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Terminal Evaluation of Development of Sustainable Renewable Energy Power Generation (SREPGEN) Project
Commissioning Unit: Bangladesh
Evaluation Plan: 2017-2021
Evaluation Type: Project
Completion Date: 03/2021
Unit Responsible for providing Management Response: Bangladesh
Documents Related to overall Management Response:
 
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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