large scale solar water heater market development program...
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Republic of Lebanon Ministry of Energy and Water
Lebanese Center for Energy Conservation
LARGE SCALE SOLAR WATER HEATER MARKET DEVELOPMENT PROGRAM IN LEBANON
( REPORT PREPARED UNDER A WORLD BANK-SUPPORTED ACTIVITY WITH THE LEBANESE MINISTRY OF ENERGY AND WATER AND THE LEBANESE
CENTER FOR ENERGY CONSERVATION)
DRAFT
World Bank
June 2011
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1
Large Scale Solar Water Heater Market Development Program in
Lebanon
TABLE OF CONTENTS
Executive Summary 5
1. Introduction 11
2. Electricity Supply and Demand Situation 13
3. Role and Importance of Hot Waters Heaters 14
4. Solar Radiation 16
5. Market Availability of SWH 17
6. Technical and Commercial Potential for SWHs 18
6.1. Solar Water Heater Technologies 18
6.1.1. Type of Solar Water Heaters Systems 19
6.1.1.1. Direct and Indirect Systems 19
6.1.1.2. Passive and Active Systems 21
6.1.1.3. Passive Direct Systems: ICS and CHS 22
6.1.1.4. Active Indirect Systems: Drain back and Antifreeze 22
6.2. Residential and Tertiary Sectors 23
7. Assessment of resources for local manufacture, imports, costs and installation
practices for SWHs 24
8. LCEC‟s and Other Donor Funded Initiatives in the area of SWHs 24
9. SWH Standards in Lebanon 27
10. Implementation Mechanisms for SWH Standards and Associated Regulatory
Approaches To Strengthen Compliance 27
11. Review of Financial Incentives Available for SWHs in the Lebanese Market 27
12 Proposed Programmatic Framework for Large Scale Deployment of Individual 28
SWH Systems in the Residential Sector 28
12.1 Short-term and Long-term Goals 28
12.1.1 Phase 1 Program (2011-2014) for Short-term Goals 28
12.1.2 Phase 2 Program (2015-2020) for Long-term Goals 29
12.2 Conditions of Eligibility of Suppliers, Installers and Products 32
12.3 Supporting Financial Incentives and Innovative Mechanisms 32
12.3.1 Mechanics of the BDL/ NEEREA Financial Incentive Scheme
12.4 Institutional Coordination and Management for the Implementation of the
SWH Scale Up Programs 35
12.4.1 Role of Ministry of Energy and Water
12.4.2 Role of Lebanese Center for Energy Conservation 35
2
12.4.3 Role of Project Management Unit within LCEC 36
12.4.4 Role of BDL through commercial Banks 37
12.4.5 Role of others Stakeholders 37
12.4.6 Role of Suppliers of SWHs 38
12.4.7 Role of Clients 38
12.5 Financial and Economic Analysis: Economic rate of return of SWH 39
12.5.1 Cost of Proposed Program (Phase 1: 2011-2014) 40
12.5.2 Financing Scheme of the Proposed Program 41
12.5.2.1 Benefits to Consumers and Utility 41
12.5.2.2. Environmental benefits 42
13. Proposed Programmatic Framework for Large Scale Deployment of Collective
SWH systems in residential and tertiary sectors in urban areas 42
13.1 Short and long term-goals 43
13.2 Structure of the Program (eligibility of suppliers, installers, products, etc,) 43
13.3 Financial Mechanism 43
13.4 Institutional and Stakeholder Responsibilities 44
13.5 Financial and Economic Analysis 45
13.6 Benefits to Consumers and Utility 46
13.7 Environmental Benefits 46
14. CDM/Carbon Finance Potential Benefits, Methodologies, and Approaches 47
14.1 CDM and Evolution of Carbon Markets 47
14.2 CDM Strategies and Approaches 48
14.3 Post-2012 Carbon Markets 50
14.4 CDM Methodology for Solar Water Heaters 50
15. Capacity Building and Dissemination 51
15.1 Capacity Building 51
15.2 Promotion, communication and awareness program 53
16. Monitoring and Evaluation Approaches 55
17. Conclusions 56
3
Annexes:
Annex 1: Tables of calculation
Annex 2: List of Contact Persons
Annex 3: Eligibility of Suppliers, Installers and Products
Annex 4: Technical Specification of Eligible Products
Annex 5: Copy of Intermediate Circular No 236
Annex 6: List of Lebanese SWH companies
Annex 7: SWH Presentation at the Workshop (to be added)
Figures
Figure 1: Electrical consumption per sector
Figure 2: Electrical consumption per end user
Figure 3: Climatic zones and solar radiation in Lebanon
Figure 4: Evacuated tube solar collector
Figure 5: Flat plate collector
Figure 6: Projected progress of the Program- Phase 1 (2011-2014)
Figure 7: Potential of SWH installed (m2) and energy saved (TOE): 2011-2020
Figure 8: Environmental Impacts of the Program
Figure 9: Institutional structure of management the Proposed Program
Figure 10: Economic impact of phase 1
Figure 11: Total potential of energy saved and CO2 avoided (2011-2020)
Figure 12: Interaction between main stakeholders for Collective SWH Systems
Figure 13: Total potential of energy saved and CO2 avoided Collective sector
Figure 14: Concept of the CDM
Figure 15: CERs issued by sector
Figure 16: Steps in the CDM project cycle
Figure 17: Approximate time line to CDM activity registration
Tables
Table 1: Electricity Tariff
Table 2: Global Radiation Data for Lebanon
Table 3: Market shares of Solar Panels in Lebanon in 2008
Table 4: Economic rate of return calculation
Table 5: Cost of the Proposed Program (US$ „000)
4
ACRONYMS
ABL: Association of Banks in Lebanon.
ALMEE : Association Libanaise pour la Maitrise de l‟Energie et l‟Environnement.
AUB: American University of Beirut
BDL: Banque Du Liban (Central Bank of Lebanon).
CDM: Clean Development Mechanism.
CO2: Carbon Dioxide
CRES: Center of Research of Solar Energy of Greece
EDL: Electricité Du Liban (Lebanese Electric Utility).
EU: European Union.
GEF: Global Environment Facility.
GHG: Greenhouse gas
GIZ : German Technical Cooperation (formerly GTZ)
GoL: Government of Lebanon.
IRI: Industrial Research Institute.
KW: Kilo Watt = power
KWh: Kilo Watt hour =energy.
LCEC: Lebanese Centre for Energy Conservation
LIBNOR: Lebanese Standards Institution.
LSES: Lebanese Solar Energy Society.
LU: Lebanese University
MEDEREC: Mediterranean Renewable Energy Centre (Italy).
MEW: Ministry of Energy and Water (of Lebanon).
MW: Mega Watt (power);
MWE: Mega Watt electric
MWh: Mega Watt hour (energy=1,000 KWh)
NEEAP: National Energy Efficiency Action Plan for Lebanon
NEEREA: National Energy Efficiency and Renewable Energy Action
SWH: Solar Water Heater
TOE: Tons Oil Equivalent
UNDP: United Nations Development Program
US$: American Dollar
5
Large Scale Solar Water Heater Market Development Program in
Lebanon
(Prepared under a World Bank-supported activity with the Lebanese Ministry of Energy and
Water and the Lebanese Center for Energy Conservation)
EXECUTIVE SUMMARY
1. This Report has been prepared by a World Bank team1 working under the “Lebanon
Energy Efficiency Standards and Regulations for Buildings” Project (P113858), which is
providing support to the Lebanese Ministry of Energy and Water (MEW) and Lebanese
Center for Energy Conservation (LCEC), a national energy organization for Lebanon which
is affiliated to the MEW to help design and implement national level projects and programs
in the areas of end-use energy conservation and renewable energy.2 One of the activities of
this World Bank-funded project was focused on solar water heaters (SWH). This SWH-
related activity was to provide support to LCEC in the following aspects: (i) Review the
existing SWH standards and regulations with regard to the quality of available local
manufactured systems, imported systems and installation practices and compare them with
best practices; (ii) Assess the potential financial and economic benefits through the use of
SWHs compared with conventional electrical heating in the context of a market where
electricity prices are subsidized and a parallel large scale private-sector managed back-up
generation market exists; (iii) Identify gaps in the existing standards and develop
mechanisms to enforce the standards; (iv) Develop a framework for scaling up the large
scale deployment of SWHs in the residential sector; and (v) Propose financial mechanisms
including specific incentives and potential carbon/climate financing, and propose regulations
that are appropriate to the Lebanese context, that will support the scaling up of the
installation of SWHs on either a voluntary or mandatory basis.
2. The Report draws mainly from findings of a World Bank mission to Lebanon in
February 2011, which met with LCEC and several other relevant stakeholders (a complete
list is provided in Annex 2), and review of existing reports published by LCEC and other
institutions and development partners in Lebanon. In this context, the February 2011
1 The World Bank team which conducted this work and prepared this Report comprises of Simon Stolp (Senior
Energy Specialist and Task Team Leader, World Bank Lebanon Country Office), Ashok Sarkar (Senior Energy Specialist, World Bank, Washington DC), and Naceur Hammami (Senior Energy Efficiency and Renewable Energy Consultant, World Bank). For questions and more information, please contact Simon Stolp at <[email protected]> 2 LCEC supports the Government of Lebanon to develop and implement national strategies that promote the
development of efficient and rational uses of energy and the wide spread application of renewable energy at the consumer level. LCEC is a financially and administratively independent body, and operates under the direct supervision of the Minister of Energy and Water. LCEC is also legally registered at the Ministry of Interior.
6
mission had focused mainly on further developing the understanding of the SWH sector, and
examining the practical and technical issues and constraints, barriers that exist specifically in
the Lebanese market, with respect to the large scale SWH market development in Lebanon.
