Friday, April 11, 2008
Tuesday, April 8, 2008
CDM Report in EarthPlatform
www.earthplatform.com/cdm/projects?Terms=cdm%20projects%20host:uneprisoe.org
CDM Report in EarthPlatform
UNEP Video in Solar Videos web-site
http://la-homehunter.com/solar_vid/video-theme/26/solar+energy.html
UNEP Video in Solar Videos web-site
References in UNEP Report on Risk-mitigation, on Crestar
sefi.unep.org/fileadmin/media/sefi/docs/publications/SSRE_UNEP_Report_August07.pdf
References in UNEP Report on Risk-mitigation, on Crestar
Crestar reference in India Foundation web-site
http://www.indiafirstfoundation.org/Awards/awards_m.htm#ard12
Crestar reference in India Foundation web-site
Crestar reference in India Foundation web-site
Technologies for Sustainable Energy Development in the Long Term
www.risoe.dk/rispubl/SYS/syspdf/energconf05/Session17_painuly.pdf
Monday, April 7, 2008
URC wins Energy Globe Award
www.uneprisoe.org/IndiaSolar/EneryGlobeAward.htm
India Solar Home Systems Project wins Energy Globe Award
UNEP Risoe Centre was awarded the 2007 Energy Globe Fire Award for launching the India Solar Home Systems Project. Jyoti Painuly, URC manager of the Project, received the award on behalf on the Project partners.
"The Energy Globe is awarded to projects from all over the world which make careful and economical use of resources and employ alternative energy sources."
Launched in 2003 with support from the UN Foundation and Shell Foundation, the Project is a partnership between UNEP, UNEP Risoe Centre, and two India large banking groups, Canara and Syndicate Bank. Local project management is provided by Crestar Capital, Mumbai.
The purpose of the Project was to establish a consumer credit market for financing solar home systems (SHS) in Southern India. The innovative financing arrangement involved an interest rate reduction, a direct support system to develop the market and a process to qualify suppliers. The Project however does not provide a subsidy on the high capital cost of solar home systems.
Nearly 18,000 middle class households in Southern India have used the Project's innovative credit to buy a solar photovoltaic system to power lights and small appliances.
Video of award ceremony (Windows media video)
38 kbps (for dial-up lines)150 kbps (for DSL lines)
For further information contact:
Jyoti P. Painuly, j.p.painuly@risoe.dk
American Solar Energy Society - CD on HVK' Presentation at Solar World Congress
http://www.asespubs.org/index.asp?PageAction=VIEWPROD&ProdID=55
American Solar Energy Society - CD on HVK' Presentation at Solar World Congress
Creating Markets for Solar Energy Services in Developing Countries Forum
This forum features energy project implementation activities in Africa, India, Brazil and China. The presenters share innovative ways to significantly increase markets for solar energy technologies.
Moderator: Duncan Marsh, Climate and Energy Program, United Nations Foundation, describes the goal of the UNF energy work and discusses the inspiring successes of the implementation activities.
Presenters: H.V. Kumar, Lawrence Agbemabiese, Suzanne Maia, Li Junfeng. Each presenter summarizes the activities in their part of the world and highlights how the economic innovations have advanced renewable energy development in their regions and throughout the world.
Approximate run time: 90 minutes
Produced by Aspen Hill Films
SciDev Article
http://www.scidev.net/en/news/indian-loan-project-gives-solar-energy-to-rural-po.html
SciDev Article
Indian loan project gives solar energy to rural poor
Maryke Steffens
30 April 2007 EN
Small loans let poor people buy solar panels
NREL / West Bengal Renewable Energy Development Agency
A UN project in India has given thousands of people in rural areas access to reliable electricity by enabling them to take out small loans to purchase solar panels.
The project, launched by the UN Environment Programme (UNEP) in 2003 in the southern Indian state of Karnataka, facilitated over 18,000 loans for solar panels over three years.
A report on the project will be presented at the UN Commission on Sustainable Development, meeting this week (30 April) in New York, United States.
The sunlight-powered systems offer a reliable source of clean energy.
"When this project started, about 70 per cent of people in rural India had no access to electricity," says Jyoti Painuly, senior energy planner at the UNEP Risoe Centre on Energy, Climate and Sustainable Development in Denmark, which helped implement the project.
At the time there were no credit sales, so the solar panels — already available in India for US$300-500 — were too expensive for most people.
"The people who needed the solar panels the most didn't have access to the finance," says Painuly.
UNEP recruited two popular banks to take part in the project as part of their 'priority sector lending' obligation — a government directive requiring Indian banks to give a percentage of their loans to people in rural areas.
To attract borrowers, UNEP negotiated an extension of the loan period from three to five years, decreasing the size of monthly repayments.
The banks agreed to accept a smaller initial deposit and a two per cent cut in interest rates, compared to standard loans. At the start of the project, UNEP also subsidised the loans to further decrease interest rates.
After three years, the project had increased credit loans for solar panels from 1,400 to 18,000, with few loan defaults.
Following the project's success, banks originally unwilling to participate have begun giving poorer people credit to buy the systems, Painuly told SciDev.Net. These 'outside' loans now make up more than half of all loans.
