Policy review - Bangladesh

Grant agreement No. EIE/06/248/SI2.448127 Intelligent Energy – Europe (IEE) COOPENER Acronym RENDEV

Title Reinforcing provision of sustainable ENergy services in Bangladesh and Indonesia for Poverty alleviation and sustainable DEVelopment

D3 - Overview of policies

Policy review document including summary of stakeholder interviews

Bangladesh WP2: Development of solar system toolkits for

monitoring and evaluation, end-users and solar business development

Date of submission 15 July 2008 Organization and responsible of the deliverable:

IT Power / Mark Draeck

Date of start of the project:

01 / 01 / 2007

Duration:

36 months

Organization and responsible of the deliverable:

PlaNet Finance / Pascale Geslain

D3 - Overview of policies

Policy review document including summary of stakeholder interviews

Bangladesh

Final report Authors

Mark Draeck ([email protected]), IT Power, UK

X PU Public PP Restricted to all participants of the project (including

EU Services) RE Restricted to a special group of participants of the

project (including EU services) CO Confidential, only for members of the consortium

(including services of EU)

Disclaimer: The project "Reinforcing provision of sustainable ENergy services in Bangladesh and Indonesia for Poverty alleviation and sustainable DEVelopment (RENDEV)” is supported by the European Commission through the EIE programme (Grant agreement no. EIE/06/248). The sole responsibility for the content of this report lies with the authors. It does not represent the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.

Reinforcing provision of sustainable ENergy services in Bangladesh and Indonesia for Poverty alleviation and sustainable DEVelopment

D3 – Policy Review - Bangladesh

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Table of contents Table of contents...................................................................................................... 1 List of figures............................................................................................................ 1 Executive Summary ................................................................................................. 1 Glossary .................................................................................................................... 1 1. Introduction.................................................................................................... 1 2. Facts and figures ........................................................................................... 1

2.1. Macro economics ....................................................................................... 1 2.2. Democracy.................................................................................................. 1 2.3. Energy sector ............................................................................................. 1 2.4. Renewable energy...................................................................................... 1

3. Energy policy: status and developments .................................................... 1 4. Poverty Reduction Strategy.......................................................................... 1

4.1. Development of the PRSP in Bangladesh................................................ 1 4.2. Millennium Development Goals ................................................................ 1 4.3. Income generation ..................................................................................... 1

5. Solar Energy for Rural Areas: the RERED Project...................................... 1 5.1. Organisational setup.................................................................................. 1 5.2. Rules and conditions ................................................................................. 1 5.3. Who and where........................................................................................... 1 5.4. Big success ................................................................................................ 1 5.5. Barriers ....................................................................................................... 1

6. Micro finance sector ...................................................................................... 1 6.1. Grameen Shakti .......................................................................................... 1 6.2. BRAC........................................................................................................... 1 6.3. ASA.............................................................................................................. 1 6.4. TMSS ........................................................................................................... 1 6.5. RahimaFrooz Energy Services Ltd. .......................................................... 1

7. Solar energy: past experiences and demonstrations................................. 1 7.1. Demonstration projects from LGED ......................................................... 1 7.2. REB’s SHS Program................................................................................... 1 7.3. PV Centralized AC Systems in Rangamati (BPDB) ................................. 1 7.4. RENDEV Project Workshop May 2008...................................................... 1

8. Other renewable energy applications .......................................................... 1 8.1. Wind energy Program by BPDB................................................................ 1 8.2. Micro hydro................................................................................................. 1 8.3. Biogas ......................................................................................................... 1

9. Summary and conclusions ........................................................................... 1 10. References ..................................................................................................... 1 Annex1 Power Sector Structure in Bangladesh .................................................... 1 Annex2 Mission Report Bangladesh 25 May - 1 June 2007 .................................. 1



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List of figures Figure 1 Map of Bangladesh - Source: Lonely Planet.................................................. 1 Figure 2 Solar House System at Gazipur, north of Dhaka - Source: IT Power ............ 1 Figure 3 Battery and load charger at grocery shop in Gazipur - Source: IT Power ..... 1 Figure 4 Local BRAC office in Gazipur, north of Dhaka - Source: IT Power ................ 1 Figure 5 Overview of the different parties and transactions n REREDP ...................... 1 Figure 6 RahimaFrooz solar demonstration system for training purposes - Source: IT Power.......................................................................................................................... 1 Figure 7 Financial model of REB SHS program ........................................................... 1 Figure 8 Improved cook stove in Gazipur, north of Dhaka - Source: IT Power........... 1 Figure 9 Power Sector Structure in Bangladesh - June 2007 - Source: Power Cell ..... 1 Figure 10 RENDEV Project Team in Gazipur, May 2007 - Source: IT Power ............... 1



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Executive Summary Energy sector snapshot Bangladesh has vast gas and coal reserves but the electricity generation system is underdeveloped and actually limiting growth and development in a whole range of sectors. The daily shortages in power and the list of problems coming with it (e.g. shortage in cooling and clean water, economic loss in large and small industries) are largely due to the lack of investments in new power generating capacity over the last decade. Renewable energy Renewable energy currently contributes about 40 percent of the energy consumption in Bangladesh, mainly through traditional biomass. The potential for renewable energy other than biomass is quite high, but current utilisation is minimal. The deployment of the available fossil and renewable energy sources in a balanced mix could enable Bangladesh to relatively easily step up from its current growing economy by 6-7% to 8-9% per year. Moreover renewable energy is best placed to provide access to energy in remote and rural areas. The continued and improved development of energy services for the poor can play a triggering role in tackling poverty by increasing economic activity in both agricultural and industrial areas, thus creating income generation opportunities and livelihood improvement. As the potential is there it is rather a matter of putting in place the right framework conditions at policy and regulatory level in order to step up the level of deployment of renewable energy in general, and solar energy in particular. The success of REREDP As has successfully been demonstrated in Bangladesh micro financing offers a very useful instrument to fill the gap between the investment cost of a RE system and the limited financial resources of the rural poor. The Electrification and Renewable Energy Development Project (REREDP) aims to provide rural and remote households with solar energy systems through micro financing institutions (MFIs). REREDP was started in 2002 as an initiative jointly financed by the World Bank, Global Environment Facility (GEF), KfW, GTZ and is the largest scale, and actually the most successful solar energy project being developed in Bangladesh thus far. REREDP, which is managed by the public investment company Infrastructure Development Company Limited (IDCOL), promotes solar home systems (SHSs) primarily in remote rural areas. Any MFI that can show to meet the criteria as defined by IDCOL is eligible for the loans under REREDP. Currently 15 MFIs are accredited by IDCOL. With more than 120,000 rural households being electrified thus far, REREDP was successful beyond expectation; the initial target to finance 50,000 SHSs by June 2008 had already been achieved by September 2005, almost 3 years ahead of schedule and at US $2.0 million below the initially estimated project cost. Therefore, the target was revised to finance a total of 200,000 SHSs by the year 2009 with additional support from the World Bank, GTZ and KFW. The program’s success is due to several factors:

• The high energy need due to the lack of generation in Bangladesh; • The successful organisational setup using a capable and flexible organisation like

IDCOL, at the same time delegating all operational work to MFIs, system suppliers and installers;



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• The ownership of the system by the client is an essential success factor, as this stimulates the household to appreciate the value and take better care in operating and maintaining the system;

• The close follow-up of repayments, operation and maintenance by skilled people through the local offices. The vicinity of skilled people is essential to allow for a smooth collection of fees, and to rapidly react to system failures;

The focus for RENDEV The RENDEV project aims to complement and strengthen the existing dynamics by focusing on those aspects which are not covered by the current design of the REREDP project, without interfering with the development of the solar market. In particular RENDEV will focus on:

• How to reach poorer people; currently SHS are installed by mostly middle and lower middle class, but the poorest are still unable to afford it. Different solutions are thinkable, e.g. in the short term decrease the initial investment through using a smaller system and/or a higher grant. In addition the solar system has to be linked with income generation. The experiences of the pilot project which is currently being set up by BRAC and GTZ consisting of 425 SHS might offer interesting ideas on this front;

• Target Small and Medium sized Enterprises; aiming to link electrification through PV more closely to income generation. Potential areas of focus include agriculture and food processing, and a range of services at local markets;

The focus of the RENDEV activities should be to identify innovative and promising initiatives related to the above mentioned areas and next to support, strengthen and wherever possible multiply these initiatives.



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Glossary ADB Asian Development Bank BPDB Bangladesh Power Development Board Commission European Commission GHG Greenhouse Gases GDP Gross domestic product GS Grameen Shakti IDCOL Infrastructure Development Company Limited LGED Local Government Engineering Department MDGs Millennium Development Goals PV Photovoltaic Energy REB Rural Electrification Board REREDP Electrification and Renewable Energy Development

Project RES Renewable Energy Sources RES-E Electricity generated from RES $ US Dollar SHS Solar Home System SEDA Sustainable Energy Development Agency TK Taka, national currency in Bangladesh ($1 is about 70

TK) WB World Bank



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1. Introduction This document will focus in detail on the current status, trends and evolutions in those key areas in Bangladesh which are relevant for the RENDEV project, e.g. Poverty Reduction Strategies, Micro Finance and Solar Energy.

This exercise will enable to see if and how the links between those areas are established and could be improved, where the potential for future policy development might lie and which barriers are to be expected in each sector. This report has been produced based on desktop research combined with first hand information collected during the one week visit of the RENDEV project team to Bangladesh in May 2007, during which consultations and interviews with key stakeholders (including government institutions, microfinance institutions, system suppliers, research institutions, local authorities) took place. The discussion and comments from the RENDEV project workshop held in Bangladesh in May 2008 have also been incorporated. The RENDEV project team wishes to thank all the stakeholders who were kindly willing to share their experience and views. Finally the formulated conclusions and recommendations will feed into the further process of the RENDEV project, in particular in developing adequate toolkits for efficient solar energy end use which will be tailored to the specific rural contexts of Bangladesh.

2. Facts and figures The People's Republic of Bangladesh as Bangladesh is officially called consists of 6 administrative divisions (Barisal, Chittagong, Dhaka, Khulna, Rajshahi, Sylhet). The country’s capital is Dhaka. With a population of over 150 million people and an area of 144,000 km2, Bangladesh’s population density of over 1000 people per km2 is among the highest in the world. By comparison, England is with about 130,000 km2 about the same size as Bangladesh, and Italy with 301,000 km2is more than double the size of Bangladesh, both of them with a significantly smaller population. The pressure on natural resources in Bangladesh is accordingly high, e.g. two-thirds of the land is being used for crops, pressure on wetlands and aquatic life is increasing and the share of land under forest is the second lowest in the region and decreasing1. Despite sustained domestic and international efforts to improve economic and demographic prospects, half of the population in Bangladesh still lives in poverty. The country is facing the challenge of overpopulation, environmental degradation and often inefficient governance. Nearly two-thirds of Bangladeshis are employed in the agriculture sector, with rice as the single-most-important product. Major impediments to growth include frequent cyclones and floods, inefficient state-owned enterprises, inadequate port facilities, a rapidly growing labour force that cannot be absorbed by agriculture, delays in exploiting energy resources (e.g. natural gas), insufficient power supplies, and slow implementation of economic reforms.

2.1. Macro economics The annual economic growth of Bangladesh has been over 5% over the last decade. The economic performance remains strong, driven by improved domestic and external demand.

1 Bangladesh Country Environmental Analysis, World Bank, September 2006



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The growth is supported by a dynamic garment sector, and acceleration in private consumption, bolstered by a record increase in overseas workers’ remittances. Half of the population in Bangladesh still lives in poverty, but significant progress has been made in achieving the human development targets of the Millennium Development Goals (MDGs). Some key figures characterizing the current macro economic developments in Bangladesh include2:

- Despite prudent fiscal management, revenue collection remains disappointing; - Gross domestic product (GDP) is projected to grow by 6.5% in financial year 2007; - Robust growth in overseas workers’ remittances contributed to the higher current

account surplus, offsetting the increased trade deficit; - Inflationary pressures heightened with accelerating food prices; - Increasing traffic is creating an enormous challenge for the country to improve the

capacity of the Dhaka-Chittagong Transport Corridor.

Natural resources include natural gas, arable land, timber and coal. Major products from agriculture include rice, jute, tea, wheat, sugarcane, potatoes, tobacco, pulses, oilseeds, spices, fruit; beef, milk, poultry. Industry is focusing on cotton textiles, jute, garments, tea processing, paper newsprint, cement, chemical fertilizer, light engineering, sugar

2.2. Democracy In terms of democratic processes the turbulence during the end of 2006 has made it difficult for observers to make sound judgments. There are signs of hope, but the road ahead will not be fully clear until after the elections, which are currently expected to take place in 2008.