The work presented in this report also draws from international experiences with different
approaches for increasing the deployment of SWHs, and the financial incentives and
mechanisms used therein. The overall objective of this Report is to develop a practically
implementable large scale SWH program in Lebanon, taking into account the Lebanese
market context and drawing upon international best practices and adapting them
accordingly.3
3. The benefits of large scale installation of SWHs in Lebanon are many. First, it will
help reduce consumer energy bills, which is especially important when consumers rely on
expensive back-up generation (due to unreliable grid supply) and it will improve the
reliability/availability of hot water supply. Second, from the utility Electricity du Liban
(EDL)‟s perspective, large scale implementation of SWHs will reduce electricity demand
and thus decrease the pressure on EDL‟s power system to supply. Reduced energy demand
will lead to fuel savings and a reduction in electricity generation operating costs, which EDL
is unable to recover from consumers due to subsidized tariffs and high technical and
commercial losses (>30% average). Finally, the fuel savings from the reduction in energy
demand on the grid will lead to lowered import bills and less fiscal pressure on the
Government on Lebanon.
4. Under the directions of MEW, and with support from United Nations Development
Program (UNDP) and other partner and stakeholders, LCEC has led the demonstration of
pilot level efforts to promote the use and installation of SWHs in Lebanon over the past
several years. Existing reports and studies estimate the total potential for SWH in the
residential sector to be 1.6 million sq. meters (m2).4 The Government of Lebanon through
MEW, and in cooperation with the Banque du Liban (Central Bank of Lebanon, BDL) has
embarked on a national energy efficiency program in 2009 to provide financial support to
various measures, including a solar thermal component for households and institutions
(hotels, hospitals, apartment buildings, others). The LCEC is responsible for coordinating
this program with BDL, and other stakeholders including private banks, associations, the
private sector and NGOs. In this context, several pilot schemes have been developed with
the help of development partners from several countries such as Greece, China, Spain, and
3 The main findings of the Report are being presented to LCEC and other stakeholders at a Workshop on
“Energy Efficiency Study in Lebanon: Opportunities and Investments”, on June 27, 2011 at World Bank Office in Beirut, Lebanon. The presentation is attached in Annex XX of this Report. 4 Source: ALMEE
7
international, and national organizations and institutions such as the European Union, GTZ,
and ADEME, in addition to the continued support from UNDP.5
5. In Lebanon a commercial market for both domestically manufactured as well as
imported SWHs has developed over the years, as the uptake of SWHs have been particularly
good in the case of large institutional end-users such as hospitals, hotels, etc. The SWH
market has grown at the annual rate of 15%, and the total number of SWH manufacturers,
importers and installers has increased from only seven in 2007 to about 70 in 2011. The
Lebanese Standards Institution (LIBNOR) has elaborated mandatory energy performance
standards for SWHs (mandatory standards for energy efficiency in appliances also extend to
other end-use appliances such as compact fluorescent lamps). However, the overall
cumulative uptake in individual residential households remains low. This is due to the
relatively lower level of awareness about the benefits of SWH amongst residential
consumers, the high initial cost of SWHs (average cost of US$1,300 for 200 liter SWH
including installation), and the absence of substantial financial incentives available so far.
To address the latter barrier, the European Union (EU)-funded incentive program, managed
by LCEC through the National Energy Efficiency and Renewable Energy Action
(NEEREA), set up through BDL, provides some grants and limited subsidies through two
major existing financial incentive mechanisms to support the growing market for SWHs in
residential households and also in the institutional sector. First is the credit at subsidized
rates (interest rate: 0%), and the second scheme is a grant of US$ 200 for residential SWH
installations (only for first 7,500 units) and of 15% of the capital cost for community
facilities and institutions. With the existing incentive programs and EU funding of Euros 15
million, the overall target for scaling up SWH installations in the residential sector is
190,000 m2 for an estimated 50,000 households by year 2014. UNDP continues to play a
important role as it provides support to the LCEC and its programs.
6. The number of residential households in Lebanon is estimated to be 1.2 million, out
of which more than 70% live in high rise apartment buildings in urban areas. Only about
30% are estimated to live in individual houses in non-urban areas. The majority of
residential apartment buildings in urban areas (such as in Beirut) accommodate a large
number of individual households (could be up to 50 individual households in a 10-storey
building) which results in a situation that, in each building, the available flat roof space
required for the installation of SWHs per household is very limited. Based on the analysis
and discussions with various stakeholders during the mission, the space available for SWH
installations is estimated to be up to 30% of the existing flat roof area only, because of other
competing needs on the roof space (for instance, parabolic antennas for television receivers,
advertisement billboards, roof-top air conditioning units and other equipments, which are
5 LCEC was created in 2002 as a project financed by the Global Environment Facility (GEF) and the Lebanese
Ministry of Energy Water, under the management of the United Nations Development Program (UNDP). Since then, LCEC has gradually established itself as an independent technical national center of expertise in energy efficiency and renewable energy, although it continues to be supported by UNDP, as indicated in the Memorandum of Understanding signed between MEW and UNDP on June 18, 2007.
8
also considered as valuable assets). In addition, the number of individual solar SWHs, in the
existing buildings in particular, will also be constrained by the structural quality of roofs to
be able to withstand extra loads and also by the orientation and height of buildings (where
the roof of a lower building may be shaded by an adjacent taller building). This roof space
limitation can be overcome to some extent by using high quality SWHs with much higher
conversion efficiencies (due to better materials and insulation). However these are even
more expensive and go beyond the existing SWH standards established by LIBNOR.
7. Taking into consideration the technical aspects and constraints, the realistic and
commercial market potential for individual SWH systems in the residential sector is
estimated to be 700,000 m2, for about a total of 200,000 households across Lebanon. This
potential is quite significant given the energy deficit situation in a country which is a net
importer of petroleum products which is used to generate electricity and meet its electricity
demand. Attaining 100% saturation of this market of 700,000 m2 of SWH installation in
200,000 residential households would require an estimated investment of US$ 300 million.
Much of these investments would have to be incentivized through grants and subsidies. In
addition, there will be GHG emission reductions which can potentially be monetized and
realized through the Clean Development Mechanism (CDM) based revenues in the global
carbon finance market which, in turn, could be used as incentives to individual residential
households. The estimated annual energy savings will be about 70,000 tons of oil equivalent
(toe).6 Based on an oil price of US$ 100 per barrel, the payback period for this investment is
around five (5) years.
8. While on one hand, the incentives and promotion will assist to realize a maximum
potential for individual residential household based SWH systems in 200,000 households,
the emphasis should also be put on further promoting the implementation of “collective”
SWH systems. The collective SWH systems could target an additional 300,000 m2 in
institutional buildings, hotels, hospitals, colleges, universities, etc. Most institutional
consumers such as hotels, hospitals and universities will be able to install SWHs even
without much financial incentives, by using their own funds or through financial incentive
programs available for large consumers through the various schemes of BDL. However, in
case of the residential sector, a “collective” system could be more complex in terms of
financing, and more in terms of implementation due to the constraints of limited roof space
and rights, as well as structural challenges of existing buildings. In residential sector,
collective SWH systems could be targeted for new buildings. This approach could be
implemented through intermediary service provider (similar to an energy service company-
ESCO) which could bundle the individual household‟s hot water needs and set up
community or apartment buildings- level collective SWH systems to provide guaranteed hot
water “service” to a group of individual households. This latter approach would be
especially relevant for new high rise residential buildings yet to be built.
6 Which results in an estimated savings of 1.4 million toe over a 20-year period, as the minimum average life
of SWHs is considered to be 20 years.
9
9. Based on the analysis in the Report, it is estimated that 200,000 households (700,000
m2 of SWH) and another 300,000 m2 for collective SWH systems is the practically
achievable potential in Lebanon. To achieve this potential, however, efforts will be required
on strengthening the implementation approach which could be led by LCEC (on behalf of
MEW). Actions will be required on multiple fronts in order to tap into the enormous
untapped potential for large scale SWH deployment across Lebanon. Additional financial
incentives accompanied by a strong quality assurance (in line with the minimum energy
performance standards of SWHs) and extensive consumer awareness program will be the
keys to successfully realize this potential for SWHs in Lebanon.
10. For the program to develop a large-scale SWH market in Lebanon (referred to as the
“proposed program” throughout the Report), which would lead to the practical realization of
the large potential of 1 million m2 of SWH installation (considering for both collective
SWH systems and individual residential household SWH systems) in Lebanon, several steps
and a multi-pronged efforts will be required. These efforts should be implemented under the
overall directions of MEW and leadership of LCEC, and with continued support from the
main local stakeholders through a Technical Committee (comprising of stakeholders such
as LIBNOR, BDL, IRI, ALMEE, private sector and NGOs) along with both financial and
technical assistance from various development partners (such as UNDP, EU, World Bank,
and bilateral donors). The actions and interventions under the proposed program, at several
levels, are summarized in the following paragraphs.7
(i) Institutional Coordination and Leadership: LCEC, as an affiliated institution to the
MEW and with initial support from UNDP and the EU, has effectively initiated the efforts to
systematically promote SWHs in Lebanon, with many successful pilot scale efforts. LCEC
has also received support from LIBNOR in establishing minimum energy performance
standards for SWHs and from BDL in designing and implementing financial incentive
programs (with funding from EU, etc.). As a national energy agency under the MEW,
LCEC is in an ideal position to lead and coordinate the proposed program. However,
strengthening the institutional role of LCEC, with additional resources and capacity
building, to help coordinate and lead the implementation of the proposed program would be
critical for successful deployment of SWHs on a larger scale in Lebanon. There are many
government and private sector stakeholders in the SWH sector in Lebanon, and LCEC‟s
proposed role to lead the coordination should involve them. LCEC has to transition from its
current technical advisory role limited to pilot and demonstration projects to a much bigger
and proactive coordinating and implementation role, in the overall context of the large scale
implementation challenges in the SWH sector. Under the proposed program, it is suggested
that LCEC should continue to strengthen its active stakeholder engagement and
consultations, that would lead to increased ownership of the program by all relevant entities.
