Sept
2014)2016 2017 2018
Number of solar home systems installed Number 0 100,000 524,000 824,000 1,001,000 1,030,000 1,030,000
Achievements 182,550 497,855 586,525
Number of connections made through mini-grid systems and captive plants
Number 0 150 250 1,000 2,500 4,500 7,500
Achievements 0 0 3
Number of solar irrigation pumps installed Number 0 30 40 190 440 790 1,250
Achievements 2 9 25
Number of improved cook stoves purchased by households
Number 0 0 0 100,000 300,000 600,000 1,000,000
Achievements 0 0 2,800
Number of biogas plants installed Number 0 100 4,400 10,220 18,340 29,700 33,000
Achievements 301 1,453 1,453
Collection efficiency of the SHS POs Percentage 90% 90% 90% 90% 90% 90%
Achievements 96% 96%
Enabling policy for renewable energy development
Text SREDAnot operational
SREDAnot operational
SREDA established
SREDA operational with
core staff appointed
SREDA operational
with core staff appointed
SREDA operational with core
staff appointed
SREDA operational with core
staff appointed
AchievementsSREDA
Chairman appointed
SREDA operational with
core staff appointed
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Annex 3
Matrix of ActionsGovernance and Accountability Action Plan
Issues/Risks/Objective
Actions Agency responsible
Timeline Early Warning Indicators to Trigger
Additional Action
Current Status
Service Delivery RiskEnsure adequately competitive market for effective service delivery
Carry out a market assessment to gauge the extent to which customers have options in choosing the service provider
IDCOL Early in project implementation
Delays in initiating the assessment
Assessment completed. It indicates adequate competition in
the market.
Complete impact evaluation study that includes an assessment of PO performance
Study consultant
Early in project implementation
Delays in report submission
Study completed. The study did not indicate any discernible
differences in service delivery quality across the POs.
Based on the assessments, take appropriate interventions for ensuring an adequately competitive market
IDCOL Early in project implementation
Delays in implementing appropriate interventions
IDCOL has strengthened its focus on ensuring quality particularly given the growth of the program
and introduction of new POs. Conduct Technical audit by an independent auditor on installation quality
IDCOL appointed
auditor
Every year during project
implementation
Delays in appointing auditor, non-cooperation by the POs
BUET has been contracted. Inception report expected shortly.
Ensure enhanced reporting and feedback
Undertake regular reporting by the implementing agencies on implementation
IDCOL/ BREB/ Power
Cell
Quarterly Lack of focal point or frequent replacement
The financial monitoring reports are submitted timely by the
agencies.
Ensure RTI Designated Officer in place and proactive information dissemination conducted
IDCOL/BREB/Power
Cell
Within three months of
effectiveness
No designated officers in place; check of websites reveals lack of information
Designated officers have been appointed.
Introduce third party monitoring system
IDCOL Within the first year of project implementation
No initiative by the implementing agency
A third party monitoring under a Bank-executed trust fund
submitted its report indicating
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Issues/Risks/Objective
Actions Agency responsible
Timeline Early Warning Indicators to Trigger
Additional Action
Current Status
97% satisfaction rate amongst consumers. Follow-up survey is
ongoing. Introduce IT based systems for reporting installation data and for collecting customer feedback
IDCOL/POs Within the first year of project implementation
No initiative by the implementing agency, non-cooperation by the POs
A small pilot from a Bank-executed trust fund was
completed. A call center has been contracted for customer surveys.
Survey is on-going.Capacity Risk
Strengthen institutional capacity for effective implementation
Complete review of the organization structure of IDCOL
Institutional Development
Consultant
Early in project implementation
Delays in implementation of the study recommendations
A separate department for renewable energy is now
adequately staffed.
Develop a credible and time-bound action plan for strengthening BREB/PBS program
BREB Within the first year of project implementation
Delays in finalizing the action plan
Action plan developed and under implementation. This is being followed up under a separate
project (T&D). The action item is dropped from this project as
BREB is no longer an implementing agency in this
project. Appointment of Assistant Director (Accounts)
Power Cell Before disbursement of the component
Delays in initiating selection process
Appointment completed.
Reduce risk of corruption in procurement.
Conduct procurement audit by an independent auditor on PO procurement practices
IDCOL appointed
auditor
Every alternate year during
implementation
Delays in appointing auditor, non-cooperation by the POs
Procurement audit on-going.
For the energy-efficient lighting component, develop i) a time bound action plan with close monitoring by REB and the Power
BREB Before initiating CFL procurement
Delays in developing the action plan and terms of reference, delays in appointment
The action item is dropped as the efficient lighting component is
cancelled.