2.3. Energy sector The electricity production in 2004 was 18 billion kWh, most from fossil fuels. Bangladesh has vast gas and coal reserves but the electricity generation system is underdeveloped and actually limiting growth and development in a whole range of sectors. The daily shortages in power and the list of problems coming with it (e.g. shortage in cooling and clean water, economic loss in large and small industries) are largely due the lack of investments in new power generating capacity over the last decade. The main issues contributing to the slow development of the energy sector are:

- Slow pace of gas exploration, which has led to a decline in proven gas reserves; - Over-reliance on natural gas as the principal commercial energy supply for most

consuming sectors; - Prevalence of inefficient gas and electricity consumption practices; - Growing consumption pressure on finite rural biomass supplies; - Slow progress in energy sector reforms, especially adoption of a commercial

orientation by gas and electricity providers, reduction of subsidies and price distortions, and creation of a fully-functioning independent energy regulator;

- Massive investment requirements to meet forecasted growth in energy demand; - Endemic power supply shortages in both urban and rural areas; - Lack of private sector participation in the energy sector; - Limited institutional capacity to follow through on reform and investment programs; - Slow and non-transparent procedures, and lack of decision making at government

level. 2 Interview with Asian Development Bank (ADB), Dhaka, Bangladesh, May 2007 and Bangladesh Quarterly

Economic Update, ADB, March 2007



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2.4. Renewable energy Renewable energy contributes about 40 percent of the energy consumption in the country, mainly through biomass, e.g. agricultural residues contribute almost half the national total, with cow dung, bagasse and fuel wood making up the rest. The potential for renewable energy other than biomass is quite high, but current utilisation is minimal, apart from the 230 MW of hydropower being produced at the Kaptai Hydropower Plant and the approximately 100,000 solar home systems that were installed by end of 2006.

Figure 1 Map of Bangladesh - Source: Lonely Planet

3. Energy policy: status and developments Despite the aforementioned barriers there are hopes for a wind of change from the current interim government, which seems to be willing to cope with the enormous challenges the energy sector is facing. A draft policy framework, which includes a strategy and priorities on “the four fuels” (gas, coal, energy efficiency and renewable energy), is currently under revision by the government, and is hoped to be approved before the end of the year 2007. In parallel, a Strategic Action Plan with concrete actions and measures for each of the fuels, is being prepared. On the other hand it remains unclear whether this interim government, being overloaded with tackling short term urgencies, will be capable to establish the necessary longer term policy framework. The interim government will probably concentrate on the most urgent issue, e.g. the daily shortage of around 2000 MW in power, whilst structural and long term measures are not expected until a new government has been elected. The most optimistic scenario would be for the interim government to prepare and initiate the power reform process, but the actual implementation and realisation in any case will be postponed until the next government is installed. Next elections are foreseen in 2008.



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The current political situation features additional barriers towards a wider use of renewable energy, e.g.:3

• The Government is under pressure from the private sector and the industry who wants to develop conventional power through improving and expanding the central grid;

• The knowledge gap is immense, renewable energy is thought to be SHSs only. The fact that a wider deployment of different renewable energy technologies, including grid connected plants, could actually help to tackle the current power crisis is not sufficiently acknowledged;

• The high subsidies given to conventional power generators make renewable energy more expensive (no leveled playing field)

• In addition, hardware like solar modules is mostly imported (from India, Japan and others) and only a few companies dominate this market.

It is expected that a normalisation of the power sector and surrounding policies will easily take 5 years. The current shortage in power in the short term can be taken care of by:

• Repairing several power plants which are currently under maintenance and could be back in operation fairly soon;

• Small scale new plants: Small Power Plants 200 MW (10 plants between 10-30 MW should take no more than 15 months to install);

• Demand side management e.g. for instance shops get energy until 7 pm instead of 10 pm (negative effect on income generation), industry holidays spread over the year

Plans to tackle the power shortage in the medium and long term include: • The installation of larger scale new plants: a 450 MW gas plant should be under way.

The time frame for this kind of power station to be fully operational takes at least 18 months;

• For the longer term different developments are being considered: • The operation towards full capacity of the largest gas field Bibiyana in the north

eastern Habiganj district; • The development of Barapukuria coal mine; • The import of hydro electricity from neighbouring country Myanmar. It must be

noted that the governmental dialogue just started (May 2007), and as the new hydro plant should be close to the border and no site has been selected yet, this process, if at all taken forward, will take a while.

The money for the investments necessary to upgrade the power sector are thought to be available, provided a clear policy framework is established. It remains to be seen if and how the government will be willing to adopt the Draft Policy Framework. Apart from an increased use of gas and coal to overcome the power shortage, renewable energy (and energy efficiency) measures can support this policy. The increase of renewable energy in the energy mix effectively offer the opportunity to improve the balance between energy supply and energy demand, while at the same time minimising effects on the environment and the natural resources. An intelligent mix of the different available energy sources can enable Bangladesh to step up relatively easy from its current growing economy by 6-7% per year to 8-9% per year. The 3 Interviews with key stakeholders in May 2007, Dhaka, Bangladesh



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potential being right there, it is a matter of putting in place the right conditions and framework at policy and regulatory level.4 Moreover renewable energy seems best placed to provide access to energy in remote and rural areas. The continued and improved development of energy services for the (rural) poor can play a triggering role in tackling poverty by increasing economic activity in both agricultural and industrial areas (e.g. through irrigation and food processing), thus creating income generation and livelihood improvement. At the same time access to energy has the ability to trigger the removal of inequities arising from gender, remoteness and income. Effectively, an increased economic growth rate up to 9% will be essential for other policy areas to develop and the MDGs to be reached. Micro financing enters the picture as it offers a very useful instrument to fill the gap between the investment cost of a RE system, and the limited financial resources of the rural poor. Relevant in this context is the recent decision of the establishment of a central agency, called Sustainable Energy Development Agency (SEDA), to streamline the different existing policies and initiatives5. The renewable energy and rural electrification policy has been characterised by dispersed responsibilities over different government bodies, often without clear links or scope for harmonisation, actually sometimes even contradicting each other. Power Cell is currently preparing the start up of SEDA, which is said to be operational before the end of the year 2007. The creation of SEDA aims to streamline the varying and often uncoordinated initiatives throughout different government departments and agencies. The following sections will describe in more detail the current policy status and expected development in the areas of poverty reduction, micro finance and renewable energy.

4. Poverty Reduction Strategy

4.1. Development of the PRSP in Bangladesh Bangladesh’s “National Strategy for Economic Growth, Poverty Reduction and Social Development” was published in December 2002 and set out the lines to develop a poverty reduction strategy (with special focus on the removal of hunger and chronic poverty) and accelerating the pace of social development (with particular emphasis on empowering the poor and achieving gender equality). Bangladesh’s Interim Poverty Reduction Strategy Paper (I-PRSP) was completed in March 2003. It moved from the I-PRSP to a full (draft) PRSP incorporating prioritized strategies and a medium-term macroeconomic framework for combating poverty. The draft PRSP released in January 2005 then centred on eight policy priorities that pursue the goal of accelerated poverty reduction. These include:

- maintaining macroeconomic stability; • maximizing pro-poor benefits from the growth process; • strengthening the social safety net; • advancing human development;

4 Interview with UNDP, May 2007, Dhaka, Bangladesh 5 Interview with Power Cell, May 2007, Dhaka, Bangladesh - Power Cell was created by the government under the Power Division, Ministry of Power, Energy & Mineral Resources, serving as a Technical Assistance unit to the implementation of the power sector reform in Bangladesh.



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• assuring participation of poor and disadvantaged groups in the development process and their empowerment;

• promoting good governance; • improving service delivery in the areas of basic needs; and • protecting the environment.

The Bangladesh PRSP was finally completed in November 2005 and showed that Bangladesh had made important gains in the fight against poverty. Compared to three decades ago, Bangladesh today is out of the shadow of famine. The country has established a credible record of sustained growth within a stable macroeconomic framework. Child mortality was halved during the 1990s, life expectancy has increased to 61 years, net primary enrolment went up significantly as did women’s economic participation, gender parity has been achieved in primary and secondary education, and, depletion of tree cover has been reversed rising from seven to 15 percent through a focus on social forestry. In terms of infrastructure, a focus on rural roads has succeeded in substantially banishing the curse of remoteness for the majority of villages. Indeed, as is shown in most estimates, the poverty incidence in Bangladesh is actually declining, based on the Direct Calorie Intake (DCI) and Food Energy Intake (FEI) methods to measure poverty. Based on DCI, head-count poverty declined from 46.2% in 1999 to 40.9% in 2004. The corresponding estimates under the FEI are 44.7% and 42.1% for 1999 and 2004 respectively. On the other hand, aggregate poverty rates remain dauntingly high, and concentrations of extreme poverty persist. Inequality is a rising concern, women continue to face entrenched barriers and insecurities in their attempts to consolidate their gains on social and economic fronts, and governance weaknesses stand in the way of accelerating the growth process.

4.2. Millennium Development Goals In terms of attainment of the Millennium Development Goals (MDGs), the goal of reducing the income-poverty level by half by 2015 would require an accelerated pace poverty reduction from 1.5 per cent per year observed in the 1990s to 3.3 per cent for the period 2000-15. The calculations show that if the past trends of income inequality persist in the next decade, Bangladesh will have to sustain a GDP growth rate of at least 7% per year over the next 15 years for reaching the income poverty reduction target.

4.3. Income generation One of the strategic elements of the anti-poverty policy is to accelerate and expand pro-poor economic growth for increasing income and employment of the poor in both wage and self-employment. Priority will be given to the promotion of small and medium industries, especially agro-processing, information technology and exports.

5. Solar Energy for Rural Areas: the RERED Project The Electrification and Renewable Energy Development Project (REREDP) aims to provide rural and remote households with solar energy systems. It is the largest scale, and actually the most successful solar energy project being developed in Bangladesh thus far.



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5.1. Organisational setup REREDP is managed by the public investment company Infrastructure Development Company Limited (IDCOL). IDCOL's mission is to promote economic development in Bangladesh by encouraging private sector investment in infrastructure projects. Among them, IDCOL provides refinancing for small infrastructure projects (renewable energy) implemented by non-governmental organizations (NGOs)/microfinance institutions (MFIs) and other private entities. REREDP is jointly financed by the World Bank, Global Environment Facility (GEF), KfW, GTZ over 2002 to 2009, and promotes solar home systems (SHSs) primarily in remote rural areas. More than 120,000 rural households have been electrified thus far. IDCOL promotes SHSs under REREDP through 15 MFIs6, including Grameen Shakti, BRAC Foundation and TMSS. The SHSs are sold (mostly through micro-credit) by MFIs to households and business entities. IDCOL provides refinancing facility to the MFIs and channel grants to reduce the SHSs costs as well as support the institutional development of the MFIs. In addition, IDCOL also provides technical, logistic, promotional and training assistance to the MFIs. IDCOL provides grants and refinance, sets technical specification for solar equipment, develops publicity materials, provides training, and monitors Partners Organizations’ performance such as Grameen Shakti. The financial support from IDCOL is two fold:

• Investment support per system: direct subsidy consisting of 50$ grant per solar system (the cost for a 50 W system is around 300 $)

• Soft loan for MFI: 80% of the loan over 1-5 years at 6%. The total amount of the loan is actually calculated per system, at a maximum of 230 $ per system.

5.2. Rules and conditions • The SHS can not be on a site where a grid is available; • It must be the first SHS for the household in question • A standard loan agreement with the end user has to be signed, including the service

will be free of charge over the repayment period (1-3 years, for the end user to decide);

• The end user agrees to pay a monthly fee, which has to be collected by someone from the MFI’s local office.

The client pays a minimum of 10% down payment (around 30 $). The MFIs charge more than 6% (generally well over 10% in order to cover managing, administration, operation and maintenance costs). The most popular package is a 50W system financed by a 2 year loan. IDCOL sends out 15 to 20 inspectors who check about 50% of the newly installed systems every month. The repayments by the MFIs are good thus far.

6 Any MFI that meets the criteria as defined by IDCOL is eligible for the loans under REREDP. Currently 15 MFIs are accredited by IDCOL.



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5.3. Who and where The majority of the clients are the middle income household. Some averagely poor households commit to buying a SHS when they have some prospects or hope to increase their income in the near future. The poorest households remain unable to afford the down payment or the monthly payments. The maintenance of the system is mostly done by women. Although the demand in urban areas matches that in rural areas the program focuses on rural and remote areas, because of the higher needs in rural areas and because these areas are unlikely to be electrified through grid extensions in the foreseeable future. The clients are relatively universally spread over Bangladesh, as from 30 kilometers outside of Dhaka (although some of the poorest areas in hilly areas in the southeast are probably less covered).