Financing schemes would have to be coordinated mainly by BDL along with the local
commercial banks under its purview, even as funds may become available for additional
7 These actions are described in detail in various sections of the main Report.
10
financial incentives needed to achieve the full potential under the proposed program. As a
part of this proposed program, the Project Management Unit located within LCEC could be
supported through a Technical Committee, comprised of the key local stakeholders like the
BDL, LIBNOR, ALMEE, IRI and with representation from the private and NGO sectors.
(ii) Technical Standards and their Implementation: In addition to minimum energy
performance standards for SWH developed by LIBNOR, technical specifications for high
quality SWHs should be developed and made available to all stakeholders. This would help
in easy understanding of the minimum quality requirements for SWHs. The establishment of
a compliance system, infrastructure, and procedures for quality control, monitoring and
evaluation and a control system to reduce the risk of leaks and fraud has to be established,
along with the efforts. This should be accompanied by the establishment of standard and
transparent procedures for the evaluation of the eligibility of products, suppliers and
installers.
(iii) Capacity Building and Dissemination: One of the key factors of the proposed
program is to strengthen of human resources and their capacity within LCEC and amongst
other key stakeholders (at strategic and operational levels) for enabling a large scale
successful deployment of SWHs across various sectors in Lebanon. An assessment of the
capacity building needs is required as a first step. Next step would be to add more dedicated
program staff in LCEC who will be responsible for managing and implementing the
proposed program, running the Project Management Unit, and for coordination with all
stakeholders. Finally, the national strategy for the dissemination of SWHs to be
implemented by LCEC should be shared with and supported by all relevant stakeholders.
Finally, a comprehensive training program for technicians and installers and a consumer
promotion and awareness program are required. The dissemination program should be not
only focused on the technology and benefits, but also include information about institutional
and financial mechanisms for individual and collective SWH systems.
11
Large Scale Solar Water Heater Market Development Program in
Lebanon
Main Report
(Prepared under a World Bank-supported activity with the Lebanese Ministry of Energy and
Water and the Lebanese Center for Energy Conservation)
1. Introduction
Lebanon is a net importer of oil. Its electricity supply mainly depends on imported fossil
fuels (mainly from Algeria and Kuwait): approximately 2 million tons of fuel oil and 1.2
million tons of diesel per year are imported. This represents approximately 76% of all oil
imported.
In 2009 the total installed electricity capacity was 2,312 MW (2038MW thermal production
and 274 MW hydropower plant production) out of which only 1,875 MW were available
(1685 MW thermal plants and 190 MW hydropower plants).. The electricity generation is
fueled mainly by heavy fuel oil and combined cycle gas turbine units. The available
generation capacity is insufficient to meet the national electricity demand which is 2000-
2100 MW in 2009. Unreliable grid based electricity supply leads to widespread power
outages, resulting in load shedding, blackouts and brownouts which has in turn spurred the
widespread use of back-up generators, based on diesel. These diesel generators are very
inefficient and contribute to increase in imports of petroleum products, local air pollution
and global green house gas emissions. The utility Electricity du Liban (EDL) is unable to
recover its electricity supply costs and is running into financial losses.
The recent study concluded by the World Bank8 found that the introduction of solar water
heating in residential buildings in Lebanon would have significant benefit in terms of saving
on household energy demand, with corresponding benefits in Government savings on the
cost of supplying electricity. That study estimated that through the use of an individual
residential solar water heater (SWH), a household's total annual energy consumption can be
reduced by up to 42%. The implementation of 290,000 individual residential SWHs could
potentially reduce the electricity demand in Lebanon by about 100 MW, regardless of the
grid's technical and commercial losses. Installation of SWHs in residential buildings is so far
voluntary, and its further dissemination is hindered by the relatively low quality of SWHs
available on the Lebanese market; the lack of awareness, high initial cost (US$1,300 for a
200 liter SWH system) and only limited number of financial incentives and mechanisms and
the lack of effective implementation mechanisms. The Lebanon Center for Energy
Conservation (LCEC) is currently leading the efforts in the area of SWHs in Lebanon,
8 World Bank: Energy Efficiency Study in Lebanon (December 2009)
12
including supervising the execution of two pilot projects that will install 600 SWHs
provided by the Chinese Government, and a further 350 residential SWHs provided by the
Greek Government, in a pilot project village. More widespread installation of SWHs will,
however, have to rely on the introduction of appropriate regulation, the systematic
development of a market for SWHs, and the introduction of a compliance system for
standards for SWHs to ensure appropriate levels of quality control in SWH installation,
accompanied by financial incentive and innovative implementation mechanisms.
Over the years, LCEC has also developed potential financing mechanisms for SWHs
through the Bank du Liban (Central Bank of Lebanon, BDL), with a subsidy of US$ 1.5
million from the Ministry of Energy and Water (MEW) and with the financial support of the
European Union (EU), and continued technical support and grants from the United Nations
Development Program (UNDP). The implementation of standards and regulations remain
weak and the system needs to be strengthened. Better enforcement of norms and standards
for SWHs developed by the Lebanese Standards Institution (LIBNOR), along with effective
financial mechanisms can help scale up the penetration of SWHs on a large scale are
necessary. In this context, it is also critical to have a robust and effective institutional
structure and governance mechanism that would make the implementation of policies and
programs more effective. In this context, it will also be crucial to review the organization
and definition of roles and responsibilities of different stakeholders, to refine the analysis of
the economic and financial impact of the solar program, to identify the capacity building
needs and to develop promotion, awareness generation and information dissemination
strategies.
This Report is prepared on the basis of a study that was conducted by the World Bank team,9
working under the “Lebanon Energy Efficiency Standards and Regulations for Buildings”
Project (P113858), which is providing support to the MEW and LCEC, a national energy
organization for Lebanon which is affiliated to the MEW to help design and implement
national level projects and programs in the areas of end-use energy conservation and
renewable energy.10
This SWH-related activity was to provide support to LCEC in the
following aspects: (i) Review the existing SWH standards and regulations with regard to the
quality of available local manufactured systems, imported systems and installation practices
and compare them with best practices; (ii) Assess the potential financial and economic
9 The World Bank team which conducted this work and prepared this Report comprises of Simon Stolp (Senior
Energy Specialist and Task Team Leader, World Bank Lebanon Country Office), Ashok Sarkar (Senior Energy Specialist, World Bank, Washington DC), and Naceur Hammami (Senior Energy Efficiency and Renewable Energy Consultant, World Bank). For questions and more information, please contact Simon Stolp at <[email protected]> 10
LCEC supports the Government of Lebanon to develop and implement national strategies that promote the development of efficient and rational uses of energy and the wide spread application of renewable energy at the consumer level. LCEC is a financially and administratively independent body, and operates under the direct supervision of the Minister of Energy and Water. LCEC is also legally registered at the Ministry of Interior.
13
benefits through the use of SWHs compared with conventional electrical heating in the
context of a market where electricity prices are subsidized and a parallel large scale private-
sector managed back-up generation market exists; (iii) Identify gaps in the existing
standards and develop mechanisms to enforce the standards; (iv) Develop a framework for
scaling up the large scale deployment of SWHs in the residential sector; and (v) Propose
financial mechanisms including specific incentives and potential carbon/climate financing,
and propose regulations that are appropriate to the Lebanese context, that will support the
scaling up of the installation of SWHs on either a voluntary or mandatory basis. The main
findings of the Report are being presented to LCEC and other stakeholders at a Workshop
on “Energy Efficiency Study in Lebanon: Opportunities and Investments”, on June 27, 2011
at World Bank Office in Beirut, Lebanon. The presentation is attached in Annex XX of this
Report.
2. Electricity Supply and Demand Situation
Lebanon is a net importer of oil, with 98% of its primary energy being imported. The total
supply of primary energy was 6.735 million tons oil equivalent (TOE) in 2009 with an annual
average increase of primary energy demand of 3.5%.11
The share of energy sources are as
follows: 26% of gasoline, 42% of diesel and 20% of fuel oil. The remainder of energy comes
from LPG, hydro power, wood energy, coal and others.
Beyond biomass energy, mainly in the form of fuel wood and charcoal, the contribution of
renewable energies such as solar thermal and photovoltaic, wind and hydropower to the
national energy balance is limited to less than 2 % in the overall energy balance.
In terms of the share of total demand for gasoline, the transport sector alone accounted for
45% gasoline demand, residential and service sector 30% and the industrial sector consumed
25% mainly in the form of diesel in 2009. The total electricity generation is 15,000 GWh, of
which independent power producers generate 3000 GWh or 30% of the total electricity
production, the rest being produced by EDL (12,000 GWh). The national electrification rate
exceeds 98% but electricity generation only accounts for 18% of the final energy
consumption. The grid-based electricity from EDL costs about 12.5 US cents per KWh to
generate. However, the average electricity tariff for consumers is 9.4US cents per kWh.
Due to poor reliability of supply and insufficient generation capacity of EDL, Lebanese
consumers depend largely on alternative sources of electricity supply provided by
independent, private sector owned small generation systems. The tariff charged by the latter
is much higher, with an average of 18 US cents per kWh. Electricity billing is done in
tranches of 100 KWh, the first three tranches are billed at prices still lower than the marginal
cost of electricity generation.
11
Source: ALMEE – Solar Energy in Lebanon.
