Small hydro and rural development in Tajikistan - Energy for development and poverty reduction

Tajikistan

Small hydro and rural development in Tajikistan —

Energy for development and poverty reduction

Zoran Morvaj

Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

Contents

Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia2

1. Situation analysis and UNDP approach2. Area based piloting of RES driven Integrated

rural development (IRD)3. Scaling-Up of the RES driven IRD 4. Enabling Environment for the Scaling-Up 5. Impacts of Improved Access to Electricity on Poor

Households and on the Environment6. Conclusion

73% of population lives in rural areas → consuming only 8.58% of electricity!

53% of population lives below the poverty line (2007);

The PRS III adopted, but poverty causes still not identified;

1 million people considered to be particularly affected by lack of access to electricity;

Tajikistan`s key resource – hydro potential! “Power Island” -> energy security and future energy

exports are top national priorities: long term goal to finish HPP Rogun

Intermediate solution needed!Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

Situation Analyses and UNDP Approach – Background

Energy Poverty = Household’s inability to afford

and/or to access the basic energy services,

in the cases where desire to use these services exist.


Situation Analyses and UNDP Approach – Understanding poverty

Urban and rural poverty

Basic energy services in rural households: lighting, heating, cooking,

Lack of access to reliable and affordable electricity -

key poverty driver at rural communities!


Situation Analyses and UNDP Approach – Understanding poverty

Poverty - Energy – a household energy balance

Up to 3.5 m3 of fuel woodUp to 1000 kizyak pieces of dung

Up to 7000 kg of cotton-plant stemsUp to 10000kg of shrubs

Unprocessed water from rivers

Electricity (in many areas only 2 hours

per day and only for indoor ligting)

Cooking (year round)

Winter heating

Lighting

Drinking

Washing

Poor insulation resulting in

significant heat losses and

high humidity

Indoor pollution


Poverty - Environment

7

Reliance on firewood – environmental degradation


8Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

Poverty - Energy efficiency

9Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

Poverty - Energy efficiency

ND & PRSpop. 7M (50% poverty rate)

M1 M2 M3 M13. . .

Ministries

Issues

Donors

D…l

D1 D2

Projects:

Effects?

Fragmentation!

Coordination and integration!!

Situation Analyses and UNDP Approach – Context

GoT

Region

District

Jamoat

Village

Mahala Mahala Mahala Mahala

Integration and coordination!

Strengthening institutional and regulatory framework for PRS implementation;

Strengthening local capacities to implement and operate specific projects;

City

(4)

(59)

(ap. 406)

13 ministries

Establish verticalcoordination and communicationmechanisms

(ap. ….)(ap.

(ap. ….)

Situation Analyses and UNDP Approach – Governance

Local resources for local development and poverty reduction.

1. Every village in Tajikistan is situated on at least one water flow -

Small scale hydro power plants (sHPP)

2. 280-330 sunny days with 3.5 to 5.3 kWh/m2/day on the year


Situation Analyses and UNDP Approach


Situation Analyses and UNDP ApproachLocal resources for local development and poverty reduction.



Electricity powering local workshops – creation of income generation opportunities!



Varsob district - Roh village: ski resort and hotel

ENERGY

TOURISM



Key objectives

Poverty reduction by improving access to electricity based on local resources and through that improving quality of basic social services, provision of clean water and creation of income generating opportunities – i.e. supporting integrated rural development (IRD);

Provide impuls for economic development in the sectors related to RES (and EE), by devising support mechanisms for implementing rural RES (and EE) schemes;Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia


Key Pillars of UNDP response:

Establishing proper policy framework that will promote community based sHPP and EE projects:

Intermediate Strategy for RES driven Integrated Rural Development and related regulatory framework

Energy Efficiency Master Plan (EEMP) National Programme for RES driven Integrated Rural

Development - National Scaling-Up Standardization guidelines for sHPP construction (30 –

500 kW); Developing local manufacturing, engineering, operation

and maintenance capabilities related to RES and EE: District Development Planning



How we are doing that:

Area based piloting of RES driven Integrated rural development (IRD)


20 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

2. Area based piloting of RES driven Integrated rural development (IRD)

AIMS:– To develop and implement pilot projects for

integrated rural development driven by provision of electricity from mini hydro (possible other renewable) as the driver, and then to integrate clean water, irrigation, food, employment, education and health issues.



