Terminal Evaluation of Development of Sustainable Renewable Energy Power Generation (SREPGEN) Project

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Evaluation Plan:
2017-2021, Bangladesh
Evaluation Type:
Final Project
Planned End Date:
03/2021
Completion Date:
03/2021
Status:
Completed
Management Response:
Yes
Evaluation Budget(US $):
40,000

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Title Terminal Evaluation of Development of Sustainable Renewable Energy Power Generation (SREPGEN) Project
Atlas Project Number: 00073939
Evaluation Plan: 2017-2021, Bangladesh
Evaluation Type: Final Project
Status: Completed
Completion Date: 03/2021
Planned End Date: 03/2021
Management Response: Yes
UNDP Signature Solution:
  • 1. Sustainable
Corporate Outcome and Output (UNDP Strategic Plan 2018-2021)
  • 1. Output 1.5.1 Solutions adopted to achieve universal access to clean, affordable and sustainable energy
SDG Goal
  • Goal 12. Ensure sustainable consumption and production patterns
  • Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all
SDG Target
  • 12.2 By 2030, achieve the sustainable management and efficient use of natural resources
  • 12.a Support developing countries to strengthen their scientific and technological capacity to move towards more sustainable patterns of consumption and production
  • 7.a By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology
Evaluation Budget(US $): 40,000
Source of Funding: Project budget (GEF-funded)
Evaluation Expenditure(US $): 35,000
Joint Programme: No
Joint Evaluation: No
Evaluation Team members:
Name Title Email Nationality
Siddique Zobair National evaluator
Kris B. Prasada Rao International evaluator
GEF Evaluation: Yes
GEF Project Title: Development of Sustainable Renewable Energy Power Generation
Evaluation Type: Terminal Evaluation
Focal Area: Climate Change
Project Type: FSP
GEF Phase: GEF-5
GEF Project ID: 4459
PIMS Number: 3948
Key Stakeholders:
Countries: BANGLADESH
Lessons
1.

RE project designs should not be overly prescriptive in terms of RE technol-ogy or systems, as the RE sector is rapidly evolving so projects should be able to re-spond to the available options and changes in demands.


2.

When the process from design to implementation takes a long time, stock-taking of contextual changes and the potential need for project revision should be car-ried out during the inception phase.


3.

When significant changes are made to the RE activities on the ground, an en-vironmental and social screening should be carried out, even if the screening at design found the project to be low risk.


4.

The energy needs of men and women are not the same, so RE project de-signs and implementation should include concrete gender strategies and gender dis-aggregated indicators and targets.


5.

Indicators and targets at the outcome/component level should be realistic and attributable to project interventions, and indicators at objective and outcome lev-els should not overlap.


6.

Socio-economic/livelihoods indicators should be included for sub-projects and pilot projects, to enable assessment of the impact of the RE investment made.


7.

It can be difficult to engage the private sector in testing of RE solutions, due to the perceived risk, but it is important to workout models that are viable for engag-ing the private sector in piloting to facilitate an interest from the private sector in fur-ther investing in upscaling and replication.


Findings
1.

SREPGen was prior to 2018 affected by major delays, slow progress and low budget exe-cution due to a lengthy GoB project document approval process, slow recruitment of the National Project Manager, and an overly prescriptive focus on solar lanterns (PVSLs), which was overtaken by rapid grid expansion, reduced costs of RE systems, and free dis-tribution of solar home systems. Hence, there was only little demand for PVSLs. The pro-ject design was revised and project implementation picked up in 2018 but slowed down again in 2020 due to the COVID-19 pandemic. By the end of the project, 98 percent of the budget had been executed. One out of two objective targets and most outcome tar-gets were reached or exceeded, but not always entirely as a result of SREPGen. How-ever, some targets were highly overambitious and beyond what SREPGen could be ex-pected to deliver.


2.

Some significant contributions were made towards creating an enabling environment for increased renewable energy (RE) investments, in paqrticular the Net Metering Guidelines, which laid the economic foundation for grid integration of RE systems, which can be considered a catalytic contribution from SREPGen and the GEF with early evi-dence of increased investment in rooftop PV systems. Moreover, the National Solar En-ergy Road Map 2021-2041 contributed to the integration of RE in the Perspective Plan 2020-30 and the draft 8th Five Year Plan. SREPGen also contributed significantly to an enhanced capacity of SREDA, which now proactively engages in facilitating RE projects and the improved access to RE data.


3.