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Issues/Risks/Objective
Actions Agency responsible
Timeline Early Warning Indicators to Trigger
Additional Action
Current Status
Division; (ii) a thorough terms of reference for the bid evaluation committee; (iii) appointment of a competent international technical specialist to support REB during bid invitation, evaluation, and post-award inspections; iv) appointment of a competent international procurement consultant to support REB during bid invitation and evaluation; v) selection of competent bid evaluation committee members with inclusion of the international procurement specialist; and (vi) establishing strict confidentiality arrangements for bid evaluation.
of the international technical specialist, complaints received
Appointment of a procurement consultant and training for procurement focal point
Power Cell Early in project implementation
Delays in initiating selection process
Procurement consultant on board.
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Annex 4Pico-solar PV systems in the context of IDCOL SHS program
The global niche for pico-solar PV
1. SHS provide many potential benefits to off-grid end-users, with services ranging from quality lighting, cell-phone charging, radio, and TV. SHS of different sizes may provide important steps up the energy ladder: from traditional smoky fuels and kerosene, disposable torches, rechargeable batteries on the one hand, en-route to grid comparable electricity by mini-grids and main utility connection services on the top of the ladder.
2. But globally, in many places outside of Bangladesh, SHS delivery programs have often been less than successful, or have not reached desired levels of scale-up for a variety reasons now well documented, including the usual suspect list of:
high imported equipment costs exacerbated by long supply chains and supply chain mark-ups unaffordability and upfront costs barriers for potential consumers lack of access to consumer finance in the project areas poor quality of equipment and high failure rates of key components, including batteries lack of spares and replacement components in rural areas lack of access to installation and maintenance services etc.
3. One of the solutions being widely promoted to begin to address many of these challenges is the plug & play pico-solar PV kit and solar lanterns. These are lower in absolute cost than small SHS.
4. Pico-solar PV kits3 are good quality lighting products that are small enough not to present a very high upfront cost barrier and thus not require much financing, which can be self-installed by the consumer. They are small but scalable - if more lights are required, then the consumer can incrementally purchase more of these units as and when affordable. Cost can range from $70-$200, average $140. The physical characteristics of pico-solar PV kits are typically:
no complex installation requirements – simply plug and play, 2-4 lights and cellphone charging outlet using USB ultra-high efficiency LEDs, low power draw, resulting in smaller system component
requirements enabling use of small, long-life Li-Ion batteries quality tested and certified (usually) to Lighting Global standards with 2 year warrantee. fully imported fully assembled - manufactured typically in China, with some kits assembly
elsewhere (e.g. Kenya) Sizes range from 1-10Wp typically.
5. Pico-solar PV capacity is not normally measured in terms of Wp, but rather in terms of output performance based on the light brightness for a measured number of hours per day (lumen-hr/day). This has been done for various reasons, and avoids awkward simple cost or Wp comparisons with some less efficient SHS.
6. The highly efficient technical characteristics often result in lower cost, higher performing pico-solar PV system systems, than competing commercially available small SHS in the 15-20Wp range which might use lower efficiency CFLs and lead-acid batteries.
Bangladesh context for pico-solar PV
7. Bangladesh SHS program of IDCOL has overcome all known barriers to SHS implementation
3 For a short paper on pico-solar promotion refer to “Pico Solar PV Systems for Remote Homes, A new generation of small PV systems for lighting and communication, IEA PVPS Task 9, Report IEA-PVPS T9-12: 2012”
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making it the fastest growing program the world. The considered introduction of pico-solar PV to IDCOL program raises several questions:
Is there even a market for the smaller 10Wp SHS or pico-solar? The IDCOL program currently markets 20Wp as its smallest offering, with high efficiency LED.
Is there a need for pico-solar kits in order to reach these “customers”? Can pico-solar compete on price/performance basis with an equally performing Bangladesh IDCOL SHS?
How much effort and grant money should be spent getting these to market? IDCOL currently provides small grant of less than $0.6-1/Wp for upto 30Wp systems.
Is pico-solar actually a step up the energy ladder in Bangladesh context? Can this step be skipped?
Why introduce Li-Ion battery recycling challenges when Bangladesh has innovated low cost tubular lead-acid batteries that are recycled, and why import when there is a buoyant local PV manufacturing industry?
Can small SHS and pico-solar financing transaction costs be accommodated in the highly efficient IDCOL financing schemes, or are fixed transaction costs too high to make them cost competitive?
There are many questions as to whether pico-solar PV present a real economic opportunity for Bangladesh, or will simply displace potential local economic production activities in SHS with imported problems.