"The whole purpose of the project was to create a viable, sustainable market for these systems," explains H.V. Kumar, director of Crestar Capital, UNEP's implementation partner in India.
He says the project has succeeded because it uses different ways of helping poor people — without the need to donate free systems or use heavy capital subsidies.
"We facilitated the process so that people can access money on their own," says Kumar.
The project has been extended to the Indian states of Gujarat, Kerala and Maharashtra, and UNEP plans to initiate similar projects in Algeria, China, Egypt, Ghana, Indonesia, Mexico, Morocco and Tunisia.
Indian Express story on UNEP Solar Loan Program - H VK quote
http://www.indianexpress.com/story/29824.html
Indian Express story on UNEP Solar Loan Program - H VK quote
Renewables 2004, Bonn, Germany
www.renewables2004.de/pdf/participants.pdf
Renewables 2004, Bonn, Germany
SEFI Workshop at Bonn, Germany, 2004
www.unfoundation.org/files/pdf/2006/Practitioners_conference_final_report.pdf
SEFI Workshop at Bonn, Germany, 2004
SciDev.net Article on UNEP Solar Loan Program
http://web.scidev.net/en/news/indian-loan-project-gives-solar-energy-to-rural-po.html
SciDev.net Article on UNEP Solar Loan Program
H V Kumar - Report on Bundling of Small Scale Carbon Credits
www.risoe.dk/rispubl/SYS/syspdf/sys_6_2006.pdf
H V Kumar - Report on Bundling of Small Scale Carbon Credits
Euromoney REFF 2006 - Call for Investment Proposals
www.energy-base.org/fileadmin/media/base/downloads/REFF/CallForProjects.pdf
Euromoney REFF 2006 - Call for Investment Proposals
http://www.bopnetwork.org/node/75
Indian Loan Project Gives Solar Energy to Rural Poor
Maryke Steffens - 30 April, 2007
A UN project in India has given thousands of people in rural areas access to reliable electricity by enabling them to take out small loans to purchase solar panels.
The project, launched by the UN Environment Programme (UNEP) in 2003 in the southern Indian state of Karnataka, facilitated over 18,000 loans for solar panels over three years.
A report on the project will be presented at the UN Commission on Sustainable Development, meeting this week (30 April) in New York, United States.
The sunlight-powered systems offer a reliable source of clean energy.
"When this project started, about 70 per cent of people in rural India had no access to electricity," says Jyoti Painuly, senior energy planner at the UNEP Risoe Centre on Energy, Climate and Sustainable Development in Denmark, which helped implement the project.
At the time there were no credit sales, so the solar panels — already available in India for US$300-500 — were too expensive for most people.
"The people who needed the solar panels the most didn't have access to the finance," says Painuly.
UNEP recruited two popular banks to take part in the project as part of their 'priority sector lending' obligation — a government directive requiring Indian banks to give a percentage of their loans to people in rural areas.
To attract borrowers, UNEP negotiated an extension of the loan period from three to five years, decreasing the size of monthly repayments.
The banks agreed to accept a smaller initial deposit and a two per cent cut in interest rates, compared to standard loans. At the start of the project, UNEP also subsidised the loans to further decrease interest rates.
After three years, the project had increased credit loans for solar panels from 1,400 to 18,000, with few loan defaults.
Following the project's success, banks originally unwilling to participate have begun giving poorer people credit to buy the systems, Painuly told SciDev.Net. These 'outside' loans now make up more than half of all loans.
"The whole purpose of the project was to create a viable, sustainable market for these systems," explains H.V. Kumar, director of Crestar Capital, UNEP's implementation partner in India.
He says the project has succeeded because it uses different ways of helping poor people — without the need to donate free systems or use heavy capital subsidies.
"We facilitated the process so that people can access money on their own," says Kumar.
The project has been extended to the Indian states of Gujarat, Kerala and Maharashtra, and UNEP plans to initiate similar projects in Algeria, China, Egypt, Ghana, Indonesia, Mexico, Morocco and Tunisia.
This article was first published on SciDev.Net and is republished here with permission.
Indian Loan Project Gives Solar Energy to Rural Poor
Maryke Steffens - 30 April, 2007
A UN project in India has given thousands of people in rural areas access to reliable electricity by enabling them to take out small loans to purchase solar panels.
The project, launched by the UN Environment Programme (UNEP) in 2003 in the southern Indian state of Karnataka, facilitated over 18,000 loans for solar panels over three years.
A report on the project will be presented at the UN Commission on Sustainable Development, meeting this week (30 April) in New York, United States.
The sunlight-powered systems offer a reliable source of clean energy.
"When this project started, about 70 per cent of people in rural India had no access to electricity," says Jyoti Painuly, senior energy planner at the UNEP Risoe Centre on Energy, Climate and Sustainable Development in Denmark, which helped implement the project.
At the time there were no credit sales, so the solar panels — already available in India for US$300-500 — were too expensive for most people.
"The people who needed the solar panels the most didn't have access to the finance," says Painuly.
UNEP recruited two popular banks to take part in the project as part of their 'priority sector lending' obligation — a government directive requiring Indian banks to give a percentage of their loans to people in rural areas.
To attract borrowers, UNEP negotiated an extension of the loan period from three to five years, decreasing the size of monthly repayments.