5.4. Big success REREDP was successful beyond expectation; the initial target was to finance 50,000 SHSs over a period of five-and-half years (January 2003 - June 2008). This target was already achieved in September 2005, almost 3 years ahead of schedule and at US $2.0 million below the initially estimated project cost. Therefore, the target was revised to finance a total of 200,000 SHSs by the year 2009 with additional support from the World Bank, GTZ and KFW. The World Bank seems supportive towards providing additional funding; a decision is expected by the end of 2007. The program’s big success is due to several factors:

- The high energy need due to the lack of generation in Bangladesh; - The successful organisational setup using a capable and flexible coordinating

organisation like IDCOL, at the same time delegating all operational work to MFIs and system suppliers and installers;

- The ownership of the system by the client is pointed out by several stakeholders to be an essential success factor, as this stimulates the household to appreciate the value and take better care in operating and maintaining the system7;

- The close follow-up of repayments, operation and maintenance by skilled people through the local offices8. The vicinity of skilled people (with offices on average every 20 kilometres) is essential to allow for a smooth collection of fees, and to rapidly react to system failures (for example battery charging problems, charge controller breakdown);

5.5. Barriers There seem to be no technical barriers. The only barrier IDCOL reports is possibly a financial one, in the sense that solar module prices are going up, and secondly that due to high success additional donor funding is required.9 Despite the obvious success some issues can be identified:

7 As opposed to the so called “fee for service” approach, where clients pay only for the use/service of the solar system (or only the battery), but actually never own the system (or the battery). 8 Only the leading MFIs Grameen Shakti and BRAC have such an infrastructure of local offices all over the country in place. The smaller MFIs focus their activities on specific areas. 9 Interview with IDCOL, May 2007, Dhaka, Bangladesh



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• The poorest: In terms of poverty reduction strategies, the poorest households remain unable to link in to the program. In principle several solutions are possible, e.g. decrease the size of the system10, or increase the investment subsidy for the poorest clients. Systems could be given for free to some households or cross subsidies could be used, where a higher price is paid by rich households which subsidises the cost of the system for poor households. 11In order for the possible solutions to be successful in the longer term they must aim at increasing the income of the household. Electrification to improve the living conditions undoubtedly has advantages in the sense of health and education, but is not economically sustainable in the longer term.

• PV prices: The rising solar module prices could be a limiting factor for further growth, and especially for providing cheaper systems towards the lowest incomes, but on the other hand different signals show that module prices are expected to decrease again as from 2008, due to increased manufacturing capacity of silicon wafers which is expected to be operational soon. What might be important though, is to stimulate competition and allow for different producers to suppliers modules and other parts of the solar system;

• Aid dependency: stakeholders pointed out that the provision of small scale energy systems is often hardly a profitable business for small and medium sized MFIs, as they lack the scale and necessary resources.12 The current growth of the solar system markets is possible thanks to financial support from international aid agencies, and because it is usually developed as a side activity within a larger company where it can, when necessary, rely on more profitable core businesses;

• Training: Although the continuous training programmes at different levels (MFIs through system suppliers, new and existing clients through MFIs) seem to play an essential role in the program’s success, some stakeholders pointed out that the current training efforts are not sufficient.

10 GTZ and BRAC are currently running a pilot on smaller systems for poorer households 11 Mr. Erich Otto Gomm, RENDEV Project Workshop May 2008 12 MFIs have to finance 90 days of working capital, which is the average time gap between system procurement and money from IDCOL coming in. Therefore only sufficiently large MFI have the necessary financial capacity. Some system suppliers give longer credit (up to 90 days) before invoices have to be paid.



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Figure 2 Solar House System at Gazipur, north of Dhaka - Source: IT Power

Figure 3 Battery and load charger at grocery shop in Gazipur - Source: IT Power



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6. Micro finance sector The micro finance sector in Bangladesh is amongst the most advanced in the world. Presumably the most cited and best known micro finance institute is Grameen Shakti, which is part of the Grameen family. Another big player in the sector is BRAC, with similar activities as Grameen Shakti. ASA is another one, but with no activities in solar energy. Competition between the MFIs is high, and clients decide based on price, quality of products and services provided. Grameen Shakti and BRAC are among the market leaders and have a fairly good reputation. Apart from the giant players with several million clients each, a lot of smaller players are active in the market. One of those smaller MFIs is Thengamara Mohila Sabuj Sangha (TMSS). The organization and activities of these four MFIs which where interviewed by the project team in Dhaka in May 2007 are described in more detail below.

6.1. Grameen Shakti In 1996 Grameen Shakti13 was initiated within the Grameen family as a not for profit company to provide access to renewable energy technologies at affordable costs in remote and rural areas of Bangladesh. In practice mostly PV has been developed and up to June 2007, Grameen Shakti has installed 100,000 solar house systems (SHS), installing at an average rate of 4000 SHS per month. Grameen Shakti currently holds a market share of 62%.

6.1.1. Organisation Grameen Shakti has 1500 people in the field working on its solar activities in Dhaka. The facilities of Grameen consist of 300 unit offices, 39 regional offices and 30 technical centres throughout the country. The network of technology centres is managed mainly by women engineers, which will train hundreds of local women each year to be solar technicians, equipped with tools providing servicing, repairs, spares and accessories to their neighbours.

6.1.2. Technology GS installs small SHS of 10 to 20 Watts which are popular for homes and businesses. Micro-utility systems are also very popular in marker places where one person installs a large system and rents lights to neighbours, reducing costs and increasing income. 14 The initial challenges to SHS were the high upfront cost, lack of trained staff and little awareness among the rural populations about solar technologies. However GS feel they have overcome these challenges and are now installing in one month the number of systems which used to be installed in a year. GS belvieves the success of the system has been due to the network of trained engineers, linking the technology with income generation, innovative products, quality control and awareness building programmes.15

13 “Shakti” means “energy”, “Grameen” means “village”. 14 Mr. Dipal Chandra Barua, Grameen Shakti, RENDEV project workshop May 2008 15 Mr. Dipal Chandra Barua, Grameen Shakti, RENDEV project workshop May 2008



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The IDCOL rules define that maintenance has to be free during (at least) the length of the loan. Afterwards, local officers are supposed to check the installation during their collection tour.

6.1.3. Future Grameen Shakti is currently by far the market leader, and is actively seeking to grow and expand its activities. The management has formulated some challenging objectives:

• 1000 offices • 5000 employees • 1,000,000 clients for SHS by 2015; • 10,000,000 clients overall;

6.1.4. New projects Grameen Shakti is currently developing improved biogas cookers. The new cooker would cost about 700 TK ($10), allowing for clients a payback within 6 months. Biogas cookers are said to be generally cheaper and much more efficient than solar cookers.

6.2. BRAC BRAC was established in 1972 as an NGO, and started its microcredit program in 1990. Up to June 2005, a total amount of $2.28 billion has been disbursed as a microcredit to its 4.5 million targeted client’s beneficiaries (98 percent women) in 64 districts through 1373 branches, and the recovery rate is 99.63 percent. The BRAC Solar Energy Programme for Sustainable Development which was registered under BRAC Foundation, installed 25000 SHS thus far under the Electrification and Renewable Energy Development Project (REREDP – see further), of which 1100 in the last month (May 2007).

6.2.1. Organisation BRAC has 5 people working on its solar activities in Dhaka, and 400 outside in the field. The key people are the Project Officers (POs) who are in charge of sales, installation, recovery, and maintenance for the clients and systems in their area. POs generally hold an engineering degree. The facilities of BRAC Foundation, consisting of 260 unit offices, 59 districts office and 30 technical centres throughout the country, are used to manage and follow up the clients of the solar loans and the solar systems. BRAC has one warehouse for spare parts in each district office.

6.2.2. Financial model

Monthly payments Down payment 15% of Total Cost

Loan length 1 to 3 years Interest cost 12.5 %

The costs for a typical system are about 21500 TK16 (40W), 26500 TK (50W), 37,200 TK (75W). The most popular package is a 50 Wp system with a two year loan.

16 $1 is just below 70 TK



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A 40 Wp system can operate 2 light bulbs for 4 hours, a 50 Wp 3 lamps, 65 Wp 4 lamps and a 75 Wp system 5 lamps. The operation of a black and white TV is equal to the use of two light bulbs. Customers are generally not required to pay a guarantee. In the case of repetitive non-payment the solar system ultimately can be taken away from the client. This is highly exceptional, as the collection rate is about 98%, which is in line with the collection rates for BRAC loans for other products.

6.2.3. Maintenance The IDCOL rules define that maintenance has to be free during (at least) the length of the loan. Afterwards, POs are supposed to check the installation during their collection tour.

6.2.4. Training POs are trained on sales, loans and installation. Initial training is 3 days long. IDCOL and RahimaFrooz organize technical training while BRAC focuses on human skills. BRAC also organizes training in villages. POs train the client on how to operate and maintain the solar system. POs are also trained in using tools to estimate the potential client’s willingness to pay. In terms of promotion BRAC operates a direct approach. IDCOL also gave subsidy for promotional material (T-Shirts, Posters and Meetings).

Figure 4 Local BRAC office in Gazipur, north of Dhaka - Source: IT Power

6.2.5. New projects BRAC is currently working on a pilot program with GTZ, consisting of 425 SHS aimed at the poorest households. In June 2007 200 of the 425 SHS had been installed. Depending on the results an upscale will be considered.



14

They also asked IDCOL for funding to expand the SHS to mini grid systems, which suggest a big potential for the rural poor, especially in terms of income generation. Another initiative is looking at solar lanterns from 3 to 5 Wp (produced by Tata BP).

6.3. ASA ASA was established in 1978 and started its microfinance activities in 1991. In 2005 ASA also created Catalyst Micro Finance Investment (CMIC) to invest and provide assistance to emerging MFIs in Asia, Africa and Latin America. ASA has good links with Sri Lanka, Pakistan, Afghanistan, Nigeria and Indonesia.

6.3.1. Products ASA provides two types of loans: small loans and small business loans. Small loans are given to women whose monthly income does not exceed $31 and who possess less than 50 decimals of cumulative land. The initial business loan size is $62 to $93 and may increase by $16 to $31 per year. Its small business loan is usually given to men but women demonstrating competence in business are subjected too.

6.3.2. No solar ASA does not step into the solar business because:

• The initial investment is too high; • The length of the loan is too long, as ASA typically runs loans about 1, maximum 2

years • They do not have the necessary expertise or historical interest in solar technology.

6.4. TMSS Thengamara Mohila Sabuj Sangha (TMSS) is an NGO founded in 1980 by the beggar women of Thengamara village in the Bogra district.

6.4.1. Organisation TMSS follows a cooperative approach and typical beneficiaries are literate women with less than 0.50 acres of land in the family. Until now 1.9 Million women were organized into groups within its operational area (throughout Bangladesh covering 62 districts).

6.4.2. Scope TMSS mainly focuses on the empowerment of women operating in the areas of poverty alleviation, rural development (e.g. activities related to agriculture and fisheries) and links its activities to socio-economic and environmental objectives. TMSS also acts as an MFI and helped to gain self-reliance through the design and implementation of innovative projects, including the utilisation of natural resources and waste products for development (such as biogas, organic fertiliser, and possibly SHS). TMSS is also active in hazards reduction and health improvement.

6.4.3. Little solar but community potential Solar systems are seemingly not a priority for TMSS, mainly due to the fact that SMEs face difficulties in overcoming financial and management issues related to financing SHS. TMSS points out cooperative actions have been historically embedded in the Bangladesh society through communal running water systems, or the communal maintenance of dikes in



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the southern areas, where the government pays for the infrastructure and village communities are responsible to deal with the sound operation and maintenance. As villages are the most important entity in Bangladesh, and villagers have a tradition of working together on communal tasks, solar mini grid systems have the potential to be successful, provided that the community is involved in the down payment of the project (cf. ownership is crucial), fee collection and service.

6.5. RahimaFrooz Energy Services Ltd. Rahimafrooz is a long-established family-owned business in Bangladesh, with interests ranging from energy to supermarkets to the internet. Rahimafrooz was started in 1981, and has focused increasingly on solar PV batteries and other components, for which Rahimafrooz Energy Services Limited was created as a power services company (acting as a component and system supplier to MFIs). Rahimafrooz Energy Services Ltd. Provides SHS to 10 out of 15 partners of REREDP. An overview, in which the role of RahimaFrooz Energy Services Ltd. (or indeed other system suppliers) is shown, is presented in Figure 5.

Figure 5 Overview of the different parties and transactions n REREDP

RahimaFrooz Energy Services Ltd. provides its client MFIs with short term credit (60 to 90 days at 5%) in order for them to overcome the time of installing the system and IDCOL transferring the grant and special credits.