8. Solar lanterns: Lanterns are also seen, globally, as part of a solution to the challenges of failed or challenged SHS programs, as they have almost all the characteristics of pico-solar kits, except they are integrated units providing for one lamp only and usually cellphone charging. Since they cost much less than $50 in almost all cases, they cannot be financed by IDCOL and are intended for cash sales only. Lighting Bangladesh launched in 29th October with IFC, and will provide support to private sector to reach the poorest of the poor who cannot afford even IDCOL financed-SHS. Technical challenge is primarily, the recycling of the Li-Ion batteries.
Fixed costs of PO in IDCOL program
9. One of the key success factors of the IDCOL program is the huge networks of the PO’s for sales, delivery, fee-collection and maintenance. Analysis of PO costs and margins indicates that a significant part of PO costs is sales and marketing, and a significant part of their cost and risk is fee collection – both of these are more or less independent of system sizes. Therefore there is a fixed cost per system that needs to be covered for POs to consider any systems profitable. 20Wp systems estimate these to be at least BDT 4,000- 5,000 per system.
IDCOL costs
10. IDCOL too has fixed transaction costs which are independent on system size. These include the cost of capturing the PO financing transaction, and ongoing monitoring costs. Therefore, it is probable that even in the most efficient SHS programme globally, there is a minimum system size below which transactions are not attractive for either PO or financier IDCOL.
Grants approach in Pico-solar PV programs
11. The level of grant is typically based on the certified lumenr-hr/day. GIZ- financed programs (SNV in Tanzania and 7 other global locations) and World Bank financed programs (SSMP2 in Tanzania) offer generous grants, sometimes fixed for the program duration, or decreasing as the program matures.
12. When converted to a $/Wp grant, these pico-solar program grants are high, translating to about an equivalent $7/Wp-$23/Wp, averaging $10/Wp (compared to typical global SHS program grants of $2.5/Wp to $5/Wp). In comparison, the IDCOL SHS program offers a grant of $0.6-1/Wp for upto 30Wp systems only. No other IDCOL systems receive any grants, and thus the IDCOL program is run practically on a full cost recovery basis.
Comparison of pico-solar and SHS performance in Bangladesh program
13. In the table at the end of the annex, the cost/performance of pico-solar PV systems is compared with the existing IDCOL product offering. Included for comparison are possible new IDCOL program offerings comprising of smaller SHS (5-15Wp) using smaller recyclable lead-acid batteries and very high efficiency LED of 80lumen/watt and 120lumen/watt, all of which could be locally manufactured and assembled.
14. The table below illustrates the likely trade-offs, but there are several assumption that need to be confirmed, these are:
Capital costs of the pico-solar PV (assumed $75-$140 for 2.5 to 5Wp), but may be higher Battery costs for the small solar SHS Fixed mark-up for pico-solar and small SHS alike assumed to be about BDT4,000 ($50) Grant for pico-solar as per GIZ proposals. Grant for small SHS fixed at $20 Lumen/watt for small LED for small SHS is 80 lumen/watt.
Discussion of costs and performance
15. Absolute costs of 5Wp pico-solar after all costs but before grant are very comparable with 10Wp SHS, although application of a large grant portion may make pico-solar appear cheaper.
Mark-ups are percentage-wise much more for smaller systems, due to the fixed cost aspects. Grants for pico-solar are very high on a $/Wp basis.
Relative costs ($/Wp comparisons): $/Wp cost for any SHS below 20Wp begins to climb dramatically with decreasing size from
$6/Wp, and this trend continues into the pico-solar range up to more than $20/Wp. Even the higher grant levels assumed may not make sales price/Wp lower for pico-solar.
16. The efficient 5Wp pico-solar provides only a little less light (lumen-hr/day) than the 10Wp SHS at assumed 80 lumen/watt. But comparing cost/lumen-hr/day, the 10Wp system seems to be cost effective against the pico-solar, before grant application. By attending to LED efficiencies in the SHS, and if the SHS were simply to improve to 120lumen/watt (similar to the pico-solar LED), then the lumen-hr/day output of the 5Wp and 10Wp SHS rise dramatically, and appear to cost less than the pico-solar in absolute terms, as well as providing far better value for money in terms of cost/lumen-hr/day. In fact, if the pico-solar grant of about BDT 4,000 were applied to the efficient 10Wp SHS, then these would seem to be the best solution by quite some way in absolute and relative cost terms. They could reach the poorest of the poor almost as cost effectively as pico-solar based on the calculations.
17. Given the above, in the Bangladesh context, a 10Wp SHS with efficient components could deliver almost twice the performance of a 5Wp pico-solar, for almost the same price. And therefore it could be argued that these grants would be better applied to the 10Wp SHS. This may in part answer
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the questions: How much effort and grant money should be spent getting the pico-solar systems to market?