The banks agreed to accept a smaller initial deposit and a two per cent cut in interest rates, compared to standard loans. At the start of the project, UNEP also subsidised the loans to further decrease interest rates.
After three years, the project had increased credit loans for solar panels from 1,400 to 18,000, with few loan defaults.
Following the project's success, banks originally unwilling to participate have begun giving poorer people credit to buy the systems, Painuly told SciDev.Net. These 'outside' loans now make up more than half of all loans.
"The whole purpose of the project was to create a viable, sustainable market for these systems," explains H.V. Kumar, director of Crestar Capital, UNEP's implementation partner in India.
He says the project has succeeded because it uses different ways of helping poor people — without the need to donate free systems or use heavy capital subsidies.
"We facilitated the process so that people can access money on their own," says Kumar.
The project has been extended to the Indian states of Gujarat, Kerala and Maharashtra, and UNEP plans to initiate similar projects in Algeria, China, Egypt, Ghana, Indonesia, Mexico, Morocco and Tunisia.
This article was first published on SciDev.Net and is republished here with permission.
H V Kumar - Presentation to UN Foundation - Unleashing Private Entrepreneurship in India for Environment-Friendly Energy
http://www.teriin.org/events_inside.php?id=14231
Unleashing Private Entrepreneurship in India for Environment-Friendly Energy
16 December 2005Silver Oak, India Habitat Centre, New DelhiOrganized jointly by the UN Foundation and TERI
Coordinator: Mr Amit Kumar
Agenda
0930 - 1000 am
Registration & coffee
Opening Session
1000 - 1005 am
Introductory RemarksDr R K PachauriDirector-General, TERI
1005 - 1010 am
Overview and ContextTimothy E WirthPresident, UN Foundation
1010 - 1015 am
CommentsMr Ted TurnerChairman, UN Foundation
1015 - 1028 am
Inaugural addressDr Montek Singh AhluwaliaHon'ble Deputy Chairman, Planning Commission, New Delhi
1028 - 1030 am
Vote of ThanksTERI
Session on Renewable Energy as Business Opportunity for Socio-economic development
1030 - 1110 am
Chair: Dr R K PachauriDirector General, TERI
Outcomes of the Beijing International Renewable Energy ConferenceDr Mohamed T. El-AshryUN Foundation
PresentationsBio-fuel experience in IndiaDr Sameer MaithelTERIBio-fuel experience in BrazilThe Embassy of Brazil, IndiaSolar home system project for rural poorMr H V KumarCrestar Capital India Pvt. Ltd.
1110 - 1150 am
Synthesis & Open discussion(Includes TERI's experience on commercialization of RETs)
1150 - 1200 pm
Closing comments Senator Timothy E WirthPresident, U N Foundation
H V Kumar's Presentation at Citi Foundation's Microcredit Workshop at Ahmedabad, 2007
http://www.grandjunctiondesign.com/system/files/AGENDA_FINAL.pdf
H V Kumar's Presentation at Citi Foundation's Microcredit Workshop at Ahmedabad, 2007
H V Kumar, Contributor to SEFi's Sustainable Energy Finance Directory
http://www.sef-directory.net/partners_contributors.php
H V Kumar, Contributor to SEFi's Sustainable Energy Finance Directory
Presentation by H V Kumar at Euromoney's Renewable Energy Financing Forum 2007 at Delhi
http://www.euromoneyenergy.com/pdfs/ECK176.pdf
Presentation by H V Kumar at Euromoney's Renewable Energy Financing Forum 2007 at Delhi
Presentation by H V Kumar aty 3cEEE workshop on Energy Efficiency financing, for World Bank
http://3countryee.org/Mumbai/ReportMumbaiWorkshop.pdf
Presentation by H V Kumar aty 3cEEE workshop on Energy Efficiency financing, for World Bank
Climate Action Article - Complete Book
http://www.climateactionprogramme.org/images/uploads/book_pdfs/climate_action_book_lowres.pdf
The complete Climate Action booklet
Cimate Action Article
Renewable energy financing; PV solar home systems from South India
Published on 26 November 2007
Jyoti Prasad Painuly, Senior Energy Planner, UNEP Risoe Centre, Risoe National Laboratory, DTU, Denmark, and H V Kumar, Director, Crestar Capital India Private Limited, Mumbai, India
The UNEP programme described here aimed to facilitate access to clean energy to households in South India using PV solar home systems. Accessing finance was found to be a critical barrier and to increase finance access, risk perception from partner banks had to be addressed. This was achieved through technical and market development support, including equipment specification development, vendor qualification, and development of a competitive market through a multivendor approach. More than 18,000 households have now received clean energy directly through the programme with a current vibrant market for SHS in Karnataka, India.
ENERGY OPTIONS IN INDIA
More than 60 per cent of households in South India are estimated to have no access to electricity and, even when connected to the electricity grid, rural and semi rural communities suffer power outages and fluctuating power quality. These households tend to rely on less efficient energy sources, such as kerosene for light and dung and wood for heat. This not only adversely impacts health but limits both economic and social development. Poor quality of electricity has led many rural households to consider generators, inverters and solar PV systems.Solar energy using photovoltaics (PV) is a clean energy alternative to displace conventional polluting fuels, such as kerosene, for lighting and other applications. With significant PV sales and service infrastructure already in place, PV solar home systems (SHS) offers a viable alternative for lighting. But the lack of a credit market has constrained its growth. The households, who need it most, do not have access to credit needing subtle public interventions, just enough to drive the market forward in a sustainable way. The general aim of the UNEP programme described here was to facilitate access to clean energy to households in South India, particularly poorer households in rural and semi urban areas with the most power shortages with no access to better, more expensive alternatives.