IDCOL

MFI End User RahimaFrooz -system supplier

Procurement + Credit

60 to 90 d, 5%

Install and provide credit

Down payment

Declare installations monthly

Inspects monthly then provide grant and soft loans

Payback



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Figure 6 RahimaFrooz solar demonstration system for training purposes - Source: IT Power

7. Solar energy: past experiences and demonstrations The growing energy demand in all sectors is the most critical short-term energy priority, and an increased use of gas and coal seem in the first position to handle this evolution. On the other hand, the renewable energy potential is significantly larger than current deployment and, especially for rural areas different proven and commercially available renewable energy technologies can provide a clean and modular source of energy. In terms of technologies photovoltaic energy, biogas, bio fuels, and wind energy are targeted, with applications ranging from systems for the household and tertiary (schools, hospitals…) sector to mini-grid systems for communities and commercial markets in isolated areas where no grid is available. In this respect renewable energy offers a promising vehicle to meet the country’s energy access and poverty reduction goals. The following section gives an overview of the solar energy projects and programs in Bangladesh. These experiences will give a better understanding of the historical evolution of solar energy in Bangladesh, as these experiences have shaped the currently running programmes, and secondly some of the pilot projects might show interesting opportunities on which the RENDEV project can build. PV is acknowledged to be generally easier to implement than other technologies, especially for households but also for communal and other applications. Some examples using other renewable energy technologies like wind, micro hydro and biomass are presented in Annex 3.

7.1. Demonstration projects from LGED Local Government Engineering Department (LGED) is a government body and has a unit specialised in renewable energy demonstration projects, supported by UNDP and GTZ.



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7.1.1. PV powered mini grid A 5 kWp mini power house for a fishermen’s village in Chokoria, near Cox’s Bazar with distribution lines to individual households within a cluster in the village. This is a good example of distributed generation in a non-grid area where the local people have been trained to operate and maintain the system and do after sales service as and when required. The inhabitants pay for the power given and have themselves instituted penalty systems for any default in the monthly payment. It is a true example of collective efforts and a good example of how these small interventions can improve the quality of life of the marginalised people. Stakeholder interaction at the location revealed that considerable social benefits have been achieved consequent to the intervention. These are in the form of improvement in income from additional income generation activities in the evening hours, better education opportunities, better heath facilities, social harmony and many others. This is a good example to replicate in other similar locations in Bangladesh.

7.1.2. PV for rural market A 1.8 kWp PV centralised system for a rural market in an off-grid area in Jenaidah provides lights to shops and commercial establishments in the evening hours. The social impact of such interventions is seen from the extension of market hours into the late evening thus increasing rural economic activities, the security felt by the shop owners and shoppers, convenience of coming to market in the relatively cool hours of the evening by villagers in departure to their earlier habits, etc. This can be replicated in other remote areas.

7.1.3. St. Martin’s Island A 10 kWp Solar Wind hybrid at St. Martin’s Island is a landmark initiative in the country towards introducing the latest in the hybrid technology which might be the vogue in the future. However, this being a one-off project, the economic viability of the same needs to be carefully understood prior to replication of such projects in other locations in the country. The initiative is providing power to a complex of the Forest Department on the island. A total of 4 solar submersible pumping systems (4 X 1800Wp) are underway at Barendra area in Rajshahi complementing another SEMP project of the Barind Multipurpose Development Authority (BMDA). This will be completed within 2005. This will probably be the first introduction of solar pumping of water primarily for drinking water purposes for the village communities, definitely replicable in many other locations in Bangladesh. It was pointed out that the experience at St. Martin’s island has not been particularly successful. There was not sufficient follow-up, nor operation and maintenance. Another barrier pointed out was the lack of detailed information on where are the most interesting wind sites. On the other hand the Renewable Energy research Centre (RERC) of the University of Dhaka made in February 2007 produced a comprehensive Solar and Wind Resource Assessment for Bangladesh, supported by UNEP and GEF.17

7.2. REB’s SHS Program The Rural Electrification Board (REB) was created by the Government of Bangladesh (GOB) in 1977. REB is a statutory Government organization responsible for implementing countrywide rural electrification. To achieve the objectives of rural electrification program at the implementation level, REB established Palli Bidyut Samities (PBS, or means Rural Electric Societies) based on the model

17 Interview with UNDP and RERC, May 2007, Dhaka, Bangladesh



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of Rural Electric Co-operatives in USA applying the principle of co-operative, democratic decentralization and ownership of consumers. A PBS, which owns, operates and manages a rural distribution system within its area of jurisdiction, is an autonomous organisation registered with REB. The member consumers participate in policy making of PBS through elected representatives to the PBS governing body known as Board of Directors. REB has been involved in solar energy since the early 90’s, and estimates the use of solar energy as most useful for remote areas isolated by the rivers, e.g. especially in the delta in the south. Photovoltaic energy is the most appropriate due to the year round abundance of sunshine, whereas the wind resources are much more variable per region. A potential for micro hydro exists only in the hilly districts in the north eastern part of the country, but is not constant throughout the year, e.g. no or less water in the dry season.

7.2.1. Pilot in 1998 In 1998 REB was involved in a French funded project using a central charging system in 3 different communities. Individual households could collect a charged battery and paid only for the service, with the monthly fee ranging between 171 TK for 20W and 353 TK for 100W battery. This “fee for service” approach, although successful in some other developing countries18, did not bring the expected results. The good thing, especially for poorest households, is the financial being limited to a (low) monthly payment. On the other hand the lack of ownership (either batteries or solar system were owned by the individual user) was identified as the key reason for failure, as it resulted in a lack of proper care, and poor operation and maintenance. A possible solution could include providing each household with its own battery. Naturally the monthly fee would increase (to repay the small loan, and a down payment), but it would remain relatively cheap as the equipment of the central charging system remains a communal system. Communal systems undoubtedly having advantages when properly managed, different stakeholders expressed the individual ownership as a key condition for success.

7.2.2. Demonstration in 2002 Since 2002 REB has been running a SHS project similar to REREDP ran by IDCOL, although with some differences in scale, scope and organisational setup. The program is funded by GEF (investment subsidy per system) and the World Bank (soft loan), see Figure 7 for details on the financial model. Currently six cooperatives (of the total of 70 being targeted) are running collective projects. The SHS is installed on a household but the user only pays monthly fees (thus not addressing the ownership issue as explained above). Users have to provide 6 months advance fee, acting as a guarantee. The project is facing huge problems in terms of maintenance issues and the lack of spare parts (especially for light bulbs). This is probably due to the lack of the infrastructure of local offices and warehouses as foreseen in the REREDP governed by IDCOL.

18 In some African countries a system of payment per charge (instead of a fixed payment per month) is operated, which works quite well and does not imply a constant financial burden in the form of a monthly payment. The lack of ownership possibly being less of an issue in these cases, a negative social effect was that often the youngest kids of the family were appointed for the (often long) walk carrying the heavy battery.



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Since 2002 3400 systems have been installed, and a target of 12,000 by 2008 was set.

Grant by GEF: 90 $ per SHS Interest rate on

loans (provided by World Bank):

3 %

Systems System Prices Monthly fee for

users 40 Wp 26000 Tk 171 Tk (+ 5% Tax) 50 Wp 28000 Tk 195 Tk 80 Wp 42000 Tk 291 Tk 100 Wp 47000 Tk 331 Tk

Figure 7 Financial model of REB SHS program

7.2.3. Chittagong Another solar energy development programme, funded by the local government, focuses on the Chittagong hill tracts area in the north east. In the Juraichhri area of Rangamati district around 400 solar panels (of 120 Wp) each were recently installed, and another 400 panels were installed over the last six months in Thanchi Upozila of Rangamati district. Apart from SHS, the project included sets of Solar PV Street Light Systems (of 75 Wp each), Solar PV Submersible Water Pumps (of 50,000 litres per day lifting capacity of each pump of 1800 Wp (15X120Wp) each), Solar PV Vaccine Refrigerators for the Health Care Centres (of 360 Wp (3X120Wp) each).

7.3. PV Centralized AC Systems in Rangamati (BPDB) RahimaFrooz on behalf of Bangladesh Power Development Board (BPDB) installed a communal PV plant for a local market for which it provides lighting loads and operates small industries like rice husking mills and saw mills. The 10 KWp system supplies 135 shops, and a board is put in charge of collecting the bills from the beneficiaries. RahimoFrooz pointed out the system works pretty well. The additional advantage of those systems could be their direct link with income generation as compared to SHS at household level. The down sides are the initial investment being significantly larger than for a SHS, and the lack of ownership (“A communal system is owned by everybody and nobody.”) might be a barrier to proper care and maintenance of the system. It is pointed out that communal systems for local markets actually have enormous potential throughout Bangladesh. Another section where big potential is available is PV for rural health clinics, for lighting, storing medicines and vaccines, as there are said to be thousands of these clinics.19

7.4. RENDEV Project Workshop May 2008 A RENDEV project workshop was held in Dhaka with more than 30 participants representing donors, government institutions and Non Government Institutions. The financial, technical and policy issues of implementing solar technology in Bangladesh were discussed in open sessions;

19 Interview with RahimaFrooz and UNDP, May 2007, Dhaka, Bangladesh



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7.4.1. Financial The high upfront costs of the system are considered to be a major barrier to the development of solar technology, in particular the cost of batteries drives up the price of a system. However there is good potential for Solar Technology in Bangladesh due to the inadequate supply of electricity at present, particularly in rural areas, and the rising cost of kerosene. A weak infrastructure and limited number of suppliers is limiting growth in the SHS market and prices are consequently remaining high. By decreasing the down payment, increasing the payment period or decreasing the service charge SHS would become more accessible to the poor.

7.4.2. Technical Various solar technologies have already been implemented including LED based lamps and laturns, SHS and micro-utility systems. The main issues are that the price is too high and that the components are not available. Further research and development could result in new designs which reduce costs. A maintenance fund could also be instigated.

7.4.3. Policy A renewable energy policy has not yet been implemented in Bangladesh although it was developed in 1997. It is felt that the lack of renewable energy policy has the greatest negative impact on the poor. There is a need for a policy to ensure uniformity in price and quality control in Renewable Energy Technologies.

8. Other renewable energy applications

8.1. Wind energy Program by BPDB A wind profile survey program including the installation of wind measuring towers and a wind study ran in 2003-2004, supported by the national government. Bangladesh Power Development Board (BPDB) also installed 4 wind measuring towers at a height of 50 meters at Muhuri Dam (Feni district), Moghnama ghat (Cox-Bazar), Purki Saikat (Patenga) and Kuakata area. The speed and direction of wind is being measured by two anemometers in each place at a height of 30 and 50 meters respectively. A comparative and comprehensive study of the data available shows that there exist a satisfactory potential of installation of wind mills in Bangladesh. As part of a pilot project four wind energy systems of 225 kW each were recently installed at Muhuri Dam area (Feni district). The first tests show satisfactory performance of the mills. These machines were hooked up with nearby REB 11 KV feeder. Another project currently in the stage of tender evaluation is the “1000 KW Wind-Battery Hybrid Power Plant Project” at Kutubdia island.

8.2. Micro hydro In general the potential for micro hydro is considered to be fairly limited, due to the seasonal differences and most of the country being flat. There is some potential in the hill tracts area in the south east. Although micro hydro is clearly not on the priority list, a few pilot projects have been carried out in the past.



21

8.2.1. Borcol BPDB has completed a pilot project for a 50 kW mini hydro plant at Borcol water fall, Rangamati district.

8.2.2. Bamachora The 20 kWp mini hydro generating unit installed by LGED at Bamachora is a good example of harnessing energy in the country, which could be replicated in many locations in the Chittagong Hill Tracts of Bangladesh. The generated power will be used for a park under development at the location.

8.3. Biogas Biomass is widely used throughout Bangladesh, but improvements in terms of efficiency and sustainability are possible. The use of biogas offers a broad potential using multiple options and solutions. Currently biomass is mostly used for cooking purposes; use of gas is only at 3-4%. GTZ aims to stimulate the use of biogas for cooking needs. A biogas system would cost around 200 $ to 300 $ (6m3/ day). The barriers on a wider use of biogas include the current insufficient capacities and skills with regards to the use of biogas systems. Moreover donors are not fully convinced (yet) of the growth potential and sustainability of a large market (at least 50000 units). Some believe that Bangladesh should focus on biomass utilization for power generation as it provides a cost effective solution. 20

8.3.1. Biogas in Orphanage at Faridpur The pilot project called Muslim Mission was initiated by a private donor in a rehabilitation institute for orphans, currently consisting of around 600 children. The project consists of a poultry factory, currently of about 5000 birds and growing. Biogas is produced from poultry waste and used to generate electricity, covering 50% of the kitchen energy needs for cooking (the rest is from wood fuel). The residual slurry is dried, mixed with potassium and sold to farmers as fertiliser. This project is generally considered a success story, and might be replicable in similar institutions and organisations throughout Bangladesh.