Unquantified costs
18. The introduction of Li-ion batteries remains an unquantified environmental and recycling challenge.
19. The economic benefits of locally assembled SHS versus imported pico-solar PV have not been quantified at this stage.
Conclusion
20. Based on the assumptions listed above (that would need to be verified), but appears that the space for pico-solar PV in Bangladesh is very small compared to some other countries in Africa for example. There may be limited benefits on introducing pico-solar kits compared to developing home-grown 10Wp SHS.
Current IDCOL SHS offerings with LEDSmaller SHS (new)Pico-solar kits
Certified results
7,800
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Annex 5Detailed Implementation Progress of Household Energy Component
21. Preparatory Activities. The consultation process of the POs was elaborate as the clustering approach adopted by the RERED-II project is new. This approach is based on a principle of developing small and medium size entrepreneurship to deliver clean cooking solutions to communities with in-depth coverage. Each PO is required to conduct a baseline survey of its assigned cluster before starting the dissemination of the ICS. A total sample of 251,141 respondents participated in the baseline survey from 97 upazilas. Some key results are the following: i) about half of the respondents are involved in agricultural work; ii) more than half of the respondents monthly household income is less than 10,000 Takas ; iii) over 90 percent of respondents currently use traditional cookstoves; iv) about 67 percent of the respondents use mixed fuel in the form of fuel wood, agricultural residues, straw, and cow dung cake; v) only 19 percent of respondents purchase fuelwood for cooking; and vi) most of the respondents are willing to purchase an ICS but do not want to purchase it now. During the course of the project, follow up survey would be conducted to assess trends from this baseline.
22. IDCOL has conducted training activities to familiarize the POs with the operating guidelines of the project. About 17 training sessions have been organized so far with about 455 participants. Preparatory activities involving the POs also included adjustments of operating modalities to account for perceived field realities.
23. The mission had discussions with a selected group of POs and participated on an Operational Committee meeting involving all selected POs of the first round. After an initial preparatory phase that involved many adjustments, POs are now proceeding to sales of the ICS and their physical installation in households. Key implementation challenges reported are: i) the competition faced by POs from other ICS programs such as the Grammen Shakti and the GIZ programs; ii) high transportation costs for POs that do not have cluster based production facilities; iii) difficulties in implementing the cluster approach by some POs.
24. The mission recommended an adaptive approach in coordinating activities. Basically, it was suggested that IDCOL remains open minded to adapt monitoring and administrative requirements to field realities and implementation constraints. In view of the time needed for preparatory activities, the mission recommended a call for the second round of POs to be initiated as soon as possible to engage with them early in the process to minimize implementation delays.
25. Technical Committee, Testing and Standards. IDCOL’s Technical Committee in charge of providing technical oversight of ICS standards, testing, and certification is now fully operational. The Technical Committee provided its insights and recommendations to IDCOL in the selection of a first wave of 7 ICS models that are being disseminated by the POs. This selection was made based on screening of 72 initial models and test results of 11 models. The testing was made at the Village Education Resource Center (VERC) and at the Bangladesh Atomic Energy Commission.
26. The mission visited the Bangladesh University of Engineering and Technology (BUET) to review progress in the on-going work as part of agreement signed with IDCOL. Currently, two models of ICS approved by IDCOL have been installed at the BUET. They have been tested using Water Boiling Test (WBT) protocols. Two incrementally improved designs are almost ready to be tested. These are designs with cast-able creaming lining and with ceramic sleeve lining. With better insulated hot surface, these designs are expected to give incrementally higher efficiency in WBT tests. The mission noted the progress in the R&D program for incremental improvement of current models of ICS and pellet fuels at BUET.
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27. The BUET laboratory is however handicapped by lack of appropriate equipment especially an emission measurement set-up of international standards. The mission recommended that project resources should be eventually allocated to finance BUET laboratory facilities so that a reasonable quality of work on ICS related R&D can be performed. The estimated resource requirement is about $300,000. This should be done upon satisfactorily completion of the current contract with the BUET.
28. The mission also visited the Ceramics Department of BUET. It has an excellent facility to characterize materials using X-ray Fluorescence Spectrometry and Electron microscopy. The mission encouraged the BUET teams to continue collaboration to help IDCOL implement its quality tier improvement plan. The plan stipulates that the percentage of the current generation of “improved” stoves will increase gradually every year: goals would be 0% first year (current year), 5% second year, 20% third year, 50% fourth year, and 100% fifth year. ”The definition of an improved stove will be one that meets the benchmarks of tier 2 stove (fuel use): tier 3 (indoor air pollution): tier 3 (total emissions).
29. The mission was briefed on the take-away lessons from the knowledge exchange visit organized in June 2014 for 3 cookstove experts supporting the IDCOL program at the Energy Institute of the Colorado State University in USA. The mission recommended remaining in contact with the researchers of the Institute to pursue research and development opportunities.