14
Table 1: Electricity tariffs in Lebanon (2010)
Electricity tariff (LV)
Cosumption
(kWh/month)
Tariff (LL/kWh) Tariff (€/kWh)
<100 35 0.026
101-300 55 0.041
301-400 80 0.060
401-500 120 0.090
>500 200 0.150
Small industry 115 0.086
Agriculture 115 0.086
Public 140 0.105
Electricity tariff (MV)
Industry 320 Pic demand 0.240
Hotel 112 Normal 0.084
80 Night 0.060
Source: EDL(2010)
The electricity generation mix of EDL in 2009 consisted of 85% from thermal power plants
with the generation efficiency below 35%. Of the remaining generation by EDL, 5.1% came
from hydro sources, and 4.9% and 4.3% were imported from Syria and Egypt respectively.
3. Role and Importance of Hot Water Heaters
3.1. Electrical consumption per sector
The electricity generated by EDL is consumed by the following sectors: residential 29.2%,
industrial 26%, commercial 8.8%, governmental 16.1%, technical losses and others 19.1%12
Figure1:Electrical consumption per sector
12
Understanding energy use in the industrial sector of Lebanon, a preliminary of the ALI/LCEC survey result 2006
Residential 29%
Commercial 9%
Technical losses and others
19%
Governmental 17%
Industrial 26%
Electrical consumption per sector
15
According to the United Nations framework Convention on Climate Change (UNFCCC) , in
Lebanon, the electricity consumption of the residential sector represents 30% of the total
electrical energy consumption. The following figure shows the electricity consumption per
end user in the residential sector
Figure 2: Electrical consumption per end user
Water heating in households and in the service sector (hospitals, hotels and services)
consume more than 25% of the total electricity consumed by these sectors.
Based on a study by the engineering department of Saint Joseph University , 70% of
residential households use electricity to heat their water, while 25% use diesel and 5% use
gas, wood, solar or other sources of energy. Another study conducted by the American
University of Beirut (AUB) shows that 60% of households use electric water heaters, 31%
use diesel powered water heaters and 9% use natural gas, wood and solar energy (1%) to
heat water. (Chedid, 2002). A more substantial urban sample covering more than 500
households indicated that 2.8% of households use solar thermal collectors for water heating,
either alone or with a backup system while 82% were found to use electricity (Houri &
Korfali, 2003).For a typical household, with a 200 litre water heater the yearly electricity
consumption for water heating amounts to around 3,200 kWh. Residential water heating
water using electricity is sub-optimal in Lebanon for several reasons:
Frequent power cuts from grid based electricity from EDL cause interruptions in
hot water supply
The cost of producing and supplying electricity for the utility (EDL) is high
(average of about 12 US cents per kWh) while the tariff recovery is low (see table
on tariff).
Low quality of electric water heaters with regard to insulation and hot water storage
makes the water heating process highly energy inefficient;
Lighting (9%)
Heating (30%)
Water heating (21%)
Refrigerator &freezers (8%)
Cooling (14%)
Television (3%)
Cooking (2%)
Others (13%)
16
Most of the existing electric water heaters being used in households have poor performance
in terms of energy efficiency due to the following reasons:
Inadequate or low quality insulation of water tanks,
Absence of any system of temperature regulation to maintain water temperature (i.e.
the temperature is usually above 70°C),
Absence of programming to optimize electricity use during off-peak hours.
Considering the fact that the useful lifetime of a standard electric water heater is quite high –
that is, 10 to 13 years – it is necessary to find ways to improve the use of the existing
electric water heating equipment, through the following means to reduce heat loss and
improve energy efficiency:.
A possibility for programming and limited temperature storage, adapted device
distribution and implementation through professional electricians should be
mandatory.
Electric water heaters being sold in Lebanon should comply with high standards
specifically with regard to better insulation - applicable for any kind of hot water
storage The high insulated tanks are more expensive in terms of initial costs, but pays
back in the long run, with the energy saved by avoided heat losses. A compulsory
label/certification should be introduced to promote high quality hot water tanks.
According to a study conducted by ALMEE also, the high marginal cost of electricity
production through thermal generation by EDL favors SWHs.
4. Solar radiation
Lebanon belongs to a geographical area with a high solar potential where the average annual
number of hours of sunshine is 3000 hours with an annual average potential of 2 200 kWh /
m2
and daily global radiation varying from 4 to 6 kWh/m2.
The information provided by three meteorological stations located in different regions shows
that the monthly average of global horizontal radiation is hardly different in these zones
while it varies significantly over the course of the year..
Table 2: Global Radiation Data for Lebanon
(in Wh/m2, 3 years means 1968-1990 based on Lebanese Climatic Atlas)
Station Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Abde 2044 3089 3875 6095 6464 7344 7035 6822 5312 3588 2734 2115 4715
Ksara 2518 3625 4943 6214 7702 8840 8758 7949 6762 4849 3424 3507 5683
Beirut 2308 3191 4380 5496 6461 7208 7018 6424 5380 4247 3004 2317 4793
17
Figure 3 : Climatic zones and solar radiations in Lebanon
(source CEDRO Xavier Vallvé published by UNDP, report on Thermal Standards for Buildings)
This solar potential should be sufficient to cover all (or at least 80%) of domestic and
collective demand of hot water. The use of electricity as energy to heat water is not
justifiable economically. Direct production of thermal hot water from fuel might reach
>66%. With a „free fuel‟ alternative such as the sun it makes sense to support the installation
of SWH, at least for economic reasons, as this will:
Reduce the electricity demand and therefore decrease the need for installed capacity
and/or improve day-to-day supply
Reduce EDL‟s deficit by reducing electricity consumption
This is because the cost of using solar energy for hot water heating comes an equivalent of
2.5 US cents per kWh, which is much lower compared with 12.5US cents for electric water
heaters operated on grid electricity from EDL and even more expensive, if supplied by
privately-operated generators. The payback period for the investment into a high quality
SWH is estimated at 2.5 years when compared to electric water heating using electricity
supplied by a privately-owned generator, and about 7 years when compared to electric water
heating using electricity supplied by EDL.
5. Market Availability of SWH
Lebanon already has experience with renewable energy and energy efficiency projects.
Several studies were conducted and pilot projects undertaken for the promotion of
renewable energy technologies and energy efficiency measures and devices.
18
To date several studies have addressed issues related to the estimation of the potential for
renewable energy and energy efficiency, the energy situation, the environment and
sustainable development, treatment and recovery of waste, energy and climate change,
energy saving in transportation and the industry, etc..
Pilot projects mainly focused on solar photovoltaic systems, solar thermal energy, wind
energy, energy efficient lighting, SWHs, and small scale hydropower.
The Lebanese SWHs market grows by 15% per year since 2007. Five installers/
manufacturers/ importers were active in Lebanon in 1988, 40 in 2008 and about 83 in 2011.
Table3: Market shares of solar panels in Lebanon in 2008
% Lebanon Australia China France Germany Greece Italy Turkey UK
Flat plate collectors 33 5 5 14 9 5 0 24 5
Evacuated tube
collectors
16 4 44 4 8 0 4 16 4
Source: LCEC Solar Thermal Market Survey 2010
Turkish imports (flat plate) and Chinese imports (evacuated tube) are big competitors to
Lebanese manufacturers as they offer more competitive prices. A testing facility for SWHs
is already operational at the IRI/LU. SWHs will have to comply with the required standards
before being sold on the market.
Figure 4 : Evacuated tube solar collector Figure 5 : Flat plate collector
The certification /quality label for SWH devices and their installation is key success factors
to avoid bad references, under performances and in worst case rip off.
The list of solar thermal companies (SWH) compiled by LCEC (February 2011) is attached
in Annex 1 of the present report.
6. Technical and Commercial Potential for SWHs
6.1. Solar Water Heater Technologies
19
Hot water heated by the sun is used in many ways. While perhaps best known in a
residential setting to provide domestic hot water, solar hot water also has industrial
applications, e.g. to generate electricity. Designs suitable for hot climates can be much
simpler and cheaper, and can be considered an appropriate technology for these places. The
global solar thermal market is dominated by China, Europe, Japan and India.
In order to heat water using solar energy, a collector, often fastened to a roof or a wall facing
the sun, heats working fluid that is either pumped (active system) or driven by natural
convection (passive system) through it. The collector could be made of a simple glass
topped insulated box with a flat solar absorber made of sheet metal attached to copper pipes
and painted black, or a set of metal tubes surrounded by an evacuated (near vacuum) glass
cylinder.
Heat is stored in a hot water storage tank. The volume of this tank needs to be larger with
solar heating systems in order to allow for bad weather, and because the optimum final
temperature for the solar collector is lower than a typical immersion or combustion heater.
The heat transfer fluid (HTF) for the absorber may be the hot water from the tank, but more
commonly (at least in active systems) is a separate loop of fluid containing anti-freeze and a
corrosion inhibitor which delivers heat to the tank through a heat exchanger (commonly a
coil of copper tubing within the tank).
Residential solar thermal installations fall into two groups: passive (sometimes called
"compact") and active (sometimes called "pumped") systems. Both typically include an
auxiliary energy source (electric heating element or connection to a gas or fuel oil central
heating system) that is activated when the water in the tank falls below a minimum
temperature setting such as 55°C. Hence, hot water is always available.
Therefore, solar water heating for washing and bathing is often a better application than
central heating because supply and demand are better matched. In many climates, a solar hot
water system can provide up to 85% of domestic hot water energy.
6.1.1. Types of Solar Water Heating Systems
Solar Water Heating systems have been used around the world for a long time. However,
technologies have evolved as the designs have gone through technical innovations in
several different countries. SWH have been used widely in Greece, Turkey, Tunisia,
Australia, Japan, Austria and China.
6.1.1.1. Direct and indirect systems
a) Direct ('open loop') passive systems use water from the main household water
supply to circulate between the collector and the storage tank. When the water in the
collector becomes warm, convection causes it to rise and flow towards the water storage
20
tank. They are often not suitable for cold climates since, at night, the water in the collector
can freeze and damage the panels.
Direct systems: (A) Passive CHS system with tank above collector. (B) Active system with pump and
controller driven by a photovoltaic panel
In a "close-coupled" SWH system design, the water storage tank is horizontally fixed just
above the solar collectors on the roof. No pumping is required as the hot water naturally
rises into the tank through thermosiphon flow.