8.3.2. Biomass gasifiers in rice mills - LGED LGED initiated in 2005 a project using two 250 kW Biomass Gasifiers from rice husks in Dinajpur and Sherpur. This project was one of the first initiatives in the biomass energy arena in Bangladesh and could offer a substantial replication potential with a fair percentage of equity participation by rice mill owners. Detailed experiences of the pilot project are not available.

20 Mr Erich Otto Gomm, RENDEV project workshop May 2008



22

Figure 8 Improved cook stove in Gazipur, north of Dhaka - Source: IT Power

9. Summary and conclusions This report has provided a detailed overview of the current status and the existing policy initiatives in Bangladesh. A key observation is the highly successful approach of the REREDP project ran by IDCOL, which can be regarded as an innovative step in applying micro finance for the purchase of solar housing systems. As this projects has been working extremely well thus far, and is expected to be expanded towards 2009, the RENDEV project should, instead of interfering with the risk of distorting the development of the solar market, focus on new initiatives and opportunities which address aspects not covered by the current design of the RERED project, e.g.:

• Targeting poorer households; currently lower middle class households install the SHS, but the poorest are still unable to afford it. The experiences of the pilot project which is currently being set up by BRAC and GTZ consisting of 425 SHS might offer interesting ideas on this front. Possible strategies to target poorer people could include;

o Offer smaller systems so the initial investment amount is reduced

o Provide higher grants/subsidies. Cross subsidies could make SHS more accessible to poor households.

o Link Solar Systems to income generation, for example installing solar systems in markets, schools, where extended working hours will be of benefit.

o GS believes the most appropriate strategy to reach rural poor with renewable energy technologies is to create green jobs for them. GS has a target to create 100,000 green jobs by 2015;



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o Recycling of used batteries.

• From household to community systems and/or mini-grids; the pilot 10 kWp central system in Rangamati show the potential, but also the hurdles of an increased use of larger communal systems throughout Bangladesh. Potential uses include electrification of local markets, rural clinics and schools, etc. On the other hand other pilots including from REB identified potential weaknesses in the communal approach, e.g. lack of ownership which leads to poor maintenance, lack of skilled staff and technical back up to closely monitor the system and a workable structure for the community to handle management and fee collection. For the latter the approach as used in Rangamati can be inspirational;

• Target Small and Medium sized Enterprises; aiming to link electrification through PV more closely to income generation. Potential areas of focus include agriculture and food processing, and a range of services at local markets;

• Developing a market driven approach; at present there are a limited number of suppliers and lack of experience in the solar technology market, resulting in high prices and required components are not always available or difficult to source. The tools which will be developed as part of the RENDEV project and their dissemination to the according target groups will stimulate the growth and maturing of this market.

The focus of the RENDEV activities should be to identify innovative and promising initiatives related to the above mentioned areas, and next to support, strengthen and possibly multiply these initiatives. A final step, wherever feasible within the time frame of the project, should be to incorporate the new findings and experiences into (new or existing) larger scale implementation plans, cf. REREDP.



24

10. References RENDEV Mission Report Bangladesh, Planet Finance, 25 May - 1 June 2007

Bangladesh Quarterly Economic Update, Asian Development Bank (ADB), March 2007

Bangladesh Country Environmental Analysis, World Bank, September 2006

Bangladesh, A National Strategy for Economic Growth, Poverty Reduction and Social Development, Government of People’s Republic of Bangladesh, December 2002, www.imf.org

Bangladesh Poverty Reduction Strategy Paper, Unlocking the Potential, National Strategy for Accelerated Poverty Reduction, Government of People’s Republic of Bangladesh, November 0205, www.imf.org

Bangladesh, Preparation of Poverty Reduction Strategy Paper: A Status Report, Government of Bangladesh, July 2004, www.imf.org

Grameen Shakti, www.grameen-info.org/grameen/gshakti/index.html

BRAC Foundation, www.brac.net/bracfoundation.htm

ASA Micro credit, www.asabd.org

Thengamara Mohila Sabuj Sangha (TMSS), www.tmss-bd.org

Infrastructure Development Company Limited (IDCOL), Bangladesh, www.idcol.org

Ministry of Energy and Mineral Resources, Power Cell, www.powercell.gov.bd

Energy&Power, Bangladesh, www.ep-bd.com, March 2007

Local Government Engineering Department (LGED) - www.lged.gov.bd

RENDEV Project Workshop May 2008 minutes



25

Annex1 Power Sector Structure in Bangladesh

BPDB: Bangladesh Power Development Board REB: Rural Electrification Board

Figure 9 Power Sector Structure in Bangladesh - June 2007 - Source: Power Cell



26

Annex2 Mission Report Bangladesh 25 May - 1 June 2007

Figure 10 RENDEV Project Team in Gazipur, May 2007 - Source: IT Power

RENDEV Project Mission Report – Bangladesh May 2007

INDEX 1 Mission Data....................................................................................................... 1 2 Mission Outcome............................................................................................... 1 3 People met.......................................................................................................... 1 4 Opportunities Detected ..................................................................................... 1 5 People or organizations to meet next time:..................................................... 1 6 Action plan ......................................................................................................... 1 7 Problems Encountered: .................................................................................... 1 8 Details of mission .............................................................................................. 1

8.1 Donors ......................................................................................................... 1 8.1.1 World Bank 1 8.1.2 GTZ 1 8.1.3 UNDP – United Nations Development Program 1 8.1.4 ADB – Asian Development Bank 1 8.1.5 Mission Economique – Ambassade de France 1 8.1.6 UE 1

8.2 Government organizations ........................................................................ 1 8.2.1 IDCOL - Infrastructure Development Company Ltd. - www.idcol.org 1 8.2.2 Bangladesh Power Development Board (BPDB) - www.bdbp.gov.bd 1 8.2.3 Local Government Engineering Department (LGED) - www.lged.gov.bd 1 8.2.4 Rural Electrification Board - www.reb.gov.bd 1 8.2.5 Ministry of Energy and Mineral Resources – Power Cell - www.powercell.gov.bd 1

8.3 Microfinance institutions MFI .................................................................... 1 8.3.1 Grameen Shakti - www.grameen-info.org/grameen/gshakti/index.html 1 8.3.2 BRAC – www.brac.net/bracfoundation.htm 1 8.3.3 ASA – www.asabd.org 1 8.3.4 AUP 1 8.3.5 TMSS - www.tmss-bd.org 1

8.4 RNE Companies.......................................................................................... 1 8.4.1 Energy System/Prakaushali Sangsad Ltd. 1 8.4.2 Rahimafrooz Renewable Energy Limited - www.rahimafrooz.com 1

8.5 Universities and R&D organizations ......................................................... 1 8.5.1 Renewable Energy Research Center- University of Dhaka, Bangladesh , 1


PlaNet Finance 28

1. Mission Data • Mission Location : Dhaka • Mission Dates : May 25th to June 1st, 2007 • Mission Staff :

Pascale Geslain, Laure Anquez, Philippe Gaeng - PlaNet Finance Mark Draeck - IT Power Ltd. Jean-Christian Marcel - Transénergie

2. Mission Outcome • Mission outcome 01 : Launch of Rendev project with the European partners and meet

the local partners to validate the engagement of the project

1. Mission outcome 02 : Present Rendev to the different Indonesian stakeholders 2. Mission outcome 03 : Identify the main RE projects, actors, constraints and

opportunities 3. Mission outcome 04: Identify new partnerships possible and local financial supports.

3. People met Organization Participants Position Contact

Sophie Clavelier-Khan Deputy Trade commissioner +880 (2) 882 27 51-4

Ambassade de France Dominique Simon Conseiller économique et commercial +880 (2) 882 27 51-4

AREVA T&D Dhruv Pant Country Director Bangladesh +88 (02) 881 5632 Selim Ahmed Chowdhury Director 8110934-5,9116375

ASA Md Shafiqual Haque Choudhury Executive Director +31 (24) 322 8223

Asian Development Bank AKM Firoz Procurement Officier +88 (02) 815 6000 AUP Muzibul Islam Faruque Executive Director 880 2 8836856

Sudip Kumar Saha Engineer 9881265 , 8824180 Brac Rob Choundhury Program coordinator 9881265 , 8824180_7

Md. Arham Uddin Siddique Rural Development Advisor 880 2 8823118

European Commission Charles Whiteley First Secretary 880 2 8824730 ,9888902 German Technical Cooperation Khaleq-uz-zaman Senior Aviser

+880 (2) 882 30 70 988 79 14

Dipal Barua Deputy Managing Director +880 (2) 811222 GRAMEEN Shakti Abser Kamal General Manager +880 (2) 9004314 GTZ Otto Gomm Programme Coordinator +880 (2) 882 30 70 / 511

IDCOL Fouzul Kabir Khan Executive Director and CEO 9112385 ,8111235, 9143157

Power Cell Mohammad Abdul Jalil Director General 880-2-9556040 Asma J. Huque Managing Director 880 2 9887356

Prokaushali Sangsad Ltd Hasna J. Khan Director 880-2-9887356

Nadia Afroz Rahim Manager - Marketing and Sales (88-02) 8832206-08

RAHIMAFROOZ Sazzad Hossain General Manager +880 (2) 8832206 8 Rural Electrification Board Md Abdur razzaque Director +8961549

Shakil Ahmed Programme Officier (880-2) 811 8600 UNDP Shireen Kamal Syaeed Assistant Contry Director (880-2) 811 8600

Md Iqbal Senior Energy Specialist 8159001-14 , 8159015-28 World Bank Raihan Elahi Senior Financial Analyst +88 (02) 8159001-28


PlaNet Finance 29

4. Opportunities Detected

• Name of

organization Partnership model

Level of

opportunity

Grameen Shakti

GS is the main actor in Bd on access to energy through REN. GS is the main partner of the project in Bd. GS will be involved on following activities: • Organization of a workshop in Indonesia in May 2008 • Adaptation of toolkits (review, translation & printing of toolkits) • Preparation of a film – Bangladesh part • Organization of a final conference in 2009 • Organization of a district workshop in 2008 • BDS As GS has outstanding experience in those activities, the team has to find a field in which GS will be really interested and where team can provide real added value. The will of GS, their high support to the project is one of the main conditions of success.

High

BRAC BRAC is the other big actor. They are very interested by the team. The question is how to work with BRAC while their main competitor is a partner.

Medium

TMSS

Side information told us TMSS is not that much involved in currents SHS projects. However, their big size, and community approach should be interesting to implement Minigrid projects. Contacts to be continued.

Medium

AUP AUP has not the organization to support the project. AUP will be invited to workshops.

Low

Mic

roFi

nanc

e In

stitu

tions

Ubomus Ubomus is the ONG ruled by PSL staff. They are very involved in solar projects. PSL will be one of the partner of the project so Ubomus will be one of our main support.

High

PSL PSL has a good experience in leading market assessment and feasibility surveys. PSL will be a partner of the project in charge of studies on the field for WP 2, WP 3 & WP 5.

High

Com

pani

es

RahimaFrooz

Rahimafrooz is the main private supplier of SHS and the only one supplying batteries. RF has a marketing department. RF was realy proactive to the team, and team thinks once RF should be a good technical partner. But RF is one of the main stakeholders so a partnership with them should have crated problems with other organizations and be a barrier to successful dissemination. Mr. Sazzat, RF General Manager will remain a good contact. RF should be a sponsor for printing toolkits.

High

Don

ors

GTZ

GTZ is highly involved on energy matters in Bd. Their main priority is reaching the poorest. Otto Gomm seems realy sympthic and opened to a close cooperation with the team. Further contacts will allow the project and GTZ to work together in order to be the most efficient.

High


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World Bank

WB was the first donor involved in SHS in Bd. The project was successful and WB don’t want the basics to change. The team has to communicate carefully with WB if we don’t want them to be a barrier. WB is looking forward on other energy issues so that like with GTZ, collaboration is possible and shall be really helpful.

High

UNDP UNDP has several projects and work closely with LGED. UNDP has mainly financed pilot projects and should be an appropriate donor for potential pilot projects.

Medium

ADB ADB is involved in large energy projects and don’t seem to be interested by our kind of projects. ADB will be whatever invited to all the workshop.

Low

IDCOL

People from IDCOL were all but not helpful and proactive during our meeting. Whatever, they are the main actor as the institution financing and monitoring all the projects. As the team has now established good relationships with other actors, a new relationship with IDCOL seems possible and team will do everything for it. Working closely with IDCOL, learning from their experience is one of the main conditions of success.

High

SEA This on-building agency will be in charge of all questions on REN and energy efficiency. At that time, it will become a key partner.

???

LGED LGED is a typical government agency; the renewable energy sector is fully supported by UNDP and GTZ. As they are a government agency, they will be invited and “involved” in all workshops.

Low

REB REB is a typical government agency. They have poor reputation as their projects are not successful. As they are a government agency, they will be invited and “involved” in all workshops.