Is solar home system (SHS) a viable option?
Electricity produced using a PV system is not cheap and can only help households tide over the problem of access to reliable electricity, mainly for lighting purposes. Grid electricity is often subsidised making any comparison difficult. However, if subsidy was assumed to be eliminated and electricity prices assumed to increase consistently, an SHS, despite the high initial cost, can be an attractive long term option when compared to costly or unreliable power supplies, see Table overleaf.Without financing, however, the high initial cost of PV will continue to constrain the growth of the Indian SHS market. But an increased access to credit from the banking sector could enable rural households to buy cleaner energy and pay for it with money that is currently being spent on less efficient, and often more polluting, forms of energy.
INDIA’S BANKING SECTOR
India has a well developed rural banking infrastructure, but the links to the renewable energy sector are weak at best. For this UNEP project, the need was clear for some short term market intervention to assist banks in gaining confidence in renewable energy technologies and increasing their exposure to SHS. This would increase consumer access to credit and lower the cost of this credit. A market based intervention could remove key barriers and allow market forces to expand the SHS market without further external support. Having identified access to finance as the main barrier, UNEP helped Indian banks develop lending portfolios of solar home systems. Potential customers for the loan facilities were households and small enterprises looking to use solar PV for either domestic or income generating activities. The programme was expected to help 18,000 customers directly and many more households indirectly, as a result of opening up the SHS credit market.
STAKEHOLDER CONSULTATION
During the first phase of the programme, a wide range of stakeholders in India were consulted, including SHS vendors, banks and other small scale financing institutions, governmental agencies, experts and NGOs. These consultations provided significant input on the state of the solar industry in South India, on the need for SHS financing and the best mechanisms for influencing growth of this financing.
FINDING THE RIGHT FINANCE PARTNERS
Based on consultations, the State of Karnataka was chosen as the target area for the initial phase of implementation mainly because of its strong rural banking system, established means of credit delivery and its vibrant solar industry with an extensive service infrastructure already in place. After consulting with a number of banks, partnership agreements were signed with Canara Bank and Syndicate Bank, two of India’s largest with branch networks in the target region.
Type of financing offered
The intervention model used was intended to encourage the market to grow and vendors to innovate in their product and service offerings while not substantially distorting the market. Importantly, a predetermined exit strategy was considered essential. Feedback was solicited on a variety of possible finance support mechanisms, including capital subsidies, front-end and back-end interest rate subsidies, credit default guarantees, loan term extensions, beneficiary margin support and subsidised transaction costs.
After weighing the pro and cons of various alternatives, an interest rate subsidy was chosen for accelerating
the market without overly distorting it in the long term. By providing loans with an interest rate buy-down (using the bank’s capital but UNEP interest subsidies), both the high up front cost and high credit cost barriers could be addressed. The interest subsidy could be decreased progressively to make the exit easy. This interest subsidy approach has in fact already been applied successfully in India, in the solar thermal sector by the Ministry of Renewable Energy (MNRE) and in the solar PV sector on a small scale by Selco, as a direct vendor initiative.
PROJECT’S APPROACH AND RESULTS
Based on discussions with partners, market development support was given by increasing awareness and providing information. Technical support was provided through vendor qualification and SHS specifications and training of bank staff (based on needs). Financial support was given through interest subsidy to end users (which also helped develop the market), and transaction cost support to the banks. A multivendor approach was taken to ensure quality products, competitive pricing and reliable after sales support. The programme was open to all vendors who fulfilled product quality and after sales service criteria. These were set through competitive forces, not programmatic regulations.Since its launch, 18,000 customers have been served directly through the project over a period of four years by the partner banks via 2,000 branches. Many more were served outside the project as a result of the opening of the credit market for SHS in the region.Interest subsidy was decreased in October 2004, and again in June 2005, bringing down the interest to nine per cent, which was close to the market rates. The interest subsidy reduction had no adverse impact on the programme, indicating its sustainability. The project won the prestigious Energy Globe Award in 2006 in recognition of its success.
ROLE OF THE BANKING SECTOR
Encouraged by the success of UNEP partner banks, several banks launched their own loan programmes independent of UNEP support and some broadly follow the practice established by the UNEP. Syndicate Bank continues to lend for SHS in Karnataka after the end of UNEP financial support and has extended it to all parts of India, although they have limited success elsewhere, mainly due to an under developed market. The Bank, however, registered good success with its ‘Solar Grama’ (Solar Village) initiative, where loans were provided mainly to lower income families for electrification of household clusters (through SHS). Canara Bank successfully extended the loan programme to the neighbouring Kerala State. Although Canara continues to lend, the pace slowed down during 2005 and 2006 under competitive pressures from other banks. With the end of the formal partnership with Canara Bank in December 2006, the programme ended in South India. New initiatives were taken up in the second half of 2006 and the programme was launched in early 2007 in Maharashtra in partnership with the Bank of Maharashtra, and in Gujarat in partnership with Sewa (a well known women’s social organisation), and their financial arm, Sewa Bank. Technical support and support for awareness measures was provided to the partners under the programme. SHS sales at Sewa have picked up considerably, mainly on account of extensive product innovations by the vendor Selco to enhance livelihood opportunities using PV technologies. The Bank of Maharashtra is trying to put the programme on a sound footing. In addition, the project has supported international NGO, S3IDF, in providing solar lighting to the urban poor, eg hawkers and small shop owners.