Principle of operation: 1. Hot water outlet., 2. Hot water storage (Boiler). 3. Entry of water heated in the boiler.
4. Solar panel 5. Cold water inlet
In a "pump-circulated" system the storage tank is fixed on the ground below the level of the
collectors. A circulating pump moves water between the tank and the collectors.
b) Indirect ('closed loop') passive systems use a non-toxic antifreeze heat transfer fluid
(HTF) in the collector. When this fluid is heated, convection causes it to flow to the tank
where a passive heat exchanger transfers the heat of the HTF to the water in the tank.
SWH systems are typically designed to deliver a maximum amount of hot water throughout
the year. However, in winter weather, when temperatures fall below 30 deg. C, solar
insulation may not always be sufficient to deliver enough hot water. Then a gas-powered or
electric booster is used as a back-up system to provide the required hot water supply.
21
Indirect active systems: (C) Indirect system with heat exchanger in tank; (D) Drain back system with drain
back reservoir. In these schematics the controller and pump are driven by mains electricity
6.1.1.2. Passive and Active Systems
a) Passive systems rely on heat-driven convection or heat pipes to circulate water or
heating fluid in the system. Passive solar water heating systems cost less and have
extremely low or no maintenance, but the efficiency of a passive system is significantly
lower than that of an active system, and overheating and freezing are major concerns.
b) Active systems use one or more pumps to circulate water and/or heating fluid in the
system. Though slightly more expensive, active systems offer several advantages:
The storage tank can be situated lower than the collectors, allowing increased
freedom in system design and allowing pre-existing storage tanks to be used.
The storage tank can always be hidden from view.
The storage tank can be placed in conditioned or semi-conditioned space, reducing
heat loss.
Drain back tanks can be used.
Superior efficiency.
Increased control over the system.
Modern active solar water systems have electronic controllers that offer a wide-range of
functionality, such as the modification of settings that control the system, interaction with a
backup electric or gas-driven water heater, calculation and logging of the energy saved by a
SHW system, safety functions, remote access, and various informative displays, such as
temperature readings.
22
6.1.1.3. Passive Direct Systems: ICS and CHS
a) An Integrated Collector Storage (ICS or Batch Heater) system uses a tank that acts
as both storage and solar collector. Batch heaters are basically thin rectilinear tanks with a
glass side, facing south. They are simple and less costly than plate and tube collectors, but
they sometimes require extra bracing if installed on a roof (since they are heavy when filled
with water suffer from significant heat loss at night since the side facing the sun is largely
uninsulated, and are only suitable in moderate climates.
An integrated collector storage (ICS) system
b) A Convection Heat Storage unit (CHS) system is similar to an ICS system, except
the storage tank and collector are physically separated and transfer between the two is driven
by convection. CHS systems typically use standard flat-plate type or evacuated tube
collectors, and the storage tank must be located above the collectors for convection to work
properly. The main benefit of a CHS systems over an ICS system is that heat loss is largely
avoided since (1) the storage tank can be better insulated, and (2) since the panels are
location below the storage tank, heat loss in the panels will not cause convection, as the cold
water will prefer to stay at the lowest part of the system.
6.1.1.4. Active Indirect Systems: Drain back and Antifreeze
a) Pressurized antifreeze or pressurized glycol systems use a mix of antifreeze
(almost always non-toxic propylene glycol) and water mix for HTF in order to prevent
freeze damage.
Though effective at preventing freeze damage, antifreeze systems have many drawbacks:
If the HTF gets too hot (for example, when the homeowner is on vacation,) the
glycol degrades into acid. After degradation, the glycol not only fails to provide
freeze protection, but also begins to eat away at the solar loop's components: the
collectors, the pipes, the pump, etc. Due to the acid and excessive heat, the longevity
of parts within the solar loop is greatly reduced.
23
Most do not feature drainback tanks, so the system must circulate the HTF --
regardless of the temperature of the storage tank -- in order to prevent the HTF from
degrading. Excessive temperatures in the tank cause increased scale and sediment
build-up, possible severe burns if a tempering valve is not installed, and, if a water
heater is being used for storage, possible failure of the water heater's thermostat.
The glycol/water HTF must be replaced every 3-8 years, depending on the
temperatures it has experienced.
Some jurisdictions require double-walled heat exchangers even though propylene
glycol is non-toxic.
Even though the HTF contains glycol to prevent freezing, it will still circulate hot
water from the storage tank into the collectors at low temperatures (e.g. below 40
degrees Fahrenheit), causing substantial heat loss.
b) A drain back system is an indirect active system where the HTF (almost always
pure water) circulates through the collector, being driven by a pump. The collector piping is
not pressurized and includes an open drain back reservoir that is contained in conditioned or
semi-conditioned space. If the pump is switched off, the HTF drains into the drainback
reservoir and none remains in the collector. Since the system relies upon being able to drain
properly, all piping above the drain back tank, including the collectors, must slope
downward in the direction of the drain back tank. Installed properly, the collector cannot be
damaged by freezing or overheating. Drain back systems require no maintenance other than
the replacement of failed system components.
6.2. Residential and tertiary Sectors.
The number of households in Lebanon is estimated at 1.2 million out of which over 70%
live in apartment buildings, mostly in big and small cities, and about 30% live in detached
houses, in particular in rural areas of the country. The majority of apartment buildings have
flat roofs, but most of the roof space is occupied by other equipment like satellite dishes,
billboards, air conditioning units, etc. . Given these space limitations and competing uses, it
is estimated that the available space to accommodate installation of SWHs is only 20% to
30% of the total roof surface. Furthermore, the number of individual SWHs that can
potentially be installed is also limited by the quality, structural strength, and durability of
roofs to withstand the additional weight of the water tank for SWHs.
Taking into consideration structure and modalities of residential housing sector in Lebanon,
the potential market for SWHs for the residential sector is estimated to be around 700,000
m213
, or about 200,000 households14
. This translates into a saving of electricity of 576 GWh
per year required for hot water heating. This potential is relatively high given the energy
13
Based on 100 000 SWH (200 l model) with collector area 2.2-2.4m2
/SWH and 100 000 SWH (300 l model) with 4.6-4.8m
2 /SWH.
14 Base on the available technical potential is 20 to 30% of the total roof surface or of the total number of
households
24
situation of the country as a net importer of oil to produce electricity. Switching to solar
water heating could not only enhance Lebanon‟s energy security but also reduce the GHG
emissions from the electricity sector and local air pollution, in addition to monetary savings
for the consumers in the long run ..
7. Assessment of Resources for Local Manufacture, Imports, Costs and Installation
Practices for SWHs
Although SWHs are currently available in limited quantities and are being used by less than
5% of the consumers, the market has evolved over the years. However, the widespread
penetration of SWHs faces many barriers. LCEC and MEW have institutionalized programs
for promoting the use of SWHs in Lebanon with some success. However, in addition to the
scope for strengthening effective implementation of standards and regulations (issued by
IRI) for maintaining the quality of SWHs in the Lebanese market, there is a room for
improving the institutional framework and governance mechanism, and expand the
financial incentives program of BDL and LCEC. Many pilot projects have been
implemented for demonstrating the usefulness and impact of solar water heating, but most
use imported SWHs with not buildup of local capacity. In addition, several consumer
awareness campaigns have been conducted by LCEC and MEW. These need to be continued
to provide more consumer awareness and information campaigns for consumers, and
training and capacity building opportunities for SWH system installers and other industry
stakeholders. In addition to the pilot programs based on grants, a limited number of SWHs
have been sold to few relatively affluent customers.
In Lebanon, several providers exist for SWHs. However, for most of these suppliers and
distributors, selling SWHs is not the core business but just one of the several areas of focus.
These entities depend entirely on imported stocks of SWHs with no local manufacturing. As
a result, there is also little emphasis on high quality installation and after-sales servicing and
maintenance. Annex1 provides a list of suppliers of SWHs.
The proposed Large Scale Solar Water Heater Market Development Program (referred to as
the “Program” hereinafter) therefore suggests emphasis on the propagation and deployment
of high quality, locally manufactured or imported and well installed solar equipment that
comply with standards. This will require a multi-pronged effort relying on technical
assistance, certification of local suppliers and installers, accompanied by a comprehensive
consumer awareness campaign. The development of a large market for SWHs in Lebanon
would be strongly dependent on the success of these activities and the regulatory actions and
efforts described in this document.
8. LCEC’s and Other Donor Funded Initiatives in the Area of SWHs
Even though there are barriers to the market development for residential SWHs on a large
scale in Lebanon, the realization of the potential is critical for reducing energy costs to
consumers, enhancing Lebanon‟s energy security by reducing its dependence on imported
fossil fuels, and reducing its contribution to greenhouse gas emissions.
25
The Government of Lebanon through the Ministry of Energy and Water and the Central
Bank of Lebanon has undertaken since 2009, a national energy efficiency program that
includes a solar thermal component for households and institutions (hotels, hospitals,
apartment buildings, others). The LCEC is responsible for coordinating this program, along
with other stakeholders such as domestic private banks, associations, private sector firms
and NGOs. In this context, several pilot schemes have been developed in the context of
cooperation with several countries such as Greece, China, Spain and international and
national organizations such as, the European Union, UNDP, GIZ, ADEME, etc.
In 2010, the LCEC launched an initiative to develop a SWH market in Lebanon with
UNDP- GEF support, with ambitious goals. Lebanon is one of the six countries supported
by the GEF program called “Global solar water heater market transformation and
strengthening initiative” which targets 1,050,000 m² of SWH by 2020 in Lebanon, i.e.
867,000 MWh electrical energy saved per year, which would have been generated through
fossil fuels and resulting in 2,600,000 tons CO2 emissions avoided.