Low

PDPB

BPDB is the authority for planning, construction and operation of power generation and transmission facilities throughout Bangladesh and for distribution in urban areas except Dhaka and its adjoining area. It has some activities in different renewable energy technologies, especially in wind energy.

Low

Gov

ernm

ent

PowerCell PowerCell is not directly concerned on Rural Electrification. They have huge priority on power supply to cities. Like other government organizations, they will be invited to workshops.

Low

Universities University of Dhaka

The team is really motivated and working on REN issues. They have published several reports and surveys on those issues in BD that will be really helpful for TRE and ITP. They will be invited to workshops.

Medium


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5. People or organizations to meet next time:

Organization Person to meet Contacts IDCOL Fouzul Kabir Khan 9112385 COAST Md. Ahsanul Karim 0171 332 8800 BUET Dr. MD Arif Hassan Mamun 9665650 80 ext 7204 GRAMEEN SHAKTI Abser Kamal +880 (2) 811222

6. Action plan

To do Who When Define partners in Indonesia: Pelangi or not? ITP w 23 Define partnership with Grameen Shakti Planet Finance w 24 Mid-JuneDefine all technical partnership in Bangladesh (to replace AUP)

All w 24 Mid-June

Prepare amendment to contract and the final partnership design (to see the consortium contract)

PlaNet Finance W 25

Prepare contract with each local partner All W 26 End-June

Prepare draft reports before first workshops in both countries

ITP & TRE September

Prepare workshops PlaNet Finance September Define fields for surveys in Bd

- community facilities - mini-grid - SSHS

All November

7. Problems Encountered: IDCOL and Powercell were not very motivated meeting the team. IDCOL has a lot of data but don’t want to give it.

IDCOL is the king pin of SHS projects and the only institution able to provide soft loans, so the team has to establish trust relationship with them.

MFIs are already involved in Solar Energy. Awareness on solar is high, so two of the main activities of the project are already done. We have to think how to do theses activities in a way useful for all the stakeholders and end-users.

We are not sure of the level of priority of the project for Grameen Shakti. We will have to look closely on their activities if we dn’t want GS branded toolkits which will not be useful for other smaller NGOs.


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8. Details of mission 8.1. Donors

8.1.1. World Bank

• Contacts Md Iqbaln – Senior Energy Analyst Raihan Elahi – Senior Financial analyst – Project leader on SHS programs

• Objectives Understand role of WB in SHS project Identify key factors of success and barriers

• Summary During the 90’s French project granted by AFD failed, WB analyses a need of ownership involvement SHS program in Sri Lanka i1998-2001 – Mr Elahi was involved Market studies launched in 2001 showed positive feasibility of SHS in Bd REB is only connecting households within 30 m of the existing grid and revenues criteria are so high than most of rural population was not elected to grid extension. 5000 SHS installed in Bd by that time Pilot program 200 SHS on field test in Bd financed by 5 MFIs among them Grameen Shakti and BRAC Analysis, barriers were:

- lack of awareness on solar energy by population - lack of financing capacities by MFI - training for installation and maintenance

WB provide response to the three fields: - grants to MFI to promote SHS - granted loan - grants for training

One project will be monitored by REB IDCOL will finance the other one WB monitored performance for 6 months then a 50 000 units by 2008 was set as target. Project was more than successful, update target is 200000. WB finance loans, GEF funded grants for the first 30000 SHS. Afterwards, KFW and GTZ were involved in the process, firstable they have their own project but after discussions with WB, they agreed to join the project and since them finance the grant instead of GEF. WB was frightened than arrival of a different system in a successful growing market will change the rules and may collapse the project. During the life of the project as awareness was growing up and estimated sufficient by MFIs, funds were reallocated in order to finance more SHS.

• Synthesis of visit Keys of success: Financial involvement of all the actors:

- 10% down payment by the user - 10 % own fundings by MFI - 80% by IDCOL

Every actor needs the success to sustain their own viability

Technical certification of material


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Ground presence by MFI in the whole country ensure a correct service to clients

MFI and NGOs are performing MFI are also providing other services so collection cost are lowered

One single system since a long time so the market is getting matured and clear for all the actors

Competition between MFIs ensure a good level of services

System is fully guaranteed during the whole paying period and guaranty extension is available so that consumers trust the technology and actors are looking for reliability and life expectancy. No study was led by WB on that success, no communication with eastern asia (another WB branch) ESMAP has studies on the project, BBC has broadcasted a report WB aims to launch a 2nd phase with isolated grid powered by PV in order to supply schools, hospitals, markets and community facilities. WB will be interested by survey on those fields WB feels SHS market as mature and is now looking ahead for a new step. New projects on biomass (rice boilers), pilot is launched should be disseminated in 2 to 3 years as soon as condition of success will be met. Until now, technology is not aware in BD (while India has 30 MW installed) and awareness of population is very low. WB is interested by investing on other REN issues as long as they are commercially viable, that means than private actors must inject equity in the project.

• Next steps Contact WB to find fields of study in BD Common dissemination Work together with WB and GTZ

8.1.2. GTZ

• Contacts Otto Gomm

• Objectives Prepare ground for collaborative work with GTZ, main donor on energy field in Bd.

• Summary GTZ is highly involved in Energy in Bd. They support WB on national policy making, they funds IDCOL for solar and other projects. KFW grant on RERED at 30 M$.

• Energy is Bd current main problem. Lack of power is huge, because of high demand and lack of regulation. Current priority is repairing power plants and adding capacity through small gas power plants within 2 years before larger plants (450 MW) will supply. Bd is working on an Energy Policy (government has to approve it within few months) the GTZ will help on elaborating a Strategic Action Plan for next 20 years. REN will be a part of that plan. PURE is the current program. Phase 2 called SED (sustainable energy development) will be:

- upsealing based on experience - issues on Energy efficiency focusing on enterprises


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• Actions: Biogas: IDCOL focus on households, GTZ on agrobusiness using rice waste to provide energy for commodities. Improved stoves: improve the install concept currently working on the field (project with BRAC). Cost is low: 600 TK and is really simple to implement.

• Synthesis of visit KFW will fund SHS program at extending 60 M$ for 120 000 more units.

• Subsidy policy Direct grant for user 30 $ Grant for MFI (training, promotion) 8 $ Refinancing 13 $

The subsidy is the same whatever the system is. There is no income condition on allocation of subsidy so that much of the clients which are “wealthy” profits of the subsidy.

• Condition of success High density of population so that a dense network of suppliers are able to reach the population on affordable cost. • New projects GTZ is principally working on a way to facilitate access to solar energy for the poorest: SSHS. GTZ is working on a financial model with IDCOL New LED lamps allows new opportunities:

20 Wp 2 CFL + 2 LEDs 12 000 Tk 10 Wp 1 CFL + 2 LEDs 9 000 Tk 7 Wp 1 moving lamp + CFL + LED ?

GTZ wants to work with suppliers to improve the products.

• Next steps An impact study is made by a German student via a thesis Work closely with GTZ to define the best fields of action for the project.

8.1.3. UNDP – United Nations Development Program

• Contacts Shalil Ahmed – P O Energy and Climate Change Shireen Kamal Sayeed – Assistant Country Director

• Summary UNDP runs an environment progam for 8 years mainly with LGED including several pilot projects. Results show that solar energy is the simpler to implement on a large scale. Solar Water pumping : UNDP provides installation, Communities deal with maintenance : successful in northern dry land. Wind: not successful, no data on wind in Bd and maintenance is a critical issue Biogas: success Energy efficiency: change engine of minitaxi to CNG In Bd, people, specially businessmen believe what they see, for example, UNDP convinces bricks fabrics to switch to a more efficient smokestack after a visit in China.


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• Synthesis of visit Next plans will focus on Rural energy ; GEF supports for onshore areas Projects: Develop dedicated cultures for biofuel Energy efficiency and conservative: GEF will develop standard for energy efficiency for equipment in China, Thailand, and Bd. Projects: Solar water heating for buildings Waste management to provide compost and generate electricity

• Next steps Invite UNDP to Workshops. UNDP shall be a donor for pilot MiniGrid projects.

8.1.4. ADB – Asian Development Bank

• Contacts Mr Rezaul Karim Khan Head Economic Unit Mr AKM Firoz

• Summary ADB focus on SME’s and is currently running big projects. On these projects, ADB provides loans and technical assistance provided under ADB advisors monitoring. On Energy side, ADB is promoting the expansion of the grid in Bangladesh and also construction of major power plants. ADB is estimating Bd needs at 600 M$ per year for coming 20 years for energy investments.

• Synthesis of visit ADB runs project with IDCOL but not on REN projects. ADB has some environmental projects such as Natural Gas Buses for Dakha.

• Next steps ADB will be invited to workshops but will not provide funds to the projects.

8.1.5. Mission Economique – Ambassade de France

• Contacts Dominique Simon – Chef de Mission Sophie Clavelier Khan

• Summary The Mission provides the team a very interesting overview of Bd economics and politics situation.

•


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• Synthesis of visit Bangladesh is growing quickly thanks to a liberal and opened economy. The private sector is very dynamic and quite efficient. The main problem of the country is lack of transparency and huge corruption so that the infrastructures are not following the growth despite efforts of International Donors. Power supply is among the main obstacles to sustain growth because of huge lacks in both production and distribution. The Mission advises the team to monitor the local partner very carefully.

• Next steps Mission will be involved in the workshops to support the organization of meetings and conferences.

8.1.6. UE

• Contacts Md Arham Uddir Siddique – Rural Dvt advisor Mr Charles Whitley – First Secretary

• Summary UE focus on primary education Other areas of intervention are environment and democracy promotion.

• Synthesis of visit UE stops supporting MicroFinance New programs in Asia are: Swith Asia wich aims to develop SMEs in sustainable energy consumption and production field and raise capacity of SMEs on environmental issues such as energy or waste. A project to develop SMEs in REN was led by Dr Bibuthi Roy, Bremen University, + 49 42 12 182 758

8.2. Government organizations

8.2.1. IDCOL - Infrastructure Development Company Ltd. - www.idcol.org

• Contacts Fouzul Kabir Kahn – CEO SM Monirul Islam – Deputy GM

• Objectives Understand who are the actors and their role in SHS project


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• Summary IDCOL's mission is to promote economic development in Bangladesh by encouraging private sector investment in infrastructure projects. Among them, IDCOL provides refinancing for small infrastructure projects (renewable energy) implemented by non-governmental organizations (NGOs)/microfinance institutions (MFIs) and other private entities. IDCOL provides grants and refinance, sets technical specification for solar equipment, develops publicity materials, provides training, and monitors Partners Organizations’ performance such as Grameen Shakti. IDCOL intended to provide both grant and refinancing to 50,000 solar home systems (SHS) over a period of five-and-half years [January 2003 - June 2008]. The target was achieved in August 2006, three years ahead of the project completion period and US $ 2.0 million below estimated project cost. Therefore, the target was revised to finance a total of 200,000 SHSs by the year 2009 with additional support from the World Bank, GTZ and KFW. Idcol is a government structure with the benefits of private sector: flex, transparency, and opened to all the players. IDCOL has defined criterias for selection then any MFI that meets the criteria, among them 3 years experience on the field, will be elected to the special loans. IDCOL is focusing on outputs, not studies.

• Synthesis of visit Solar systems are selected by a technical committee based on International certifications and field tests.

SHS Installed since 2002 :

134 000 Target for 2008 : 200000 (2008) + 200000 on negociation with donors

Grant by GEF First 15000 15000 to 35000 Up to 35000

90 $ 70 $ 30 $ + 8 $ for MFI

Interest rates provide to MFIs

6%

Interest rest on loans provide by WB

5 % Condition Max Wp price Max rate : 15%

Prices of Systems Fee for users 40 Wp 26000 Tk 40 Wp 50 Wp 28000 Tk 50 Wp 80 Wp 42000 Tk 80 Wp 100 Wp 47000 Tk 100 Wp

IDCOL is monitoring the system, they provide fundings to MFI only after IDCOL inspectors has checked that SHS has been installed; Inspectors visit MFIS once a week. The suppliers are selected by MFI, main battery supplier is Rahimafrooz, batteries are guaranteed 5 years. MFI are responsible for:

- installation - repayment of loans - services including maintenance

The success of then program is so impressive than WB wants to disseminate. Other countries including demand technical assistance from IDCOL. A project shall be launched in Philippines. IDCOL is involved in a plan to open module assembly plant.

• Next steps

IDCOL should be a partner for the project on dissemination. IDCOL is the key player, Pascale Geslain will meet them in July in order to promote the project and get a real support of IDCOL to the project.

8.2.2. Bangladesh Power Development Board (BPDB) - www.bdbp.gov.bd

• Contacts Engineer Safi


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• Summary BPDB is the authority for planning, construction and operation of power generation and transmission facilities throughout Bangladesh and for distribution in urban areas except Dhaka and its adjoining area.