Expanding into rural markets
Indian Banks have large rural banking networks and a wide range of products that cater to various customers. Adding to their range of asset products gives banks a competitive edge over the rest of the market, and solar home light loans address a critical need for their customers. Since most loans were sold in the rural markets, it helped banks fulfil specific business segment and geographical targets. The banks see the SHS business from a variety of perspectives, which includes extending their reach to rural markets, other business from the SHS customers, and satisfaction from meeting the needs of those who have no access to electricity for lighting, which they see as a part of their corporate social responsibility.
“Indian banks pursue stiff business targets for financial inclusion and solar light loans help them expand their reach in rural markets, especially among their lower income customers”, said MBN Rao, Chairman and Managing Director of Canara Bank. “For small borrowers, the solar loan adds value to their livelihoods and increases cash flows in the form of higher productivity. Besides, our bank takes great pride in contributing to social change in association with UNEP. Putting solar home lighting systems and reliable energy supplies within the reach of the common citizen kindles hopes and aspirations of many for a better life and well being.” At grass roots level, bank managers see this as an opportunity to increase their business and derive a sense of satisfaction by meeting this crucial need for lighting. “This (SHS loan) helps the people to come to the bank and when they come ... they can get other financing facilities from the bank. We can do good business with them through dairy loans, education loans etc”, says Vasudev Rao, Bank Manager of the Syndicate Bank, who was involved in the programme and advanced several SHS loans from his branch. “It is a very good programme, people are happy and as a bank, we are happy. We are also happy because we have done something good for the poor. It gives us satisfaction.”
LESSONS LEARNT
Access to financing is a major barrier for rolling out renewable energy in India. The risk perception of financing institutions, and small or non-existent markets are two important issues that must be addressed for renewable energy to achieve its potential. Technical support and a code of best practice for vendors were used to address the issue of risk, and market development was supported through reduction of financial costs to consumers, and awareness programmes by the partners.Stakeholders’ involvement at every stage of the programme and in every decision was very important along with enough flexibility to incorporate changes as a result of consultations and changes in environment. Renewable energy, especially PV electricity, is still expensive for the very poor. Therefore, it is important to integrate it with income generating activities, if the very poor are to be reached. Some were reached in the programme, through support for S3IDF’s street hawkers lighting project, and the Sewa Bank’s work in Gujarat. Feedback mechanisms are other valuable tools that can make a programme successful. Annual audits of some branches of partner banks and customer satisfaction surveys were used in the programme as feedback mechanisms. Findings from these were used to prepare a good practices manual, and feedback was also used by the partners to improve the programme.Although the programme is easily replicable, initial support may still be needed in other regions due to a need for market development through awareness programmes, and capacity development of financial institutions that may be new to this kind of programme.
Solar energy using photovoltaics (PV) is a clean energy alternative to displace conventional polluting fuels, such as kerosene, for lighting and other applications.
Table: Monthly costs in Rupees for a household with four lights.
Period
Existing grid customer
New grid customer
Kerosene
Inverter
SHS
First five years
115
297
212
465
325
10 years
148
298
272
465
200
Source: Economic and Financial Assessment of SHS for the State of Karnataka, Crestar Capital, March 2002.
THE INTEREST RATE BUY-DOWN
The interest rate buy-down structure allows partner banks to offer consumer loans at a concessional interest rate of five per cent initially, seven per cent below the prime lending rate of 12 per cent. While UNEP funded the interest rate buy-down, the banks provided the capital and carried 100 per cent of the credit risk. Banks are therefore motivated to maintain quality loan portfolios. Price distortion was minimal since the financing cost, not the capital cost was subsidised.
Authors
Jyoti Prasad Painuly works as a Senior Energy Planner at UNEP Risoe Centre, Denmark. He has wide-spread experience of working on a variety of issues in energy and environment area. This includes in energy and environment economics and policy, energy efficiency, renewables, technology assessment, climate change issues and bio-energy.H V Kumar is Director of Crestar Capital India Private Limited and based at Mumbai, India. He advises on renewable energy finance and worked with the UNEP to manage the PV Solar Home Systems Project in South India.
Organisations
The UNEP Risoe Centre on Energy, Climate and Sustainable Development (URC) supports the United Nations Environment Programme (UNEP) in its aim to incorporate environmental aspects into energy planning and policy worldwide, with a special emphasis to assist developing countries.URC is sponsored by UNEP, the Danish International Development Assistance (Danida) and Risoe National Laboratory.