Under this GEF effort, the Government‟s goal is to deploy SWHs in the majority of
buildings, supported by two main activities, to be promoted by LCEC:
Improvement and development of new minimum energy performance standards,
and system of energy efficiency labels for solar hot water heaters.
Introduction of appropriate financing mechanism(s) to support the installation of
SWH through NEEREA.
The National Energy Efficiency and Renewable Energy Action (NEEREA) is a national
vehicle/mechanism/platform built on Circular 236 of the Central Bank of Lebanon (BdL)
issued on November 25, 2010. NEEREA is dedicated to support the financing of energy
efficiency and renewable energy projects all over Lebanon and aims at the effective
implementation of these projects by Lebanese commercial banks through offering both
financial and technical support. The United Nations Development Program (UNDP), in
cooperation with the BDL and the European Union Fund, through the NEEREA offers
interest-free long-term loans to energy efficiency and renewable energy projects with full
risk guarantee. Under the direct guidance of the MEW and the BDL, the development of the
new financing mechanisms for SWHs and the NEEREA has been conducted This
mechanism is a brand name for the circular n°236 with a main slogan: “Finance your energy
efficiency renewable energy or green building project through Lebanese banks with 0%
interest rate and a repayment period of 5 years”.
LCEC believes that NEEREA will leverage investments of around 100 Million USD in the
coming 5 years, resulting in:
- Direct money savings to the energy bill of beneficiaries (plants, facilities, houses)
- Direct money savings to the EDL, national treasury
- Direct environmental benefits to Lebanon
- Creation of new jobs in the business
26
- Creation of a national momentum in a new market (positive economic activity)
NEEREA Beneficiaries are: houses, residential building, hospitals, hotels, commercial
office, mall and industrial plant.
Systems: Energy efficiency: (lighting, motors, heating, cooling,) and Renewable energy
(solar, wind, hydro, geothermal).
The specific milestones accomplished and proposed steps under the National Energy
Efficiency Action Plan (NEEAP) include promotion of SWHs. The accomplishments and
plans are as follows:
UNDP and LCEC have conducted an assessment of the use of SWHs and analyzed
the market performance.
The UNDP, in cooperation with the Central Bank of Lebanon and the European
Union Fund, the NEEREA have offered interest-free long-term loans to energy
efficiency and renewable energy projects with full risk guarantee.
400 SWHs distributed through a pilot project in 2010.
350 SWHs installed in beginning of 2011.
Subsidies provided for 7,500 SWHs of US$200 each, with a total subsidy financing
of US$1.5 million.
Provision made available of 0% interest rate 5-year loans for purchase and
installation of SWHs, with a total funding of US$ 20 Million available.
A testing facility for SWHs established, in cooperation with the Industrial Research
Institute (IRI). The testing facility is already operational from the beginning of
2011.
Market survey conducted on the use and barriers for use of SWHs to support the
market transformation in the country by the beginning in 2011.
Establishment of a web-based information clearinghouse for solar water heating,
That will be updated regularly to become a central reference.
Launch of a nationwide awareness campaign based on “A solar heater for each
household” initiative. Awareness campaigns and promotion campaigns to educate
consumers and dealers.
Organization of a SWHs trade seminar by the end 2011.
Provision of technical support to SWH manufacturers and suppliers to improve
their product quality in 2011.
Coordination with the Ministry of Finance for the implementation of financial
incentives for the import of SWHs by mid-2011.
Submission of the draft law incorporated into the building code to the Government
of Lebanon (Adoption targeted by 2012).
Promotion of solar water heating systems for collective use and water heating in big
facilities.
27
9. SWH Standards in Lebanon
The Lebanese Standards Institution (LIBNOR) adopted European standards that are
already approved by the European Committee for Standardization for solar systems:
a. Solar Energy Vocabulary: BS EN ISO 9488 2000 Solar Vocabulary.pdf
b. Thermal Solar Systems and components- Custom built systems – Part1: General
requirements: DD ENV 12977 1 2001 Thermal solar systems and components
Custom Built Systems 1.pdf
c. Thermal Solar Systems and components- Custom built systems – Part2: Test
methods : DD ENV 12977 2 2001 Thermal solar systems and components
Custom Built Systems 2.pdf
d. Thermal Solar Systems and components- Custom built systems – Part3:
Performance characterization of stores for solar heating systems: DD ENV
12977 3 2001 Thermal solar systems and components Custom Built Systems
3.pdf
10. Implementation Mechanisms for SWH Standards and Associated Regulatory
Approaches to Strengthen Compliance
LIBNOR is responsible for the formulation of standards for the SWHs. However, the
effective implementation of these standards will require systems and infrastructure in place
with capacity building and training of various participating stakeholders. :
1. Lebanese standardization of solar equipment;
2. Qualified human resources to ensure application of and compliance with the
standards;
3. A specialized laboratory for testing and verifying the technical specifications of the
equipment;
4. Technical specifications and design parameters that are in accordance with the
minimum program requirements laid out in the standards.
These technical specifications should be available within the management unit of the
Program in LCEC and shall include Technical Specifications and criteria for eligibility
of solar collectors and SWH under the Program and a technical file for Solar Collectors
and SWH.
11. Review of Financial Incentives available for SWHs in the Lebanese Market
28
Among the 14 actions listed in NEEAP to improve and promote energy efficiency and
renewable energies, one of the initiative focuses on SWHs for Buildings and Institutions.
Two major financial mechanisms are put in place by the Central Bank of Lebanon to support
the growing market for SWHs in households and in the institutional sector, to be
implemented in coordination with the domestic private sector banks. First one is a program
of providing credit at subsidized rate (rate: 0%) for the purchase of individual and collective
SWH systems the second initiative is for a grant of US$ 200 per individual SWHs. This
subsidy is limited to 7,500 SWH units.
The SWH program for the residential sector aims at the installation of 190,000 m2 by 2014.
This program is jointly managed by LCEC, BDL, private banks, suppliers of SWHs and
consumers. UNDP and EU funding is available (15 million Euro) at the BDL to finance energy
efficiency projects. The collective solar installations are eligible for this funding.
The Intermediate Circular No 236 sent by the Governor of the Bank of Lebanon to other
banks about the decision No 10572, of November 25, 2010 relating to the amendment of the
basic Decision No 7835, of June 2, 2001 (statutory reserve) attached to the basic Circular No
84. Copy of Intermediate Circular No 236 (Annex2).
12. Proposed Programmatic Framework for Large Scale Deployment of Individual
SWH systems in the Residential Sector
12.1. Short-term and Long-term goals
As discussed in earlier sections of this Report, given the roof space limitations and
competing uses, it is estimated that the available space to accommodate installation of
SWHs is only 20% to 30% of the total roof surface in the case of residential sector.
Furthermore, the number of individual SWHs that can potentially be installed is also limited
by the quality, structural strength, and durability of roofs to withstand the additional weight
of the water tank for SWHs.
12.1.1. Phase 1 Program (2011-2014) for Short term Goals
The objective of the proposed Program is to enable the widespread deployment of high
quality SWHs in the residential and institutional sector (hotels, hospitals, schools, etc) of
Lebanon. The program will be implemented in two phases. Phase 1 will adopt an approach
driven primarily by financial incentives that relies on grant and credit schemes and which
would enable the consumers to purchase and install solar water heating systems for
households and the institutions (hotels, hospitals, schools etc). The Phase 1 initiative will
also include the strengthening of standards for SWHs and establishment of implementation
mechanisms required for quality control procedures to ensure the availability of high quality
SWHs in Lebanese market which would foster and promote trust between the equipment
suppliers and consumers.
29
The Phase 1 of the proposed Program will support the long-term development of the SWH
sector in Lebanon in a sustainable manner through:
a) The establishment of appropriate financing mechanisms for the sustainable development
of SWHs;
b) Market Promotion of SWHs through local commercial banks ;
c) Encouraging financial institutions to support operators in the sector (suppliers,
manufacturers, installers, importers, etc.),
d) The establishment of a monitoring and evaluation system
e) The establishment of a compliance mechanism for adherence to minimum technical
requirements to ensure the quality of products on the market, as per the standards
established by LIBNOR.
It is expected that by the end of Phase 1, SWHs market transformation would have taken
place. Phase 2 will be market-driven wherein a larger number of high quality SWHs will be
deployed by consumers on their own.
The Phase 1 of the proposed Program is targeted to achieve the deployment of 190,000 m2
of
SWH in the residential sector by 2014. This program is expected to produce primary energy
savings of 19,000 of TOE per year (or 220,000MWh /year). Figure 1 illustrates the gradual
deployment of SWHs during the period 2011-2014. By the end of the Phase 1 program
period, that is, by 2014, a total of 190,000 m2 would be installed.
Figure 6: Projected progress of the Program- Phase 1 (2011-2014)
12.1.2. Phase 2 Program (2015-2020) for Long term Goals
As discussed earlier in the Report, out of the total number of 1.2 million households in
Lebanon of which 70% live in apartment buildings, only 20 to 30% of the roof space is
0
10000
20000
30000
40000
50000
60000
2011 2012 2013 2014 2015
Num of Households
Total m2 installed
Primary Energy Saved per year (TOE)
Cumulated primary energy saved(TOE)
30
estimated to be available for the installation of SWHs. This accounts to about 700,000 m2
of SWH, which could serve the hot water needs of about 200,000 individual households.
The associated annual energy savings are estimated to be 70,000 TOE. As shown in Figure
7, the deployment of about 500,000 m2 of SWHs is expected to be rolled out between 2015
and 2020. By the end of 2020, cumulative energy savings is estimated to be 489,240 TOE.
Considering the average useful lifetime of the SWHs, the energy savings is estimated to be
1.4 million toe during the lifetime of the equipment.