30. Selection of Additional ICS models. POs are currently disseminating a first set of ICS model recommended by the IDCOL Technical Committee. This initial set of ICS will be supplemented by a second set that will be factory produced ICS. The set could include rocket stoves and gasifier cookstoves proven to be of higher quality than the ICS commonly used in Bangladesh. The idea is to provide a menu of solutions and choice to households. It is expected that households will eventually decide on the type of ICS that are suitable to their cooking needs. The market will therefore decide on the level of uptake of these cookstoves. IDCOL and the Bank supervision team will continue to closely monitor quality, performance and testing aspects to ensure that the agreed tier graduation plan is effectively being implemented.
31. National awareness raising. The mission noted satisfactorily that work is being done by many POs on awareness raising on the benefits of clean cooking to health outcomes, environmental protection, and climate change. Awareness level at the level of clusters is one of the key activities of the household energy component as behavior change is imperative for adoption and sustained use of new cooking appliances. The mission was also informed that IDCOL is at an advanced procurement stage to contract for a large scale awareness raising campaign. The mission encouraged IDCOL to follow up closely this activity as it will reinforce work done by the POs and help stimulate demand for ICS in the country. As recommended in the last December 2013 aide memoire, a close collaboration between IDCOL, GIZ, the CCEB program and Grammen Shakti to coordinate messaging is necessary to avoid creating confusion at the level of households.
32. Capacity development of the POs. The mission recommended that IDCOL continue the implementation of capacity development activities to strengthen managerial, technical, and monitoring skills of POs. Contents of capacity development activities need to be periodically reviewed based on feedback received from POs and also from findings of IDCOL monitoring team.
33. Donor coordination. The mission noted satisfactorily that IDCOL and the USAID Catalyzing Clean Energy in Bangladesh (CCEB) program have signed a letter of collaboration. A meeting was held between IDCOL and the CCEB during the mission. When IDCOL introduces higher quality cookstoves in its program, the convergence of objectives between the two programs will become more apparent. The mission encouraged the two teams to articulate their collaboration on specific activities. The mission recommended a similar collaboration with other donors involved in the clean cooking sector in Bangladesh. In particular, it was suggested that IDCOL fully capitalizes on the opportunities offered by
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the Sustainable Energy for All (SE4ALL). This Initiative has now completed an investment prospectus and it is attracting many investors to the energy access sector in Bangladesh. The mission participated at the opening of the Bangladesh SE4ALL Investor Forum and noted the importance given to clean cooking issues as part of the universal energy access by 2030 goal.
34. Field Trip Observations. The mission visited VERC’s concrete ICS production center at Anandapur and dissemination site at Kamalpur on October 25th. The findings of the team are given below.
(i) At the production center at Anadapur, about 30 units of all types of approved models are produced per day. With the newer molds (i.e., casting frames), the problems encountered earlier (i.e., dimensional accuracy) has now been resolved. One mason and a helper are employed at the facility currently. The curing facility consisted of a large water tank with sufficient volume to match the production level. The production capacity of the center is more than the current dissemination requirements. In fact, some of the productions are being offered to non-allocated areas in the project without IDCOL marking and serial number. So, here is the opportunity for the POs with limited production capacity to get their supplies as pure business proposition; subsidy being not involved in production and distribution.
(ii) The ICS dissemination area visited was a small community in Kamalpur, which is located in one of the assigned clusters of VERC. The community consists of 30 households. Two lady volunteers were found to be working in the area on behalf of VERC. They appeared to have proceeded quite systematically by doing a household mapping of the community and then even doing a poverty mapping (i.e., rich, middle class, poor and ultra-poor). On enquiry, it was found that they were trained prior to their assignment to the community. They succeeded in involving local community leaders in the motivation program. The demand generated is 100% i.e., all the households has agreed to enlist for the purchase of the ICS of different models (mostly two mouth ones). ICS have now been installed 15 households (i.e., 50%) and the rest are expected to be installed in next one month.
(iii) The team visited several households to inspect the installed ICS. Most of them were found to be in actual use. The kitchens appeared to be clean with no smoke and ladies were found to be happy with the ICS use. While some of the ladies said that less fuel was required in the ICS, others were not sure. All of them agreed that cooking was faster with ICS. In one kitchen, rice was found to be cooked in the 2nd mouth in the simmering mode after initial boiling in the first mouth which is fueled. In one case, smoke could be seen from the chimney although kitchen was smoke free. It is possible that wet fuel was being used which produces more smoke. It was interesting to note that the household in the community has supply of fuel wood from their own sources.
(iv) In one case, the kitchen had an opening/ window on the side of the chimney. This could result in the chimney take out the smoke out of the kitchen with the possibility of some smoke coming back through the window. It will be important to sensitize households on this aspect.