Enquiries
Jyoti Prasad Painuly, Senior Energy Planner, UNEP Risoe Centre on Energy, Climate and Sustainable Development (URC), Risoe National Laboratory, DTU, Frederiksborgvej 399, PO Box 49, DK 4000 Roskilde, DenmarkTel: +45 46 775167Fax: +45 46 32 19 99E-mail:
j.p.painuly@risoe.dk H V Kumar, Director, Crestar Capital India Private Limited, 4 Vishnu Mahal, D Road, ChurchgateMumbai 400 020, IndiaTel: +91-22-22819944E-mail:
crestar@vsnl.netVisit UNEP RisoeVIsit UNEP Division of Technology, Industry and Economics
Sunday, April 6, 2008
Energy Globe Award 2006 - 1
http://www.energyglobe.com/news/details/category/2/id/41/
ENERGY GLOBE Winners 2006 (11 April 2007)
World premiere: For the first time a TV Show is broadcast from the European Parliament in Brussels. Reason for this miracle: the ENERGY GLOBE Award. 732 projects from 96 countries were submitted in the categories Earth, Fire, Water, Air and Youth.
Chaired by Maneka Ghandi, Indian environmentalist and politician, the international jury distinguished the following projects: Category Earth: John Maina from Kenya for implementing solar energy ovens for drying vegetables and fruits. Thus local farmers are able to increase their harvest by 50% without harming the environment. Category Fire: The UNEP Risoe Center and the Risoe National Laboratory Denmark for launching a four-year plan for establishing over 16,000 solar homes in India together with Danish support and local Indian funding. Category Water: Jerry M. Brownstein for developing a very effective waste water treatment system using a special water filter made of recycled plastics; for obtaining potable water from waste water. Category Air: Reindert Augustijn for inventing small biogas plants that help to reduce annual CO2 emissions by up to 54,000 tons and serve as role models for another 150,000 plants. Category Youth: University of Art in Linz (Austria) for inventing a new solar passive house in South Africa that can provide an indoor temperature level of 20 degrees independently from outdoor temperature using a natural air conditioning system. National Award: Goes to the host country Belgium for sensitively changing a historical private house into an energy-saving building. ENERGY GLOBE Founder Wolfgang Neumann: “The distinguished projects are excellent role models to the whole world! If we don’t blame others and start taking action instead, all goals to protect the environment are within reach!” The environmentalist is supported by celebrities from all over the world: Hollywood star Martin Sheen, film director Emilio Estevez, author Waris Dirie, pop singer Robin Gibb, star violinist Nigel Kennedy, Indian environmentalist Maneka Ghandi and European Parliament President Hans-Gert Pöttering. The awards presentation show was broadcast by the German TV network 3Sat on Sunday, 15 April 2007, 11:30 a.m. - 1:00 p.m., moderated by Desiré Nosbusch. The gala will be broadcast by international TV stations throughout the world and can be seen by a record number of 3.4 billion TV viewers around the world.
UNEP Solar Loan Program - Launch
http://www.un.org/apps/news/story.asp?NewsID=6327&Cr=India7Cr1=
UN, banks offer cut-rate loans for solar power development in India4 March 2003 – The United Nations Environment Programme (UNEP) today launched a major new $7.6 million initiative with two of India's largest banking groups to offer 18,000 southern Indian households low-cost financing for clean and reliable electricity from solar power.
"This initiative helps to meet both environmental and development objectives by overcoming a major barrier to increasing the use of renewable energy – access to finance,” UNEP Executive Director Klaus Toepfer said.
In the southern Indian state of Karnataka, Syndicate Bank and Canara Bank are offering the new loans in which UNEP is "buying down" financing costs of photovoltaic solar home systems. Indian households will effectively be able to purchase systems at an interest rate of approximately 5 per cent, compared to the normal consumer lending rates of 11 to 12 per cent. The programme is made possible with support from the UN Foundation (UNF) and Shell Foundation.
By combining two banks and a number of UNEP-qualified solar home system vendors, UNF President Tim Wirth said the programme is a "market-driven approach designed to stimulate competition among vendors and ensure quality products, competitive pricing and reliable after-sales service."
Many Indian households still rely on inefficient and polluting energy sources such as kerosene, which produces negative health, environmental and social impacts. In Karnataka, even where grid electricity is available, problems of capacity shortages and inconsistent quality plague the power supply.
Despite high initial costs, UNEP said solar home systems emerge as an attractive option in the context of costly or unreliable alternatives and escalating grid power tariffs and therefore, a growing number of households are turning to solar as a matter of necessity and convenience.
UNEP Solar Light Loan Program
http://www.uneptie.org/energy/act/fin/india/
A four-year $7.6 million effort was launched in April 2003 to help accelerate the market for financing solar home systems in southern India. The project is a partnership between UNEP Energy Branch, UNEP Risoe Centre (URC), two of India's major banking groups - Canara Bank and Syndicate Bank, and their sponsored Grameen banks.India's solar PV manufacturing sector has grown significantly since the 1990s, mostly for export, however the market for solar home systems has been slow to develop, in part due to a lack of consumer financing options. The aim of this effort is to help Canara bank and Syndicate bank develop lending portfolios specifically targeted at financing solar home systems (SHS). With the support of the UN Foundation and Shell Foundation, the project provides an interest rate subsidy to lower the cost to customers of SHS financing.Indian banks are these days keen to develop new loan products and the partnership with UNEP allows them to do so in a growing clean energy sector. An interest subsidy helps them to build solar financing portfolios without distorting the credit risk - sometimes a problem with guarantees - or the existing cash market for solar home systems.Five solar vendors completed the programmes` qualification process, making their customer eligible for financing. An update of programme status can be downloaded here.