The on-the-ground sub-projects providing access to RE under component 3 and demon-stration pilot projects under component 4 provided energy to poor and remote off-grid communities and vulnerable people, including indigenous peoples in the Chittagong Hill Tracts, small-scale fishing communities on islands, female-headed households, and peo-ple living with disabilities. SRPEGen met its target number of households provided with electricity. The access to electricity led to a number of livelihoods improvements, such as new and improved income opportunities, increased agricultural productivity, and im-proved education.


4.

The sub-projects and pilot projects were intended to demonstrate commercially viable RE solutions for the private sector. To this end, and to ensure sustainability, the project applied blended financing, combining the GEF grant with loans and/or equity. However, the private financial investment was much lower than expected and the participation of the private sector from a commercial perspective was limited to two sub-projects, while many sub-projects and pilot projects were implemented with not-for-profit partners, in-cluding small NGOs and CSOs, social enterprises, a government-owned financing institu-tion, and a private company CSR investment. The reasons for this appear to include the remoteness and limited (or perceived limited) scope for commercial investments in some locations, and a perception that investment would be risky even with a 50 percent grant. Since many sub-projects and pilot projects were not implemented from a fully commercial perspective and loan financing was concessional, they did not fully demonstrate the business potential and may thus not appear fully convincing for private com-panies. So far, there is little evidence of replication of the sub-projects and pilot pro-jects, which could also in part be due to many sub-projects and pilot projects having been implemented recently and the COVID-19 pandemic.


5.

The implementation of SREPGen was led by national stakeholdersm and SREDA was pro-actively engaged in the implementation and coordination with other initiatives support-ing SREDA. However, grants and procurement were mostly handled by UNDP. IDCOL played a major role in the identification of implementing partners for the sub-projects. Implementing partners invested their own financial resources in the sub-projects and thus had a direct economic interest in them. Beneficiaries made an in-kind contribution, which in some cases was substantial.


6.

SREDA has evolved significantly, but still needs further support for consolidation. There are still development partners working with SREDA, including UNDP-GEF through the upcoming LCUD project, so it seems likely that the capacity and policy results of SREPGen will be further consolidated and sustained. However, it is unclear whether there will be support for SREDA in the development of commercially viable RE solutions for remote rural areas. The sub-projects were planned to be commercially viable and de-signed to fully recover operation and maintenance costs from the electricity tariffs paid by the users/customers and the tariffs appear affordable for the beneficiaries.


7.

No negative environmental or social impacts were identified by the terminal evaluation. The project had been duly screened at design and found to be of low environmental im-pact, but while the revision of the design led to a significant shift in the RE technologies promoted under the sub-projects and pilot projects, no follow-up screening was carried out. Nonetheless, the sub-projects that were co-financed by IDCOL were subject to envi-ronmental and social screening as per IDCOL procedures. While some sub-projects pro-vided positive benefits for women and one sub-project was implemented by a woman enterprise, the project design did not include measures vis-à-vis gender inclusion and empowerment of women.


Recommendations
1

Private sector involvement

  • Analyse commercial and financial viability of the different sub-projects and pilot projects and identify potential areas of improvement vis-à-vis commercialisation of similar projects in the future.
  • Engage in dialogue with the private sector to understand how a) the private sector can be atterrated to engage in future piloting, and b) how sub-projects and pilot projects can undertake demonstration that is relevant for the private sector.
  • Assess how approaches from successful private sector development projects can be adapted to RE sector projects.
2

Upscaling and replication

Engage in dialogue with other development partners on how they can be mobilized to a) replicate the experiences and lessons from SREPGen sub-projects and pilot projects, and b) support SREDA and IDCOL vis-à-vis rural RE.

3

Analyzing pilot project impacts

  • Carry out impact studies on the livelihood benefits achieved by the sub-projects and pilot projects.
  • Carry out ex-post environmental and social impact (positive and negative) assessments of the sub-projects and pilot projects.
1. Recommendation:

Private sector involvement

  • Analyse commercial and financial viability of the different sub-projects and pilot projects and identify potential areas of improvement vis-à-vis commercialisation of similar projects in the future.
  • Engage in dialogue with the private sector to understand how a) the private sector can be atterrated to engage in future piloting, and b) how sub-projects and pilot projects can undertake demonstration that is relevant for the private sector.
  • Assess how approaches from successful private sector development projects can be adapted to RE sector projects.
Management Response: [Added: 2021/04/05] [Last Updated: 2021/04/05]