35. Following is the agreed work plan for the next six months for the ICS.
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November – 2014 to April – 2015 Work Plan for ICSSl# Activity Description Deadline
1 Onboarding NEW POs
IDCOL will sign participation agreement with 16 selected organizations. The clusters will be allocated to these organizations after due consultation.
December 17, 2014
2 Training Programs for NEW POs
Initially the new POs will be provided with one mason training, one technician training, one IT training and one field promotion training.
December 12, 2014
3 Baseline Survey in NEW clusters
The new POs will conduct baseline surveys in the allocated clusters and IDCOL will assign installation targets after verification.
January 31, 2015
4Inclusion of Tier – 2 ICS under the program
To include tier – 2 ICS under the program IDCOL will rely on two streams of efforts: As per the contract, BUET will produce a Tier – 2 concrete stove by January, 2015. CCEB will facilitate the testing of manufactured stoves in collaboration with IDCOL.
February 28, 2015
5 Promotional Activities by POs
IDCOL staffs will attend at least 50 courtyard meetings, 15 school sessions, 15 CBO meetings, 10 mike announcements and 10 Exhibitions conducted by the POs.
April 30, 2015
6 Refresher Trainings
IDCOL will conduct one mason training, one technician training, one IT training and one field promotion training for all of the POs.
April 30, 2015
7 OC Meeting IDCOL will conduct six OC Meeting. April 30, 2015
8 Installation Inspection
IDCOL will inspect more than 50% of the ICS installed by the POs. April 30, 2015
9 ICS Installation
IDCOL will facilitate POs to ensure installation of following numbers of ICS per cluster per month:
All of the production centers established/contracted by the POs will be visited twice to ensure the quality of production. First round of visits will be conducted within January, 2015.
April 30, 2015
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Annex 6Support to SREDA and Energy Efficiency Engagement
1. The mission met with the Chairman and Member (Energy Efficiency) of Sustainable and Renewable Energy Development Agency (SREDA) to discuss about the status and plans of SREDA Action Plan, and progress made on various fronts, including energy efficiency (EE) policies, programs and initiatives. SREDA staffing has been approved and is under way, with nine staff already started and a total of sixty-one to be on board by June 2015. SREDA has been established as a nodal organization under the Power Division of Ministry of Power, Energy and Mineral Resources (MPEMR) and is empowered through the SREDA Act of December 2012. Although there is an enormous potential for EE across all sectors – both supply and demand side - which can play an effective role in Bangladesh’s energy sector and its energy security, and the momentum for formulation of new EE policies and regulations and their implementation have picked up with the emergence of SREDA, there remains barriers to large scale EE adoption and market transformation, particularly across various demand side sectors.
2. There are several development partners, main ones being GIZ and JICA, which are currently already supporting specific EE activities and programs. Of significance is the JICA- supported Energy Efficiency Master Plan which is currently under way and the draft Report is expected by December 2014. SREDA team expressed to the mission that there is a need for support in various areas and actions from the Bank to support the actions under the SREDA’s EE Action Plan, as well as developing SREDA’s own organization development and strategic business plan, particularly in the area of EE policy implementation and financing. In the meantime, the mission also followed up with SREDA and Bangladesh Chemical Industries Corporation (BCIC) on the latter’s recent formal request to World Bank (through ERD) to provide financial support for the setting up of new more efficient urea fertilizer plants (in lieu of Ghorashal and Palash Fertilizer Units). The mission responded to BCIC by agreeing to support an investment-grade feasibility study from the TA component of the project without any commitment for investment in increasing efficiency of the fertilizer plants (details in para 8 below).
3. The mission agreed in principal to support SREDA to help develop a national-level EE Implementation/Financing Strategy linked to the EE Action Plan that SREDA would pursue. This intervention will draw from global experiences and practices adopting a comprehensive approach along the four pillars that could covert much of this potential into investments, that is, (i) through EE policies (appliance EE standards and labels, EE building codes) (ii) financial incentives (through EE credit lines or EE funds, in terms of soft loans or even risk sharing) (iii) EE awareness and capacity building and (iv) institutional framework for implementation (e.g., for utility DSM, or market-based EE through ESCOs , energy auditor certification program, etc.)
4. The mission agreed with SREDA to engage in specific EE areas on several fronts under the purview of the RERED II project. The potential of earmarking some dedicated TA funds from RERED II, which is with the Power Cell, to SREDA for EE activities was also discussed. SREDA will take up this option internally with Power Division/Power Cell of earmarking a portion of that TA to SREDA. In addition, it was also agreed that the AAA on Bangladesh’s overall energy sector strategy being pursued by the World Bank (with AusAid support) would include a component on Energy Efficiency which will complimentary to the work under the TA components of RERED II project.