Find below interview clips with Eric Usher, UNEP Programme Manager for the Indian Solar Loan Programme (In this interview, Eric Usher discusses the need and new approaches to engage the finance sector for lending to the clean energy sector, why the Indian Solar Loan Programme succeeded, and the ‘moral hazard’ of too much money in the wrong place. Each segment is about 3-4 minutes)
UNEP Web-Site - Energy Globe Award 2007
http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=504&ArticleID=5570&l=en
UN Engages Banks to Light Up Rural India
Rural financing supports move from kerosene lamps, unreliable power;Four-year, $1.5 million pilot drives 13-fold jump in rural solar installations;Expansion plans also target China, Algeria, Egypt, Mexico, Indonesia, Ghana
Life for an estimated 100,000 people in poverty-stricken rural India has been improved dramatically by several hours of reliable solar-powered lighting every night, made available by a UN-led pilot project to facilitate household financing for solar home systems.
The $1.5 million pilot, managed by the United Nations Environment Programme (UNEP), has improved so many lives in India that sister programmes to boost energy access are being initiated in other developing countries.
Even a few hours of 20 to 40-watt solar-powered lighting in homes and small shops nightly has been credited with better grades for schoolchildren, better productivity for needlework artisan groups and other cottage industries, and even better sales at fruit stands, where produce is no longer spoiled by fumes from kerosene lamps.
Behind these quality-of-life upgrades is an innovative UN-led project to persuade Indian bankers to finance small loans for solar systems - typically $300 to $500 for a system to power two to four small lights or appliances. A report on the programme will be offered at the UN Commission for Sustainable Development, the annual two-week meeting of which opens in New York Monday April 30 with a focus on energy issues.
"Kerosene used by the poor for lighting is often unaffordable, unavailable, unsafe and unhealthy while the electricity power grid is unreliable. To provide even this little degree of electricity reliability and independence is to empower the poor in ways that can profoundly alter lives for the better," says Timothy E. Wirth, President of the UN Foundation (www.UNFoundation.org), which, with the Shell Foundation (www.shellfoundation.org), provided the project's core funding.
He notes that international study after study has established strong, direct links between electricity use and financial success and well-being.
"The project underlines the multiple benefits accruing by providing clean and renewable energies in developing countries," says UNEP Executive Director Achim Steiner. "These range from reducing the emissions that are causing climate change to overcoming poverty and the serious health toll taken by dirty fuels - especially on women and children and particularly in the home. In doing so, such projects can help towards achieving the Millennium Development Goals by 2015.
"The success of this project should also serve as a catalytic blue-print for similar schemes across the developing world and lead to the scaling up of renewable energies everywhere."
"To average citizens of most developed countries, with perhaps dozens of lights and unlimited electric power on every floor of a home, conditions in rural parts of India may seem unimaginable," says Jyoti Painuly, Senior Energy Planner at the UNEP Risoe Centre on Energy, Climate and Sustainable Development. "We aren't talking about operating a toaster, kettle, computer or microwave oven - just a handful of low-wattage lights, and perhaps a small fan, radio or TV for a few hours nightly - but even that can make a world of difference.
"The 45% or so of people in India hooked up to a power grid suffer chronic, daily electricity outages. Others trek long distances to buy a few expensive liters of polluting kerosene for lamps, often finding no supplies, much of it sold on the black market as an illegal way to dilute gasoline and diesel fuel.
"This project removes one of the main barriers to the shift to solar power - lack of financing. Asking customers previously to pay cash for solar systems meant asking them to pay upfront an amount equal to 20 years of electricity bills."
With just $1.5 million, the project has posted very high returns in four years, causing a 13-fold increase in the number of solar systems financed in the pilot area of Karnataka state, Southern India, from 1,400 to 18,000. In addition to the many social and health benefits produced, the project has created much new employment at factories producing solar panels and related products, at sales dealerships and for maintenance workers.
Although in 2003 the solar sector was mostly a cash-only business, today more than 50% of sales are bank financed. It recently won a top-of-category Energy Globe "World Award for Sustainability," considered today's most prestigious energy-related environmental prize.Please see International Winners - Fire First Prize .
Free market forces and competition is changing the complexion of and expanding the market, says Eric Usher, head of UNEP's Renewable Energy and Finance Unit, UNEP Division of Technology, Industry and Economics, Paris.
Encouragingly, Indian banks not included in the initial partnership have launched competing solar loan products and competition is heating up.
"Lack of access to affordable energy produces one of poverty's most powerful grips," he says. "This project empowers people to invest and helps free them from reliance on government interventions."
The India programme's success has already inspired a sister effort in Tunisia, where the market for solar water heaters has been shifted from cash to credit, with over 16,000 systems financed. Similar programmes are upcoming for China, Indonesia, Egypt, Mexico, Ghana, Morocco and Algeria.