- Total installed capacity of BDDP is 4995 MW. - The main fuel used for power generation is indigenous gas. - Total 13,000 Gwh gross energy was generated by BPDB while total 8,000 Gwh of energy was

purchased by BPDB from Independent Power Producers (IPP) in the private sector. - The transmission network of BPDB is 5976 km long comprising 230 and 132 KV lines. In FY 2003,

BPDB had about 24,500 employees of which 1,974 were of supervisory level. BPDB has installed SHS including 10 kWp centralized system to provide grid electricity to government offices and hospital.

• Synthesis of visit Renewable Energy Development & Energy Efficiency Measure of BPDB

Solar Energy

Bangladesh Government has taken a solar energy development programme in the Chittagong hill tracts area. These projects are being financed by the fund allocated from the hill tracts ministry. The project is constituted by 2(two) phases. The first phase has already been completed in Juraichhri area of Rangamati district. As many as 400 nos of solar panels have been installed there. Installation work of the 2nd phase has also been taken up in Thanchi Upozila of Rangamati district. About 400 nos of panel has been installed there within last 6 months. The total project includes, 600 Solar Home Systems of 120 Wp each, 20 sets Solar PV Street Light Systems of 75 Wp each, 2 set Solar PV Submersible Water Pumps of 50,000 liters per day lifting capacity of each pump of 1800 WP (15X120Wp) each, 6 Sets of Solar PV Vaccine Refrigerators for the Health Care Centers of 360 Wp(3X120Wp) each .1 Sets of 10 KW Centralized AC Market Electrification Systems for the electrification. Another Solar Electrification project is going on at Thanchi Upozila at Rangamati district. It consists 600 Sets Solar Home system of 120 Mp each, 2 Sets of Solar PV Vaccine Refrigerators for the Health Care Centers of 360 Wp(3X120Wp) each , 10 sets Solar PV Street Light Systems of 75 Wp each, 1 set Solar PV Submersible Water Pumps of 50,000 liters per day lifting capacity of each pump of 1800 WP(15X120Wp) each.

Wind Energy Program Taken Up By BPDB

Bangladesh government has taken up a project for installation of 8 x 225 KW wind mills in different places of coastal area. Before installation of wind mills a wind profile survey program was taken up in the financial year 2003-04. The source of fund was from GOB won resource. Although a fund of about 1.9 crore has been allocated by the government for the installation of wind measuring towers and wind study, no such fund was allocated for installation of wind mills. Bangladesh power Development Board has taken up a pilot project for installation of 4x225 KW wind energy power station at Muhuri Dam area of feni district from its own source of revenue fund. The machines have already been installed there. Provisional test run shows satisfactory performance of the mills. These machines were hooked up with nearby REB 11 KV feeder . 4 nos of wind measuring tower at a hight of 50 meters were installed at Muhuri Dam (feni), Moghnama ghat (Cox-bazar), Purki Saikat (Patenga) and Kuakata area. The speed and direction of wind is being measured by two anemometers in each place at a hight of 30 and 50 meters respectively. A comparative and comprehensive study of the data available shows that there exist a satisfactory potential of installation of wind mills in Bangladesh. A project has been taken from BPDB own fund at Kutubdia island named “1000 KW Wind-Battery Hybrid Power Plant Project”. Tender evaluation is under process for this project.

Micro hydro project

Some small potential of mini hydro power generation are available in hill tracts area of Bangladesh. At Borcol area of Rangamati district a 50 KW generator has been installed. No fund has yet been allocated from the government for this purpose. BPDB has completed a pilot project for installing 1x 50 KW mini hydro plant at Borcol water fall from its own revenue fund.

CFL (compact florescent lamp)


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Bangladesh government has allocated an amount of 1(one) crore taka from its own source of fund against greater Chittagong power distribution project. A comprehensive study on the requirement and capacity of the lamps was completed. According to the requirement 21000 nos of 23 watt and 3000 nos of 14 watt lamp have already been procured and installed.

Sugar Co-generation

There is a good prospect of sugar Co-generation power plant installation in 50 sugar mills in Bangaladesh. If government allows and allocate fund for feasibility study and there after installation of as many as 10-15 nos. of generator having 10-15 MW capacity each in the northern zone of Bangladesh. Where maximum numbers of bagasse could be available from the sugar mills. This type of generation will help minimizing the low voltage problem in the remote and national grid. Cost will also be economical compared to the cost of generation of electricity by using fuel oil.

8.2.3. Local Government Engineering Department (LGED) - www.lged.gov.bd

• Contacts Md Tazmilus Raham, project manager. [email protected] TEL +88 02 8119138

• Objectives To introduce the RENDEV project To understand their role in the renewable energy policy

• Summary The main functions of LGED are to provide technical support to the rural and the urban local government institutions (LGIs) and also planning and implementation of infrastructure development projects in the rural and urban areas to improve communication/transport network, employment generation and poverty reduction. LGED has a disseminated organization and offices in each of the different administrative level (Circles, Districts, Upazila/Thana) for infrastructure projects (bridges, roads...). The LGED division for renewable energy sources (RES) depends of the Ministry of local government of rural development. The division dealing with RES comprises 5 persons based in Dhaka; its budget is fully supported by the UNDP and GTZ. After the demonstration of some various projects they look for investors for business replications (see hereafter). The LGED RES seems not very occupied due to lack of budget waiting the new RES policy of the government.

• Synthesis of visit LGED was entrusted with the responsibility of handling the UNDP funded Sustainable Rural Energy (SRE) project under a 7-year programme of the Ministry of Environment & Forest called the Sustainable Environment Management Programme (SEMP) starting in 1998. The objective of the SRE project is to bring sustainable energy to the rural population of Bangladesh through a process of demonstration of a reasonable number of renewable energy technologies and in the process empower the rural poor, to the extent possible, towards sustainable livelihoods. This project provided a platform for the promotion of renewable energy at the field level for demonstration and local level awareness building. A good number of demonstration installations were initiated in this project, some of the significant ones being: 1. A 5 kWp SPV mini power house for a fishermen’s village in Chokoria, near Cox’s Bazar with distribution lines to individual households within a cluster in the village. This is a good example of distributed generation in a non-grid area where the local people have been trained to operate and maintain the system and do after sales service as and when required. The inhabitants pay for the power given and have themselves instituted penalty systems for any default in the monthly payment. It is a true example of collective efforts and a good example of how these small interventions can improve the quality of life of the marginalised people. Stakeholder interaction at the location revealed that considerable social benefits have been achieved consequent to the intervention. These are in the form of improvement in income from additional income generation activities in the evening hours, better education opportunities, better heath facilities, social harmony and many others. This is a good example to replicate in other similar locations in Bangladesh.


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2. A 1.8 kWp SPV centralised system for a rural market in Jenaidah provides lights to shops and commercial establishments in the evening hours. This is another example of distributed generation in off-grid areas for the benefit of the rural masses. The social impact of such interventions is seen from the extension of market hours into the late evening thus increasing rural economic activities, the security felt by the shop owners and shoppers, convenience of coming to market in the relatively cool hours of the evening by villagers in departure to their earlier habits, etc. This can be replicated in other remote areas. 3. A 10 kWp Solar Wind hybrid at St. Martin’s Island is a landmark initiative in the country towards introducing the latest in the hybrid technology which might be the vogue in the future. However, this being a one-off project, the economic viability of the same needs to be carefully understood prior to replication of such projects in other locations in the country. The initiative is providing power to a complex of the Forest Department on the island. 4. A 20 kWp Hydro generating unit at Bamachora is a good example of harnessing energy in the country, which could be replicated in many locations in the Chittagong Hill Tracts of Bangladesh. The power being generated will be used for a park under development at the location. 5. A total of 4 solar submersible pumping systems (4 X 1800Wp) are underway at Barendra area in Rajshahi complementing another SEMP project of the Barind Multipurpose Development Authority (BMDA). This will be completed within 2005. This will probably be the first introduction of solar pumping of water primarily for drinking water purposes for the village communities, definitely replicable in many other locations in Bangladesh. 6. Two 250 kW Biomass Gasifiers from rice husks in Dinajpur and Sherpur are to be made operational within 2005. Site surveys have been completed and implementation details are under finalization. This will be a unique first time initiative in the biomass energy arena in Bangladesh and perhaps the beginning of many such replications in the future as the projects are viable with a fair percentage of equity participation by rice mill owners.

• Next steps To keep in touch for future workshops, maybe they can help us for a field trip

8.2.4. Rural Electrification Board - www.reb.gov.bd

• Contacts Engr Abdur Razzak – Director Renewable Energies

• Objectives

• Summary Rural Electrification (REB) was created by the Government of Bangladesh (GOB) in 1977. The Board is a statutory Government organization responsible for implementing countrywide rural electrification. To achieve the objectives of rural electrification program at the implementation level, the Board established Palli Bidyut Samities (PBS) [which means Rural Electric Societies in English Language] based on the model of Rural Electric Co-operatives in USA under the universal principle of co-operative, democratic decentralization and ownership of consumers. A PBS, which owns, operates and manages a rural distribution system within its area of jurisdiction is an autonomous organization registered with REB. The member consumers participate in policy making of PBS through elected representative to the PBS governing body known as Board of Directors. REB is involved in Solar since early 90’s.


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• Synthesis of visit Solar energy is the most dedicated energy for remote areas isolated by the rivers. REB is running a SHS project under RERED like IDCOL. 6 cooperatives, 70 targeted, are running collective projects. It means that the SHS is installed on a household but that the user only pay monthly fees. Facts:

SHS Installed since 2002 :

3400

Target for 2008 : 12000 Grant by GEF 90 $ per SHS Interest rest on loans provide by WB

3 %

Prices of Systems Fee for users 40 Wp 26000 Tk 40 Wp 171 Tk + 5% Tax 50 Wp 28000 Tk 50 Wp 195 Tk 80 Wp 42000 Tk 80 Wp 291 Tk 100 Wp 47000 Tk 100 Wp 331 Tk

Users have to provide 6 months advance as guaranty. The project is facing huge problemes on maintenance, mainly on spare parts for light tubes.

• Next steps Organizing a mission to the hills area in order to look at PDBP 10kWp plant. Possibility of a comparative survey between benefits of both user-owned and cooperative projects.

8.2.5. Ministry of Energy and Mineral Resources – Power Cell - www.powercell.gov.bd

• Contacts Md Abdul Jalil – Director General

• Objectives Overall power policy for next decades. What about RNE?

• Summary Power Cell has been created by the government under Power Division, Ministry of Power, Energy & Mineral Resources under “TA for Implementation of Bangladesh power sector reform” project to carry forward the Power Sector reform activities of the government of Bangladesh. 7 people work there. Power Cell is the leader of The Sustainable Energy Programme (SEP) with UNDP. SEP is aimed at enhancing equitable access to appropriate, reliable and affordable renewable energy services to pours. PC is responsible on

- policy making and formulation - private sector power policy - tariffs studies - power purchase agreement


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• Synthesis of visit A company like IDCOl will be created in the next 3 months: Sustainable Energy Agency. The agency will lead all the activities in the REN and Energy Efficiency sector linking all the current organizations. No decisions have been taken in 5 years, now they will be. A plan is on building: Power system generation and transport expansion plan, the plan aims to supply all Bd people in 20 years. As the country is really flat, grid access should be everywhere but on remote areas in the eastern hills and on the islands.

• Next steps Powercell was not very helpful but their website is very complete.


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8.3. Microfinance institutions MFI

8.3.1. Grameen Shakti - www.grameen-info.org/grameen/gshakti/index.html

• Contacts Abser Kamal – General Manager

• Objectives

• Summary Grameen Bank was established in 1983 by an ordinance; however, it started its activities in 1976 as an experimental project. Later it expanded the operation by organizing people without assets and providing them credit support for income generation and capital and asset building. It is a specialized microfinance institution giving micro loans especially to women. At present GB works in 57000 villages with its countrywide 1658 branches and reach 5.3 million poor, 95 percent of whom are women. Grameen Shakti ( GS ), a member of the Grameen family was incorporated in 1996, as a not for profit company to promote, develop and popularize renewable energy technologies in remote, rural areas of Bangladesh. Grameen Shakti ( GS ) envisages a future where rural households of Bangladesh, would have access to environment friendly and pollution free energy at affordable costs. Up to June 2007, GS has installed 100,000 SHS and has an outstanding experience of Microfinance and Solar Energy. GS is installing 4000 SHS per month. Current GS market share is 62%.

• Synthesis of visit

GS management has an outstanding growing discourse. GS works like a big company with challenging objectives:

- 1,000,000 clients for SHS in 2015 - 10,000,000 clients on the different fields - 1000 offices - 5000 employees

Organization:

Staff on REN: 1500 on fields GS has : 300 unit offices + 39 regional offices + 30 technical centers .