5. Institutional Strengthening, Capacity Building and Implementation of Action Plan of SREDA: SREDA could benefit from global experiences and best practices in EE institutional development in other developing and developed countries like South Korea, Malaysia, Thailand, Japan, India, etc. A SREDA Organization Development and Strategic Business Plan is the next logical step and should be developed. It was agreed to have the following as next steps in coordination with activities being supported by other development partners like GIZ: (i) Explore the potential for organizing South-
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South Knowledge and Operational Exchanges with EE Agencies like Korea Energy Management Corporation (KEMCO) in South Korea and Bureau of Energy Efficiency (BEE) in India for helping with institutional development and capacity building of SREDA. This would include visits of EE officials from SREDA and other organizations in Bangladesh to KEMCO, BEE, etc. to exchange information and best practices in implementation and financing strategies linked to specific EE areas of EE policy, financing, marketing, and market development; (ii) Under the RERED II TA, SREDA plans to have long-term advisors (one EE Institutional Development Expert and second one EE Sector Consultant) who will be based in SREDA for a duration of 9-12 months. Based on initial, separate discussions between KEMCO and the World Bank in September 2014, wherein KEMCO has expressed interest in assisting SREDA and Bangladesh on the energy efficiency front, it was agreed that the TOR for the Institutional Development long term advisor consultant will be prepared by SREDA and will be shared with KEMCO to pursue this option.
6. LED Lighting Deployment Program and Incandescent Lamps Phase Out Policy Development: While the large scale CFL distribution (and incandescent lamp replacement) program by REB and other utilities in 2010 was successful in terms of demonstrating implementation approach, the CFL quality became a problem. Several attempts for bidding for the second phase failed due to various reasons. Thanks to the awareness campaigns for the first phase CFLs, there was an increased uptake of CFLs by customers making a free distribution of CFLs by the government not necessary. Government decided to drop the CFL second phase and instead explore the possibility of implementing an LED lamp- based pilot DSM program for households. This would be a household EE program (door-to-door replacement) with the possibility of partial cost recovery through electricity billing systems similar to the programs done elsewhere like in Puducherry and AP in India, or in Mexico (where procurement was done for both the supply of lamps and their distribution also), along with developing an incandescent lamp phase out policy. Over recent years, LED lamp costs have dropped dramatically and efficacy levels have improved significantly making them as a financially attractive and feasible alternative to both ILs and CFLs. Based on global experiences with such programs, including World Bank’s several programs in the past, it was agreed that under RERED II a comprehensive approach will be designed including development of a large scale household level LED lamp deployment program through a DSM modality; formulation of an IL Phase out Policy; and design of a comprehensive consumer awareness program on promoting LEDs and other energy efficient appliances. A feasibility study and options analysis needs to be undertaken that will identify the most effective means of addressing the market barriers for LED.
7. Energy Efficiency Component under the Bangladesh Energy Sector AAA: The EE Component under the AAA (Bank-executed AAA funded by AusAid) would be used to review the ongoing studies, including the JICA-supported Energy Master Plan (the draft for which is expected to be available in December 2014), SREDA’s own EE Action Plan, and to update the work done under the Bank-supported “Road Map for Energy Efficiency Improvements and Demand Side Management” prepared in 2009. The objective is to have a better and more robust understanding of the full landscape of EE opportunities, using best practice, systematic sectoral and main end-use EE improvement assessment involving comparisons across indicators such as Energy Intensity (Energy/GDP), Cost of Energy Savings (Taka/KWh saved), etc between existing stock and regional/global benchmarks. One this is done, specific sectoral end use (demand side) EE measures can be identified, interventions prioritized based on their costs and benefits, the size of energy savings and the practical feasibility of large scale implementation. This analysis will provide a refined estimate of the aggregate potential energy savings (ideally in the form of a common metric) from implementing energy efficiency measures in Bangladesh vis-à-vis regional and global benchmarks, and prioritize among the top interventions (based on total potential savings or potential savings/unit of investment in EE) so that they may form part of the Government's action agenda on energy efficiency as well as inform the strategy for investment in additions to generation capacity. This work will be complemented with bottom up survey evidence on usage to actually calculate the total amount of energy that can be saved and develop a basis for prioritizing among industries/processes and interventions so as to generate both power savings and
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savings in the use of gas and diesel. This AAA work will also attempt to capture the economic and fiscal benefits of demand side energy efficiency, in terms of employment benefits, increased competitiveness, etc. The TOR for the EE Component of AAA will be finalized after the JICA- funded EE Master Plan Report is available to avoid any redundancies. This work would also inform the bank’s future lending program in the area of EE in Bangladesh, and could lead to the next logical step on developing a PCN for a potential EE financial intervention (FY16-17) by the Bank in the future (such as EE investment loan or a EE Line of Credit)
8. Fertilizer Industry Energy Efficiency: Fertilizer industry EE improvement is one of the most important priorities from both energy security and gas sector perspective. The mission learnt during meetings with BCIC that an in-house preparation of a complete feasibility study is already under way, by an inter-ministerial Committee led by BCIC/ Ministry of Industry. It was agreed that the Scope and ToR of this Feasbility Study will be shared with the World Bank by BCIC. Furthermore, under RERED II, with SREDA as the focal point in coordination with BCIC, a review of the Feasibility Study could be done by an international expert, and then the study could be expanded and updated with the TA support to include sensitivity analysis, additional economic analysis, environmental and social impact analysis, and assessment of alternative options (such as importing fertilizer for outside Bangladesh) to make it more comprehensive and investment-grade for BCIC to explore financing options more effectively. The update will also identify measures related to elements of ISO 50001, the new internationally accepted global benchmark for energy management in industrial enterprises
9. The following table summarizes the short-term and medium term EE actions that will be pursued in the future, as agreed with SREDA.