How the project works
When the programme began, only 31% of India's rural households had electricity connections compared to 76% of urban households. On average, power went down for one hour of every six in peak periods. And tariffs for grid power, up drastically in recent years, are expected to rise even further.
Despite high capital costs ($500), Solar Home Systems have emerged as an attractive long-term option - relatively simple, reliable and quickly installed. However, even if a solar home system was the best option from a villager's economic standpoint, little or no access to credit meant it was simply beyond reach.
Two of India's largest financial institutions became the project's initial partners: Canara Bank and Syndicate Bank. Two more banks, the Bank of Maharashtra and Sewa Bank, were added as partners this year.
Although banks in India are required to make 40% of their loans in priority sectors (e.g. causes with strong social objectives), "bankers seldom lend for an unfamiliar product," according to Mr. Usher. "Solar Home Systems were unfamiliar gambles. The Indian Loan Programme used a competitive market development model to help banks enter the sector, remove information and perception barriers while creating standards for quality products, sales and service."
The programme involved an interest rate buy-down, marketing support and a vendor qualification process. The commercial interest rate for equivalent loan types at programme inception was 12%. UNEP's subsidy initially brought this rate down to 5%, the subsidy phased out over time. Loans were offered through more than 1,000 Canara and Syndicate branches and over 1,000 branches of the rural regional banks (the so-called Grameens) affiliated with Canara and Syndicate.
Solar vendors, once qualified, could direct any interested customer to their local Canara, Syndicate or Grameen bank branch for financing. Five solar vendors achieved qualification to take part in the programme, therefore there were plenty of competitive products. Vendors offered long-term warranties and five-year maintenance contracts and agreed to recondition systems for resale in the event of a loan default.
Partner banks agreed to let borrowers pay only 15% of their purchase up front, as opposed to the conventional 25% deposit, loans could be repaid over five years instead of the usual three years allowed for non-mortgage loans, and security and documentation requirements were simplified.
Initially, banks were paid 300 Rupees (approx US $7) per loan account to help with publicity and information sessions, and defray processing costs.
As the subsidies phased out and project-inspired competition began, the UNEP-sponsored banks gradually surrendered predominance in solar loan financing. Loans are now available across several thousand mostly rural bank branches - a development considered the key growth driver for home solar systems.
A survey showed borrowers' average annual household income was 50,000 Rupees (US $1,200) or more. It also revealed the #1 reason behind buying a system: chronic grid power failures and shortages.
The typical home system comprised a roof-mounted solar photovoltaic module, storage battery, charge controller, interior wiring and switches and electric lighting fixtures. The solar panels have generally been in the 18Wp to 40 Wp range, capable of powering up to 4 CFL lights and a DC fan.
In addition to private homes, the project found household clusters (30-40 houses each) in an estimated 50 villages pooling resources to install solar home systems as an alternative to the grid.
As well, an independent initiative by the Small-Scale Sustainable Infrastructure Development Fund (S3IDF), an international NGO, in collaboration with vendor Selco, has spawned several small street hawker solar lighting projects. More and more small town hawkers are switching from kerosene lamps to solar lights.
Most kerosene lamps, especially the open wick type commonly used in rural India, provide very low lighting intensities, far below those required to meet reading needs adequately. The efficiency of these lamps is not even 10 percent of the most in-efficient incandescent electric lighting. This means high costs for lighting and undesired emissions. A study shows kerosene and similar fuels account for 20% of global lighting costs but provide only 0.1% of lighting energy services. In terms of greenhouse gas emissions, a single wick burns about 80 litres of kerosene, producing more than 250 kg of carbon dioxide per year.
Kerosene emits several other harmful gases while burning, and due to its low efficiency contains large amount of unburned hydrocarbons and soot. And since a majority of homes in rural India are poorly ventilated, it poses a health hazard, commonly causing respiratory, and eye problems. Eye, nose and throat irritation are caused by inhalation of the fumes.
Kerosene use in lamps is also a safety risk - lamps can easily get knocked over setting fire in the home. An estimated 100 million families use kerosene for lighting in India, exposing themselves to these health and safety hazards.
"Our bank takes great pride in contributing to social change in association with UNEP," says Mr. M. B. N. Rao, Chairman and Managing Director of Canara Bank. "Putting Solar Home Lighting Systems and reliable energy supplies within the reach of the common citizen kindles hopes and aspirations of many for a better life and well being."
"As governments meet next week in New York for the 15th Session on the Commission on Sustainable Development, the topic of energy will be at the top of the agenda, and particularly how to finance the global shift to a cleaner energy mix," says Mr. Steiner. "This programme has shown one important area where this is being done on the ground, bringing together local banks, a clean energy technology and the entrepreneurial drive of modern India."
Contacts:
Mr. Terry Collins +1-416-538-8712; +1-647-284-8712 (m); terrycollins@rogers.comMr. Robert Bisset, UNEP, Paris +33 1 4437 7613, +33 6 2272 5842 (m); robert.bisset@unep.frMr. Jyoti Painuli, UNEP RISOE Centre, Denmark, +45 4677-5167; j.p.painuly@risoe.dk Mr. H.V. Kumar, India, +91-22-228-19944; +91-982-1045-167; crestar@gmail.com
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