Figure 7: Potential of SWH installed (m2) and energy saved (TOE): 2011-2020
(a) SWH installed (m2 )
(b) Potential of energy saved per year (TOE)
(c) Cumulated primary energy saved (2011-2020)
0
20000
40000
60000
80000
100000
120000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Num of Households
Total m2 installed
0
20000
40000
60000
80000
100000
120000
Total m2 installed
Primary Energy Saved per year (TOE)
31
The environmental impact of this program is significant, it could exceed 1.5 million tons of
CO2 avoided cumulative over 2011-2020.
Figure8: Environmental Impacts of the Program
0
20000
40000
60000
80000
100000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Cumulated primary energy saved (TOE)
Cumulated primary energy saved(TOE)
0
50000
100000
150000
200000
250000
300000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Tons of CO2 avoided/year
Tons of CO2 avoided/year
32
12.2 Conditions of Eligibility of Suppliers, Installers and Products
The key success elements of the sustainability of the proposed Program are the quality of
the SWHs, and various stakeholders ranging from equipment suppliers to installers to
inspectors have specific roles to play. To ensure that the quality of SWHs is high the
following provisions are proposed to be incorporated into the Phase 1 of the program. To be
eligible for the proposed Program, all transactions must involve products and participants that
are previously approved by the program, and must be conducted by participating operators
that are also pre-approved.
Eligible Products: To be eligible, the products must appear on the list of certified products
previously approved by the program. Eligible products are solar collectors and unitary systems
of heating hot water. These products must meet the provisions of the "specifications on the
eligibility of products" which will be consistent with the minimum energy performance
standards established by LIBNOR.
Eligible Operators: Suppliers of SWHs must meet the stipulations of the "specifications on
the eligibility of suppliers to the proposed Program” to supply the SWHs to the individual
residential households. The eligible operators will also be able to obtain the available financial
incentives, on behalf of the residential households. These participating suppliers can be local
or foreign manufacturers, or assemblers or distributors, with offices established in Lebanon
(under national laws and procedures) or have authorized national representatives in case of
imported products.
Installers of individual and collective systems. Installers must meet the provisions of the
"specifications on the eligibility of installers”.
Supervisors and technical controllers for collective solar systems must meet the provisions
of "specifications on the eligibility of supervisors and technical inspectors”.
The eligibility criteria for the suppliers, installers and products is described in Annex 3.
12.3. Supporting Financial Incentives and Innovative Mechanisms
In order to encourage the uptake of SWHs in Lebanon, the Government has already
implemented several recommendations that provides financial incentives for the development
of this sector. These include: the removal of import tax and customs duties for solar
technologies and the establishment of financing mechanisms to support the adoption of new
technologies. The latter was described briefly in an earlier section of this report. The
proposed Program aims to further remove barriers to the development of a SWH market such
as its high initial costs compared to electric and gas water heaters and the long (and potentially
33
unattractive) payback periods for such investments. The financing mechanisms in proposed
program phase 1 will support all eligible beneficiaries in the target sectors intending to
purchase and deploy SWHs.
The realization of the total estimated potential of 700,000 m2 for SWH installation by 2020
(Phase 1 and 2) requires an estimated total investment of $ 300 million. The total energy
savings are estimated at about 70,000 tons of oil equivalent (toe) per year or 1.4 million toe
during the lifetime of the equipment. Based on a price of $ 100 $ US per barrel, the payback
of investment is around 5 years.
The phase 1 of the proposed program which targets 200,000 m2 of solar water heating, will be
supported partly by financial incentives already in existence such as through the NEEREA and
BDL. As a part of NEEREA, dedicated funds of US$1.5 M has been mobilized by the GoL, to
be added to US$3 M from other donors to promote the installation of 190,000 m² SWHs by
2014 (50,000 m²/year). Based on the request of the Ministry of Energy and Water, the
Government of Lebanon committed to invest 1.5 million USD to implement a financing
mechanism to subsidize residential SWHs and offer no-interest loans (Council of Ministers
decision No. 59, on March 10, 2010).
The specific financing mechanism includes a grant of USD 200 per SWH installation
combined with a 5-year tenured, zero interest loan. This loan is distributed by four
participating commercial banks under the auspices of the BDL. The private sector commercial
bank is a free access one and half time the amount of equity borrowed to the customers. The
US$200 grant is given as a deduction of the last reimbursement. The MEW, in cooperation
with the Central Bank of Lebanon, offers to the concerned bank a grant of US$ provided that
the supplier is among the eligible companies specialized in selling and installing solar water
heating systems and approved by LCEC. In return, the statutory reserve of any participating
private sector bank is reduced by 150% of the balances of loans granted to finance the
purchasing of solar water heating systems, provided that the interest equals 0% and that the
overall purchasing value is settled in monthly installments extending over five years.15
The consumer awareness campaign about this financial incentive program includes
advertisement through media (TV spots, newspapers, etc.), and through billboards and posters
in/on public transportation (buses) and was co-financed by several participating local private
sector banks such as Fransa Bank, Banque Libano-Francaise and Credit Libanais.16
Three new
banks have joined the program recently, to use the new financing mechanism. These are
Banque Audi, Byblos Bank and Intercontinental Bank of Lebanon (IBL).
15
Refer article n°18 of Intermediate Circular No 236 Addressed by la Banque De Liban to Banks Attached is a copy of Intermediate Decision No 10572, of November 25, 2010 relating to the amendment of Basic Decision No 7835, of June 2, 2001 (statutory reserve) attached to Basic Circular No 84.) 16
Fransa Bank and Banque Libano-Francaise took immediate advantage of the newly
developed mechanism while Credit Libanais has not offered it so far.
34
LCEC has developed a list of eligible SWHs, and any customers is eligible to participate in
this financial incenetive program and apply for a grant as long as the SWH model to be
installed is certified and labeled by LCEC (cf. Solar Water Heaters report).
Since its launch by the LCEC in 2010, the operation US$ 200 grant subsidy scheme has been
quite successful. As of 31 January 2011, more than 2,000 candidates applied at commercial
banks to benefit from this financial incentive scheme.
12.3.1. Mechanics of the BDL/ NEEREA Financial Incentive Scheme
The financial incentive systems supported by NEEREA through BDL are based around two
types of mechanisms tailored to different category of consumers, which intend to purchase
and install SWHs:
1. For individual SWHs
A grant of U.S. $ 200 for the 7,500 first individual SWHs installed (total funds
corresponds to US$ 1.5 M).
A credit for 80% of the SWH value with an interest rate of 0%, and 5-years
loan tenure, to end use customers.
2. For collective solar water heating facilities in buildings, hospitals, hotels,
schools, etc.
The BDL, with support from the European Union, offers a grant through
participating banks to subsidize the loans to end-use consumers, for projects
with value of loan not exceeding LBP 1.5 billion (equivalent of US$ 1
million). This grant is targeted to finance small and medium-enterprises to
support environmentally-friendly projects in the energy sector (including large
collective solar water systems), the maturity of which shall not exceed ten
years, along the following lines:
15% of the value of the loan granted to non-productive sectors, whose interest
rates are not subsidized by the Lebanese State.
5% of the value of the loan granted to productive sectors, whose interest rates
are subsidized by the Lebanese State.
The Central Bank of Lebanon benchmarks, upon request, the value of the grant for the
concerned project following the technical investigation of the project performed by a
specialized institution, in coordination with LCEC in case of energy efficiency projects. The
grant amounts allocated to the project are disbursed through the participating bank, the
provider of the loan, upon a request submitted following the completion of the works
35
pertaining to saving energy, renewable energy, and green buildings, etc., and based on
documents proving the good execution of these works.17
12.4. Institutional Coordination and Management for the Implementation of the
SWH Scale Up Programs
The first phase of the proposed program is scheduled to last for four years (2011-2014).
During this period, the program will be supported by BDL through their participation in
financing the subsidy to end users for the purchase of SWHs, as described above. At the
institutional level the program involves the participation of all relevant actors, such as:
12.4.1. Role of Ministry of Energy and Water
Ministry of Energy and Water: which is in charge of the national policy development and
formulating strategies for the energy sector. Its role in the proposed Program will mainly be to
provide overall directions, and support at the national and international level, in order to
ensure that all economic, social and environmental objectives are met.
12.4.2. Role of Lebanese Center for Energy Conservation
The LCEC is the central and lead stakeholder in the proposed program, with overall
coordination responsibility of its design, implementation, monitoring and evaluation. In this
context, LCEC has a much broader role to play in terms of a national-level agency, whose
mandate shall be to implement the Government‟s policy and facilitate its implementation with
regard to energy efficiency and renewable energy sources through the study, design,
promotion and coordination of programs, including the proposed program.
As part of the broad-based mandate, the LCEC shall have the responsibility to:
(i) Coordinate all programs aimed to promote and exploit energy resources in the country
(conventional energy, renewable energy sources, substitute energy sources, energy
saving equipment, etc);
(ii) Conduct studies on energy supply and demand, evaluation and programming of actions
for energy harnessing (rational use of energy and new and renewable energy sources)
and more generally any studies in line with its mandate;
17 Participating private sector banks in this scheme shall obtain the consent of the BDL over
any amendment of the loan, the value of which exceeds LBP 30 million (equivalent of
US$20,000), granted to the financing of environmentally friendly projects, of the maturity, the
ceiling, the currency or the settlement table of loan. They shall also notify the BDL of any
other amendments on the loan.