Key Issues:

to made the approach sustainable by involving local communities as operators of facilities, collecting payments from communities during winters, and selling electricity to the grid during summers where feasible;

to support capacity strengthening at relevant institution (ministries, district, jamoat, local communities) for implementation of PRS;

Situation Analyses and Approach


Vahdat district/city

• 10 jamoats, 178 villages; • population 268,700:

83,762 are employed, 31,312 are unemployed, 17,601 are pensioners,

• 143 schools;• 83 hospitals;



• Jamoat Bozorboy Burunov • 15,000 inhabitants, 17 villages and 449 dehkan

farms;

The main activities are land cultivation and cattle breeding;

List of Jamoat administration (salaries 467 – 92 TJS/month):

Head of Jamoat - Deputy of the head of jamoat Secretary, Chief accountant, Accountant, Cashier Accountant on statistics, Land surveyor Specialist on regulating national traditions Secretary (assistant), The head of military department Deputy of the head of military department, Operator Maid (cleaner), Guard Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia


The jamoat’s annual budget: 314.680 TJS,

The social units in the jamoat: 3 ambulance stations, 8 medical points,

2 kindergartens, 1 polyclinic. 1 school and 1 hospital (on Vakhdat

district budget)



“On the Introduction of Changes and Amendments to the Law on Energy»Article 1. The following changes have to be Introduced to the law on “Law on Energy” dated November 29, 2000 Reg. # 12, Article 633):Add the following changes to the Article 15 part two and three:“In order to promote and support the development of small energy, to introduce and use alternative sources of energy, ………………..”

Date: July 30, 2007Reg. #310

Pilot project 1:Construction of sHPP for community use during winters and for

selling electricity to the grid (Barki Tajik) during summers



Pilot project s:

Rehablitation of hospital – Gulobad village



Pilot project 2:

Rehablitation of hospital – Gulobad village



Pilot project 3: Rehabilitation of School



Pilot project 4: Water pump station repair



Pilot project 5: create income generation opportunities construction of a Mini diary 500

l/day





Pilot project 6: create income generation opportunities construction of a greenhouse

1. Necessary capacity building initiated and ongoing:

• An Inter-ministerial Task Force formed and active;• DDP for vahdat district developed and publicly

presented,• Jamoat authorities actively patricide in all pilot

projects• Local communities contribute for pilot projects with

labor..

Results Achieved :



~

2. Standardized procedures for community based sHPP:• Clear procedures and

regulation;

• Methodology for setting tariffs

• Conditions for connection to Barki Tajik network

• Technical standardization

• Financial support

• Vocational training

4. EE master plan• Environmental

sustainability in PA

3. Policy and regulatory framework for RES utilization developed

MEDTMoEISCI

Dep. OfStatistics

MoEd, MoAg&Env, MoHJamoat Resource Center, …

IPP

5. Coordination mechanisms for PRS stakeholders in place


Results Achieved :

35

Excellent potential, eagerness of local people and familiarization with technology and its benefits => key to success

Potential to develop local industry and supply chain- standardization


3. Scaling-Up of the RES driven IRD

36

Excellent potential, eagerness of local people and familiarization with technology and its benefits => key to success

Potential to develop local industry and supply chain- standardization

+ it is here already Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia


37

mHPP enables distributed electricity generation at the point of demand

RES generated electricty could replace some of the firewood used for erhatign and cooking The average rural household -40 kilos of collected fuel-wood

per day – women and children Up to 6 hours of physical work daily

Significant financial returns to local economy through incentives and utilisation of locally available goods and services

Creation of income opportunities Overall improvement of livelihoods



38

Energy provided per household [kW] 1 2 3

Total installed power capacity needed [MW] 100 200 300

Total number of sHPPs needed 1.000 2.000 3.000

Total investment required [US$] 100.000.000 200.000.000 300.000.000

Financial return to the local economy [US$] 50.000.000 100.000.000 150.000.000

Total jobs created 40.000 80.000 120.000 Annual return to the local economy in form of incentives for grid connected RES [US$] 1.750.000 3.500.000 5.250.000

Annual decrease of fuelwood consumption [m3] n/a 500.000 2.500.000

Emissions saved [tCO2] n/a 900.000 4.500.000

Support from the Trust Fund required [US$] 101.750.000 203.500.000 305.250.000



3. Scaling-Up of the RES driven IRD Energy Efficiency

39

The selected EE measures should include the following: improving building insulation by using locally

available resources (straw and cane) and technologies (lathing and furring);

enhancing single glazed windows with a double glazing

improving cooking/heating stoves


40

Costs [US$/m2] Min Max Wall insulation (incl. roof) 3 6 Floor insulation (straw) 2 4 Floor insulation (straw+ foam concrete) 10 14 Windows double glazing [average] 50

Surface per house [m2] Costs per house [US$] Min Max

Walls (incl. roof) 50 150 300 Floor 25 50 100 Windows 4,5 225

Total costs 425 625

Surface per social object [m2] Costs per social object [US$] Min Max

Walls (incl. roof) 400 1200 2400 Floor 200 2000 2800 Windows 67,5 3375

Total costs 6575 8575


3. Scaling-Up of the RES driven IRD Energy Efficiency

4. Enabling eenvironment for the Scaling-Up

41

Technology Transfer Know how for O&M Manufacturing capacity Engineering services Training and education Public awareness and information