Financial models

Monthly payments Down payment Loan length Interest cost

The most popular is 50 Wp during two years.

Maintenance

Free during the length of the loan (according to IDCOL rules), afterwards

Training

Collection rate

Promotion


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Clients

Guarantee

GS requires no guarantee; a special condition in the agreement forecast that in case of non-payment BRAC pick up the solar system from the consumer.

Competition

Competition is high between actors like in MF. Clients chose on price, quality of products and services provided. Big organization like BRAC and GS have good name on the field.

New projects

GS is developing biogas and improved cookers. An improvement cooker cost 700 TK and return time for clients is 6 months. According to Jean-Christian, improve cooker is a far better solution than solar cookers.

• Next steps

• GS will be the partner of the project on following activities: - Organization of a workshop in Indonesia in May 2008 - Adaptation of toolkits (review, translation & printing of toolkits) - Preparation of a film – Bangladesh part - Organization of a final conference in 2009 - Organization of a district workshop in 2008 - BDS

8.3.2. BRAC – www.brac.net/bracfoundation.htm

• Contacts Rob Choudhury - Program Coordinator Supid Kuman Saha - • Objectives

• Summary BRAC, established in 1972 as an NGO, started its microcredit program in 1990. Up to June 2005, a total amount of $2.28 billion has been disbursed as a microcredit to its 4.5 million targeted client’s beneficiaries (98 percent women) in 64 districts through 1373 branches, and the recovery rate is 99.63 percent. BRAC Solar Energy Programme for Sustainable Development was registered under BRAC Foundation, to work on the Renewable Energy Sector. BRAC has installed 25000 SHS as PO so far under the Electrification and Renewable Energy Development Project (REREDP). According to PSL, Solar is not a priority for BRAC explaining that GS has installed twice.


Organization:

Staff on REN: 5 in Dhakka, 400 on fields BRAC Foundation has : 260 unit offices + 59 districts office + 30 technical centers Key people are Project Organizers. POs have studied engineering. They are in charge of sales, installation, recovery, and maintenance. Brac Foundation utilizes BRAC facilities but not the staff.


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BRAC has one warehouse for spare parts in each district office.

Financial models

Monthly payments Down payment 15% of Total Cost Loan length 1 to 3 years Interest cost 12.5 %

The most popular is 50 Wp during two years.

Maintenance

Free during the length of the loan (according to IDCOL rules), afterwards, POs are supposed to check the installation during his collection tour.

Training

POs are trained on sales, loans and installation. Initial training is 3 days long. IDCOL and Rahimafrooz organize technical training while BRAC develop human skills. BRAC organizes also training in villages. POs train the consumer to utilize his equipment. POs run an economic estimation of the potential client’s willingness to pay.

Collection rate: 98 % like BRAC.

Promotion

Brac uses direct approach IDCOL has given subsidy for promotional material such as Tshirt, Poster and Meetings.

Clients

Clients of BRAC Foundation are not member of BRAC, they are too rich. Solar increases income activities to SME such as the grocery we visited on May 31st.

Guaranty

BRAC requires no guaranty, a special condition in the agreement forecast that in case of non-payment BRAC pick up the solar system from the consumer.

Competition

Competition is high between actors like in MF. Clients chose on price, quality of products and services provided. Big organization like BRAC and GS have good name on the field.

New projects

BRAC works with GTZ on a 425 SHS pilot program for poorest. They submit to IDCOL request for minigrids system to expand the project to poor rurals. They are looking for solar lantern from 3 to 5 Wp produced by Tata BP.

Visit on the field

SHS were well installed and working properly. The lighting is correct both in rooms of households and inside the grocery we have visited.

• Next steps Very good connections were established. BRAC bring us on the field to visit one SME and two rural houses. How to bring BRAC on the project while working with GS?

8.3.3. ASA – www.asabd.org

• Contacts Md Shafiqual Haque Choudhury, ¨president


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• Summary ASA, established in 1978, started its microfinance activity in 1991. ASA provides two types of loans: small loans and small business loans. Small loans are given to women whose monthly income does not exceed $31 and who possess less than 50 decimals of cumulative land. The initial business loan size is $62 to $93 and may increase by $16 to $31 per year. Its small business loan is usually given to men but women demonstrating competence in business are subjected too. ASA has links with Sri Lanka, Pakistan, Afghanistan, Nigeria and Indonesia. ASA has created CMI, Catalyst MicroFinance Investment to invest and provide assistance to foreign MFIs. ASA is close to Bina Swadaya, Indonesian partner of the project.

• Synthesis of visit ASA is not going in solar business because:

- they have not knowledge on technology - initial investment is too high - leght of loan is too long (max 1 or 2 years for AS, typically 5 for Solar Applications)

ASA is not willing to organize bill collect. For ASa, the modele is private investment on small grid projects.

8.3.4. AUP

• Contacts Muzibul Islam Faruque, Executive Director

• Objectives Advertise them they are not partner of the project.

• Summary AUP operates 7 offices in 3 districts. Total staff is 105. Since 1995 AUP is operating in three fields.

1. Education, AUP is a partner of BRAC on different projects 2. Microfinance with ASA. 5500 clients, average loan: 5000 Tk 3. Water sanitation

AUP is also a partner of Bd bank for housing loans

• Synthesis of visit AUP is not an appropriate partner for the project because they don’t cover a sufficient area.

• Next steps AUP is a dedicate target for the project. AUP will be invited to all the workshops in Bd.

8.3.5. TMSS - www.tmss-bd.org

• Objectives What are the difficulties of smaller actors?


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• Summary Thengamara Mohila Sabuj Sangha (TMSS) is a National non-government organization, which is working for poverty alleviation, Socio-Economic Development and empowerment of Women. Founded by the beggar women of Thengamara village of Bogra district in 1980. Until now 1.9 Million women were organized into groups within its operational area (throughout Bangladesh covering 62 districts) and helped to gain self-reliance through designing and implementing of innovative Projects. Women who are literate, having below 0.50 acres of land in the family are the beneficiary of TMSS. TMSS operates in most the fields related to the development of rural areas (Agriculture, Fisheries) and links it with Social Development objectives. So TMSS is a player in MicroFinance and acts in environment issues in those different fields:

- Utilization of natural resources/waste products for development among them SHS, biogas, organic fertiliser - Hazards reduction - Maintaining sound health - Freshness of mind

TMSS has a cooperative approach. Solar is not a priority for TMSS according to PSL. • Synthesis of visit Small organizations are facing difficulties to finance SHS as IDCOL cover only 80 % of the cost and that FMI has to finance 90 days from purchase of the material to IDCOL refunds. According to TMSS, cooperative actions succeed in Bd: communities are running water systems, or are in charge of maintaining of dikes in the southern areas. Such info should be investigated with Water Development Board. In those two cases, government pays for the infrastructure then village communities deals with all the services including maintenance. TMSS explained that villages are the most important entity in Bd life, and all the villagers work on some tasks together. It means that Minigrid should be successful if the community is involved in both: down payment of the project, collection, and service.

• Next steps TMSS is interested by PF services.


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8.4. RNE Companies

8.4.1. Energy System/Prakaushali Sangsad Ltd.

• Contacts Asma Huque – Director Hasna J Khan – Managing Director • Objectives Is PSL a potential partner?

• Summary Prokaushali Sangsad Limited (PSL) was established in July, 1969 as a consultancy firm with a view to bring together a group of engineers, architects, planners, economists and other professionals to offer services in developmental activities of Bangladesh. PSL is managed by two women, the only two we met on similar positions. PSL has already run several market studies on SHS. 1998: market assessment for World Bank then followed by feasibility study. 2001: Program design with WB. PSL has run the first training sessions for MFIs in BD. They have developed a women cooperative: Ubomus. Staff: PSL :22 Ubomus : 20 offices -> 65 people Ubomus works on the field as a Partenr Organization of IDCOL. Ubomus is very active on Solar. They also have specific projects with GTZ : 165 Wp generator to get computers for High School…

• Synthesis of visit Energy is not a profitable business for SMEs, it should only be a side activity. Loans from foreign countries are forbidden except for banks so that IDCOL is the only institution providing soft loans. Surveys on energy are their expertise.

Difficulties

Purchasing of SHS for small NGOs

- Lack of solar modules on the international market - Batteries: Rahimafrooz use to be the only supplier, newcomer RIMSO has low capacity (1000 /m vs demand

of 7000) and is not realy competing until now with RF.

Procurement price

NGOs supplying the whole kit pays it 10% more (like BRAC supplying from RF)

Cash flow:

MFIs have to finance 90 days of working capital (from procurement to IDCOL pays back) so that only big NGOs have the financial capacity to face the demand.

Training and capacity building

Trainings organized by IDCOL are not sufficient No workshop on policy making has been organized by IDCOL.

Quality of services

Solar program is a core program of some NGOs, in that case the program is successful and the service good. For others, among them TMSS, solar is a side program and service to client is not so good.

Quality of products

Procurement Unit Office Installation IDCOL’s payback

90 days +


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CC made in Bd or India are not that good compare to those manufactured in Japan, Germany or France.

Environment issues

An agreement with suppliers on batteries recycling has to be signed.

Other projects

KFW is providing 1,5 M$ for pilot projects on energy. GTZ supports biogas plant. Biogas plant cost around 200 $ to 300 $ for cooking needs. (6m3/ day) There is a skill issue on Biogas. They have to convince donors to create a sustainable market (50 000 units).

• Next steps Develop partnership on surveys. TRE and ITP to prepare MOU.


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8.4.2. Rahimafrooz Renewable Energy Limited - ww.rahimafrooz.com

• Contacts Engr Shah Md Sazzad Hussain, GM

• Objectives Know the companies involve in RNE business

• Summary Rahimafrooz is a diversified company operating in areas from distribution, RahimaFrooz SuperStores to Internet. Rahimafrooz core product are batteries, so that RahimaFrooz develops a dedicate Solar Range of batteries for SHS. Moreover Rahimafrooz has created Rahimafrooz Energy Services Limited, a power services company. Rahimafrooz is providing SHS to 10 on 15 partners of IDCOL.


Products

Rahimafrooz has develop a special SHS range - 40 Wp, 2 lamps - 50 Wp, 3 lamps - 65 Wp, 4 lamps - 75 Wp, 5 lamps + BW TV

Most of users have middle income to offer their family SHS. RF is producing everything but the module, ie batteries, Charge Controller, lamps and cables in a single box.

Training

RF trains and capacity builds MFI teams on SHS system, installation, maintenance and sales. They monitor 100 SHS to follow the lifecycle of the product and be sure that MFI are providing good services to users. Actually, RF offers 5 SHS to each new MFI offices for training MFI staff. RF also trains MFI trainees for end users on maintenance and usage of SHS.

Finance

RF also provides credits to MFI among them BRAC and TMSS.

RF allows client short term credit (60 to 90 days) to MFI at 5% in order for them to install the system before IDCOL allocates grant and special credits.

Abroad

RF is involved as well on Nepal’s Danida program and on new Philippine program scheduled by World Bank. RF has connection with other countries but not in Indonesia.

Other projects

IDCOL

MFI End User Rahimafrooz

Procurement + Credit

60 to 90 d, 5%Installs and

provide credit

Down payment

Declare installations monthly

Inspects monthly then provide grant and soft loans

Payback


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They have also installed a 10 KWp plant for BPDB. This plant is supplying 135 shops. A board of beneficiaries of 5 other the 200 is in charge of collecting the bills. RF says it works pretty well.

• Next steps RF should have been a interesting partner, but there position as monopolistic supplier on batteries is a high barrier. RF is very proactive on the project. RF has organized a visit on the field they should be very helpful to access to IDCOL or other gvt organizations so we will keep on with that good relationship.


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8.5. Universities and R&D organizations

8.5.1. Renewable Energy Research Center- University of Dhaka, Bangladesh

• Contacts Dr. NC Bhownick – Director Dr Muhtasham Hussain – President of Bangladesh Solar Society • Summary Team is working on solar since early 80’s. They have test benches (most of them pretty olds) but little money. RERC has led very detailed studies on RNE and specially solar, latest in 2006. They are also interested in thermal, grid connected solar (first plant in Bd, 1,1 kWp) and wind. Courses on RNE are part of master’s degree electronic engineering courses. No partners abroad except TERI and New Delhi in India. Very sympathic team and proactive but they definitely lack funds. • Synthesis of visit They are interested by LED but don’t have the funds to launch research. The other main research team on RNE is led by BUET (BUET is supposed to be Bd top university) No impact study was made so far.

• Next steps Invite them to Workshops in example for renewable energy introduction in Bangladesh. Try to connect them to European universities.

Policy review - Bangladesh

Documents

Transcript of Policy review - Bangladesh