Partially Agreed

  • The SREPGen project has piloted/implemented five sub-projects; (i) Solar-diesel (-wind) hybrid mini-grid in an off-grid island (Two: 281 kW and 218 kW) (ii) 23 Solar irrigation pumps (SIP) (including one with Grid Integration), (iii) Off-grid solar ice-making plant (91 kW), (iv) Pico-hydropower plant (20kW at remote Thanchi hilly area), and (v) Solar charging stations (two with 25 kW each). These six sub-projects are running well commercially and have been implemented through either a private sector or a non-profit CSO. Scaling up some of these successful pilots has been initiated, even without grant financing. Moreover, ADB and World Bank are also upscaling these models. A blended financing modality has been adopted for all of these sub-projects. This blended financing includes grant + loan + equity portion where “50% grant + 30% loan + 20%” equity ratio has been used in three sub-projects (Minigrid, SIP, and Solar Charging stations and “50% grant + 50% equity” ratio has been used for Pico-Hydro and Solar Ice Making Plant sub-projects. IDCOL has mainly played a key role in analyzing the business case of these sub-projects and provided a loan portion to most of these sub-projects. Business models for all of these sub-projects seem successful and still viable commercially. Viability grant financing from the project was one of the main reasons for successfully implementing these projects. However, RE technology is becoming cheaper in recent times. Government support is being extended increasingly, which requires further analysis to find a more market-based instrument to make it a viable business model. Commercial and financial viability, technological and environmental sustainability are the main issues, which need to be analyzed further so that potential areas of improvement for commercialization of similar projects in the future can be identified. One of the pilots includes “Grid Integration of Solar Irrigation Pumps,” which has identified some challenges to scale-up the SIPs with grid connections. Energy Net Metering Guideline has recently been adopted by the government, which the SREPGen project has supported. This will allow private sectors to implement SIPs without grants, and World Bank, ADB, KfW, and other development partners supporting concessional credits to scale up these pumps.

 

  • The project conducted a series of dialogues with the private sectors and followed the procedure developed by IDCOL in selecting the private sectors to implement these sub-projects. The selected private sectors/CSOs are UPOKULIO BIDDUTAYAN O MOHILA UNNAYAN SAMITY (UBOMUS-Coastal Electrification and Women Development Committee), Bright Green Energy Foundation (BGEF), Western Renewable Energy (Pvt.) Ltd; Bandarban Disabled Peoples’ Organization to Development (Bandarban DPOD), Western Renewable Energy Limited, and Bengal Solar. These sub-projects have already been considered for scaling up by the private sectors in a similar context. It has already made a significant impact propelled by demonstration effects. For example, the government and IDCOL have set a target to install 2000 more SIPs by 2025, Chittagong Hill-Tract Board has adopted a pico-hydro system in their plan, Solar-Ice making Plant will be replicated in similar islands by other CSOs, future SIPs will be considered for grid integration by IDCOL, and the solar-wind-diesel hybrid system will be followed in installing mini-grids by the government in off-grid islands.

 

  • The project has drafted the National Solar Energy Road Map: 2021-2041, highlighting the importance of engaging the private sector in future piloting/scaling up investments. All five sub-projects above also engaged the private sector to make a viable business model promoting and scaling RE. As mentioned before, all of these pilots have been implemented through the private sector, where the private companies have invested their equity portion and own the project. The Net Energy Metering Training was organized for 500 engineers of 6 electricity distribution utilities and 75 teachers of technical Universities and Polytechnic Institutes, which will promote roof-top solar plants nation-wide to be implemented by the private sectors. Among these participants, 10% came from the private sector as well. Three workshops have been arranged for private sectors to familiarize the Energy Net Metering guidelines and its business case. SREDA has published a business analysis to show the commercial viability of the roof-top solar system under this net metering guideline. The project has also conducted an assessment study as part of an exit strategy of the project. That study also assessed the sustainability of the success of the sub-projects and recommended some actions. The project has demonstrated good practices to achieve sustainable growth in the renewable energy share of the power generation mix and the GoB’s vision of universal access to energy by 2021. The project is particularly successful in getting the government's commitment to aggressively pursue Renewable Energy power generation in the coming years, which has been evident in the recently approved Perspective Plan 2041 and the draft Eighth Five Year Plan. In these critical national documents, the government has committed to producing a significant amount of electricity from renewable sources and following the green growth strategy path. It will help achieve SDG 12: Sustainable Consumption and Production.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Continuous analysis of commercial and financial viability of the various sub-projects and pilot projects and identify potential areas of improvement vis-à-vis commercialization of similar projects in the future
[Added: 2021/04/05]
SREDA/IDCOL 2021/12 Initiated IDCOL, as a non-banking financial institute, is continuously assessing the market potential of RE technology. SREDA is also conducting such assessments regularly.
In-depth assessment of scaling-up potential of successful pilots of SREPGen
[Added: 2021/04/05]
SREDA/IDCOL 2021/12 Initiated IDCOL and SREDA are continuously monitoring the sub-project operation and making cases for scaling up.
Continuous engagement in dialogue with the private sector to understand how a) the private sector can be attracted to engage in future piloting and b) how sub-projects and pilot projects can undertake demonstration relevant to the private sector
[Added: 2021/04/05]
SREDA/ IDCOL/ UNDP/ GIZ 2021/12 Initiated SREDA and IDCOL with the support from UNDP and GIZ may take the lead in this regard.
2. Recommendation:

Upscaling and replication

Engage in dialogue with other development partners on how they can be mobilized to a) replicate the experiences and lessons from SREPGen sub-projects and pilot projects, and b) support SREDA and IDCOL vis-à-vis rural RE.

Management Response: [Added: 2021/04/05]

Agreed.

The project has already made a breakthrough, pointing out how and where investments and policy measures should focus on energy transitions, strengthening economic recovery, and bolster sustainable development beyond the project period. The national RE resource assessment (Solar and biomass) has made the starting point for investment. The successful implementation of innovative Renewable Energy Technology (RET) Solutions through the pilots has increased direct access to electricity for the low-income marginalized people and brought investors to scale those up and replicate them. Other development partners have already devised their strategy to bolster the RE sector in Bangladesh based on the pilots and studies implemented/conducted by the project. Solar Action Plan 2041 has made a significant impact among all concerns. This Solar Action Plan 2041 has been presented as a keynote in more than ten national conferences and has been adopted in the recently approved 8th Five Year Plan of the government. This will guide all concerns, including development partners, in building on SREPGen’s pilots and studies. The GIZ, World Bank, USAID, and ADB are at the forefront of this regard as they partner with IDCOL and other financial institutes to provide concessional credits to the private sector for scaling up successful pilots. GIZ has already assumed the responsibility of maintaining the Solar Irradiation Monitoring station installed by SREPGen and has prepared a program to support roof-top solar under the energy net-metering system. Solar Charging Station has also gained a new boost with a technological breakthrough in storage systems like lithium-ion batteries and is further analyzed by GIZ. WB, ADB, and USAID are also supporting SIP and its grid integration.   

 

The project supported the finalization of the Net Energy Metering Guideline & Handbook and provided training to 500+ Engineers and Teachers: Net energy metering (NEM) is allowing prosumers (producer + consumer) to connect their renewable energy systems to the distribution grid. The mechanism provides for the export of energy (e.g., electricity) generated from distributed renewable energy sources in exchange for credits in the form of energy or money. This method of sharing energy is often termed as ‘Energy Banking.’ It is popularizing RE (Renewable Energy) based rooftop or grid-tie systems in the country. At least 600 MW of the prospective capacity will be installed by the end of2022 using the net metering system. Until now, IDCOL has approved 20 projects (18.31 MWp) under this system.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Continuously engage in dialogue with other development partners, commercial banks, and IFIs on how additional investment can be mobilized to a) replicate the experiences and lessons from SREPGen sub-projects and pilot projects, and b) support SREDA IDCOL vis-à-vis rural RE.
[Added: 2021/04/05]
SREDA/UNDP 2022/12 Initiated UNDP has started bilateral discussions with DPs and plans to discuss this through LCG Energy and LCG-Environment and Climate Change and in a larger platform.
3. Recommendation:

Analyzing pilot project impacts

  • Carry out impact studies on the livelihood benefits achieved by the sub-projects and pilot projects.
  • Carry out ex-post environmental and social impact (positive and negative) assessments of the sub-projects and pilot projects.
Management Response: [Added: 2021/04/05]

Agreed.

  • Carry out economic and financial analysis of the IRR, payback period, and net present value (NPV) to better understand the investment returns
  • Small scale immediate impact assessments have already been conducted by the project for some of its sub-projects. However, an impact study after at least one year of operation would give a better understanding.
  • Ex-ante environmental and social impact (positive and negative) assessments of the sub-projects and pilot projects have been conducted before implementation. An ex-post assessment after at least one year of operation is recommended.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Conduct Impact assessments of the sub-projects of SREPGen
[Added: 2021/04/05]
SREDA/UNDP 2022/06 Not Initiated UNDP may conduct this assessment through its upcoming projects in the locations of sub-projects.
Conduct ex-post environmental and social impact (positive and negative) assessments of the sub-projects and pilot projects
[Added: 2021/04/05]
SREDA/UNDP 2022/06 Not Initiated UNDP and IDCOL will jointly conduct social and environmental impacts assessment of the project next year and will come up with a social and environmental management plan that will be implemented together by community groups and SREDA/power division.

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