42

National Trust Fund for RES and EE

To provide organizational and financial support for development of RES and EE in Tajikistan through:

Provision of institutional support for electricity producers from RES, particularly to the local communities , i.e. managing the scheme of guaranteed RES electricity buy-back

Incentives for electricity buy-back for grid connected mHPPs

Financial aid for preparation of RES/EE project (up to 40%)

Financial aid for thermal and for off-grid RES installations (up to 40%; up to 100%)


43

Legal establishment of the National Trust Fund for RES and EE Government Regulation on establishment of “National Trust Fund for

RES and EE” (drafted) Establishment pursuant to the implementation of articles 14-16 of the

Law “On the use of RES” and also on the basis of article 132 of the Civil Code

Main characteristics of the Fund: Independent , non-commercial organization created by the

Government Funded by the Government wholly, or at least partially Established for coordination and management of financial means

targeted for development and implementation of RES and EE programs and projects

Projects of local communities for development of small scale energy supply systems have the priority in awarding financing from the Fund



Sources of financing – selected options

44

Main sources secured by the Government 0.7% of the annual lump sum cost of electricity supplied to the

consumers through distribution grids as well of oil products imported by economic agents

100% of the means collected from the environmental (ecology) tax paid by all vehicle drivers

Other sources: means from the republic and local budgets, non budgeted means

designated to the Fund at the order of the legislation of RT; International and national (financial) institutions’ credits, grants and

donations Financial and material resources, allocated in compliance with

multilateral and bilateral cooperation programs of the Fund; Incomes from the own activities, i.e. incomes from the interest rates

on preferential credits Other sources not forbidden by effective legislations



Awarding financial support from the Fund

45

Co-financing of projects/programs: Allocated to physical and legal entities on the basis of open

competition and inquiry Priorities to be given to community based projects and realization of

programs envisaged in strategic documents → systematic approach Conditions for obtaining financial assistance from the Fund shall be

determined by the Rules of the Fund: up to 50% of total costs for construction of community based RES power

plants with condition that that 50% of power plant value is supplied by local sources in equipment and works → resource based & development driven approach

up to 100% of total costs for national public promotional campaigns,

educational and training programs on RES and EE → human resources development

up to 40% of total costs for preparing project documentation up to 40% of total costs for installation of RES systems for production of heat

and implementation of EE improvement projects up to 100% of total costs for RES and EE projects in remote rural regions and

in the public sectorThird Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia


Awarding financial support from the Fund (

46

National Fund for RES and EE

Administrative CouncilExecutive Committee

EE projects – investment subsidies

EE Foundation RES Foundation

RES projects – investment

subsidies

System Operator

Incentive price

RES power producer

Sources of financing

Electricity delivered to

the grid

Consumers

Sells electricity at price determined by tariff system

Pays for electricity taken over from RES power producer at average

el.production price

Grid connected RES power plant

Consumers

Electricity delivered to

the local consumers

Pays electricity at

price determined

by tariff system

Off- grid RES power plant

Scheme for guaranteed buy-back of RES electricity



Key pillars of the Fund’s operational strategy

47

The Fund is needed to kick-start RES and EE activities on larger scale Demonstrates the Government commitment Attracts international financial institutions!

How to make the Fund fully operational? Systematic approach – operation based on national

strategies and scaling-up plan for RES based IRD Resource-based and development driven – support

primarily mHPP and demonstrate inclusion of domestic materials, products and work force

Human resources development – support educational and training programs to build national capacities for implementation of RES and EE projects



5. Impacts of Improved Access to Electricity on Poor Households and on the Environment

48 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

6. Conclusions

49

Scaling-up impacts: Decreased indoor pollution 6 hours of saved time (women and children) ->

possibility to acquire jobs and to study Thousands of jobs and money making

opportunities created Millions of US$ to go back to local communities Tons CO2 preserved in carbon sinks Biodiversity preservation (decreased

deforestation, soil erosion, desertification, salinization)

Overall improvement of the social services and quality of life


6. Conclusions

50

Addressing poverty by implementing sHPPs accelerates progress to MDGs achievement

Pilot projects proved successful => the way forward is to SCALE UP

Scaling up requires functional Trust Fund and Technology Transfer

The only available short-term solution for poverty reduction is to implement integrated rural development projects based on RES and EE.


Tajikistan

Thank you for your attention!

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Date post:	21-May-2015
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Small hydro and rural development in Tajikistan - Energy for development and poverty reduction

Self Improvement