Proposed EE Activity Responsibility Funding Source and Support
Start Date
South South Knowledge Exchange (KEMCO, BEE, etc)
SREDA, World Bank RERED II TA ESMAP
(potential)
Feb 2015
Long Term Advisor (EE Institutional Development)
SREDA, World Bank RERED II TA, ESMAP
(potential)
Apr 2015
LED Lighting Deployment Program – Feasibility Study and Options Analysis
SREDA, REB, Utilities, World Bank
RERED II TA Mar 2015
Incandescent Lamps Phase Out Policy Development
SREDA, World Bank RERED II TA Aug 2015
Consumer EE Awareness Program SREDA, World Bank RERED II TA Mar 2015Energy Efficiency Component under the Bangladesh Energy Sector AAA
World Bank World Bank (AusAid)
Jan 2015
Fertilizer Industry Energy Efficiency Feasibility Study
BCIC, SREDA, World Bank
RERED II TA Mar 2015
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Annex 7List of Agreed Actions
N Actions Responsibility Agreed Date Revised Date Status as of December 31, 2013Access to Electricity Component1. Initiate Procurement Audit of the
POsIDCOL April 30,
2012April 30, 2014 Audit ongoing.
2. Initiate technical audit IDCOL July 1, 2013 April 30, 2014 Audit ongoing.
3. Setting-up Environmental and Social Safeguards Management Unit
IDCOL June 30, 2012 June, 2014 Organogram approved. A new environment specialist joined from May 1, 2014.
4. Six-monthly monitoring report of expired battery collection of SHS
IDCOL June 30, 2012 June 30, 2014 IDCOL is collecting reports through its regional offices on monthly basis and sharing those in each OC meeting. Database completed and being updated.
5. Half-yearly monitoring report on working condition of battery recycling plant
IDCOL March 15, 2012
Every six months
Reports are submitted.
6. Appointment of a consultant for Environmental and Social Audit
IDCOL March 31, 2012
December 31, 2014
Consultant at final stage of selection.
Household Energy Component1. Signing agreement with
BCSIR/VERC/BUET/ICDDRB for testing and other R & D activities
IDCOL August 2013 May 15, 2014 BUET was selected after an assessment by the international consultant. Agreement signed in June 2014.
2. Execution of Bangladeshi stove Camp
Local consultant
Sept 2013 April 30, 2014 An IDCOL team visited the Colorado State University and exchanged their views with the cookstove experts of the university
Technical Assistance to Access to Electricity Component1. Testing Center equipment
procurement, installation and training
IDCOL Nov 2012 December 2014
Participation Agreement between IDCOL and BUET signed. Technical specifications for equipment at final stage of development.
2. Access to Commercial Financing IDCOL Dec 2012 June, 2015
A new consultant will be appointed.
3. Accreditation program for technicians
IDCOL June 15, 2012 June 30, 2013 Completed. A total of 1,618 technicians have been trained so far.
4. 220 V DC Mini-grid testing facility IDCOL June 30, 2013 November, 2014
Agreement signed between IDCOL and UIU.
5. Initiate impact evaluation baseline survey
IDCOL June 30, 2013 December, 2014
Contract negotiation with the selected firm on-going. Scope to be finalized based on learning from DIME impact evaluation workshop.
Efficient Lighting Component1. Development of national guideline
for safe disposal of CFLsPower Cell June 15, 2012 June 2014 Draft guidelines prepared and under
review by Power Cell.
Sector Technical Assistance
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N Actions Responsibility Agreed Date Revised Date Status as of December 31, 20131. Process TAPP revision Power Cell June 30, 2014 Completed.