36
(iii) Promote and implement projects to demonstrate innovative techniques and processes in
the area of energy, rational use of energy, new and renewable energy sources for central
administration, local public communities or others;
(iv) Promote training actions in the area of energy, rational use of energy, new and
renewable energy sources;
(v) Organize sensitization campaigns for consumers of energy in all its forms;
(vi) Contribute to technical and scientific development in the area of rational use of energy,
renewable and substitute energy sources;
(vii) Collaborate with relevant national organizations to set up standards of energy efficiency
for equipments and materials using energy as well as products contributing to energy
saving;
(viii) Identify investment projects requiring profit and incentive measures granted by
Government and aimed at developing the energy sector, rational use of energy, use of
renewable and substitute energy sources prior to their use;
(ix) Make proposals to the supervising Ministry on policies relating to rational use of energy
sources, use of renewable and substitute energy sources;
(x) Centralize and disseminate data and information on production, processing, distribution
and energy consumption through: design, orientation and coordination of works relating
to collection of statistical data on production, processing, distribution and consumption
of energy;
12.4.3 Role of Project Management Unit within LCEC
In the proposed program, a dedicated Project Management Unit will be in charge of managing
and coordinating the program. It will be established within LCEC, and with endorsement from
the MEW, will provide the interface between the different actors involved in this program.
This Unit will also facilitate and supervise the proposed program‟s progress. The major
activities to be implemented by this Unit are detailed below.
(i) Providing necessary inputs and support to all stakeholders represented in the
Technical Committee for its smooth functioning, including the Committee‟s help to
the Project Management Unit within LCEC to review of applications submitted by
suppliers and installers to become associated with the proposed program and work
37
under the initiative. It is anticipated that the Chairman of the Committee will oversee
the proposed Program Management Unit in LCEC. The Committee will be responsible
for ensuring all approved suppliers and installers are compliant with the standards
required by the proposed program.18
(ii) Planning activities related to achieving optimal performance of the program,
including facilitation of the program within government through awareness raising,
training of installers and information exchange between all stakeholders of the
program
(iii) Organizing training for installers and technicians for maintenance of the
installed systems and developing a promotion and awareness campaign for the
proposed program and SWH technology to increase consumer awareness.
(iv) Maintaining complete records of all grant applications submitted by suppliers
including type of system, products used and type of grant applied for.
(v) Monitoring and evaluation of the program progress.
(vi) Management of disputes due to non compliance with the technical
specifications, granting certificates of eligibility to suppliers, installers and products.
(vii) The establishment of a real time computer system to manage the grants to
providers and the collection of funds from customers, ensuring their transfer to
suppliers within the proposed program.
(viii) Forwarding information about SWH customers (name, meter number, address,
other references) to the relevant suppliers. Holding regular meetings with stakeholders
on the assessment of the progress of the solar program.
(ix) Developing proposals and requests for funding in cooperation with the
Ministry of Finance to be submitted to donors and development partners
12.4.4. Role of BDL through commercial banks
(i) To award grants and loans to suppliers and recover loans made to customers
through the commercial, private sector banks;
(ii) To be represented in the Technical Committee for granting licenses to suppliers
and installers, monitoring the status of program development.
12.4.5. Role of Others stakeholders (LIBNOR, IRI, LSES, GBC, ALMEE, NGOs)
18 The Committee may invite any other institution to provide support to the work.
38
The other stakeholders will support the proposed program in many ways.
(i) To contribute for the development of proposed program
(ii) To provide training and information to staff involved in this program,
(iii) To provide suppliers with necessary information about technology, standards,
clients (customers),
12.4.6. Role of Suppliers of SWHs: manufacturers, importers with networks of
installers
In addition to these stakeholders there are numerous additional stakeholders who will be
involved in the program including banks, consulting firms and consulting engineers,
12.4.7. Role of Clients: Are households or consumers (hotels, hospitals, ..) who are
eligible for the proposed program.
Figure 9: Institutional structure of management of the proposed program
Technical Committee BDL +Banks
Suppliers
Installers
Product
Others specific
dossiers
Studies
Planning
Approval
Capacity building
Promotion
M&E
Others
MEW
Grant Eligibilities
LCEC
Management of the
Program
39
12.5. Financial and Economic Analysis: Economic rate of return of SWH
As shown below in Table 1, the average prices of SWHs with a capacity of 200 liters and 300
liters are $ 1,200 and $ 1,800 respectively. Without the subsidies, the payback period for the
acquisition of a SWH (in place of conventional electric water heater) remains high, with
payback period of 6.75 years for 200 liters model and 5 years for 300 liters. This is due to the
high cost of primary energy saved in Lebanon. Using the funding mechanism (credit +
subsidy) through the BDL scheme with participating local banks, the payback periods are
estimated to be approximately 5.6 years for the 200 liters and 4.5 years for 300 liters SWH
models. This is bound to attract customers to join the program and install their own SWHs.
Two ways to calculate SWH economic rate of return.
a. Based on primary energy saved (tons of oil equivalent) and the international
price per barrel
Table 4 : Economic rate of return calculation
SWH(200 L) SWH(300 L)
Cost ($) 1200 1800
Area (m2) 2.4 4.8
Energy Saving per m2/year (TOE) 0.1 0.1
Energy Saving per SWH (TOE/year ) 0.24 0.48
Cost of TOE(based on barrel cost 100$ ) 740 740
Cost of quantity of energy saved (TOE) per year ($) 177.6 355.2
Payback period (Years) 6.75 5
Cost with subsidy ( 200$/SWH for 7500 first SWH sold) 1000 1600
Payback period with subsidy(Year) 5.6 4.5
b. The substitution of electricity as compared with an electric water heater and
based on the price of local kWh (Lebanon)
Average solar radiation: 5 kWh/m2
/day
Annual solar radiation: 1825 kWh/ m2
/year
Family (2 to 3 persons) needs of hot water: 200 l/day
Efficiency of SWH: 40%
Energy production of SWH: 730 kWh/ m2 /year
SWH area (200 l model): 2.4 m2
Final energy production of SWH (200l): 1752 kWh/ year
Primary energy substituted (Electric water heater η=90%): 1946 kWh
Cost of energy saved (substituted): 1946 kWh *0.094$= 183 $/year
Payback period: 1200 $/183$/year= 6.6 years
40
12.5.1. Cost of Proposed Program (Phase 1: 2011-2014)
The National Energy Efficiency Action Plan intends to improve and promote energy
efficiency and renewable energies over a period of four years. One of the initiatives of this
Plan aims at promoting the use of SWHs, mainly in the residential sector, with the aim to
facilitate the installation of 190,000 m2 of solar collectors by 2014. The number of households
benefiting from this program is estimated to be 52,000 or 25% of the estimated potential
market.
The total number of SWHs to be installed during this period is estimated at 52,000 units. It is
estimated that the size (capacity) of SWH units will be split evenly between the two standard
sizes: 200 liters and 300 liters capacity.
Figure 10: economic impact of phase 1
The SWH units will be deployed in a phased manner over the Phase 1 period, with 52,000
households.
0
10000
20000
30000
40000
50000
60000
2011 2012 2013 2014 2015
Num of Households
Total m2 installed
Primary Energy Saved per year (TOE)
Cumulated primary energy saved(TOE)
41
Table 5: Cost of the Proposed Program (US$ ,000)
Year 2011 2012 2013 2014 Total (2015)
Number of Households 10000 12000 15000 15000 52000
Number of SWH 10000 12000 15000 15000 52000
( Average m2/SWH based on 50% of
SWH 200 L and 50% SWH 300 L)
3,6 3,6 3,6 3,6 3,6
Total m2 installed 36000 43200 54000 54000 187 200
Final Energy saved MWh/m2/year 0,55 0,55 0,55 0,55 0,55
MWh saved 19800 23760 29700 29700 35640
Cumulated saved MWh 19800 43560 73260 136620
Primary energy saved: TOE/m2/year 0,15 0,15 0,15 0,15 0,15
Primary Energy Saved per year (TOE) 5400 6480 8100 8100 9720 Cumulated primary energy saved(TOE) 5400 11880 19980 37260 Average cost of SWH 1000 $US 1,5 1,5 1,5 1,5 1,5
Investment 1000 US $ 15000 18000 22500 22500 78000
Cost of TOE 1000 $ 0,73 0,73 0,73 0,73 0,73
Cost of cumulated Energy Saving 1000$ 3942 8672,4 14585,4 20498,4
12.5.2. Financing Scheme of the Proposed Program
12.5.2.1. Benefits to Consumers and Utility
Based on an the average estimated cost of $1200 and $1800 respectively per installed 200 liter
or 300 liter SWH respectively, the investment required to implement the proposed program
over 4 years is estimated at US$78 million, including the budget for providing loans to the
beneficiaries of approximately US$ 62.4 million , as described below. The cumulative
primary energy savings during this period is estimated at 37,260 TOE, and the cumulated final
energy savings is 136,620 MWh.
a. For the end use consumer, cost effectiveness and viability of solar systems is
calculated on the basis of the following assumptions:
• The price per KWh sold by EDL at 9.4 US cents..
• The price of SWHs is $ 1,200 for 200 liter systems and $1,800 for 300 liter
capacity,
• Annual production (saving) of final energy is 550 KWh per m2 of SWH.
• The lifetime of the SWH is 20 years;
• The interest rate for credits for the purchase of a SWH is 0%.
• Maintenance costs are negligible.
The payback period is quite high is around 5-7 years
42
b. For institutions, banks and the government, profitability of the program is calculated
based on the following assumptions:
• Energy conversion efficiency of thermal plants is around 35%
• Conversion efficiency of electric water heaters is around 80%;
• The price of oil is at an average of $ 100 per barrel;
• The amount of primary energy is 3 times larger than the minimum amount of final
energy used for heating water
• Price of kWh produced by EDL is around 12.5 US cents
• The price per m2 of SWHs installed is around $ 500.
The payback of the investment is 5 to 7 years
During the Phase 1 (first four years), the proposed program would allow EDL to achieve
cumulative energy savings equivalent to 300 GWh (primary energy) or 28080 TOE a saving
in foreign currency of $ 21 million and a reduction in its budget deficit.
12.5.2.2. Environmental benefits
As mentioned above, Lebanon is generating the bulk of its electricity from imported oil
through thermal power plants. This import is growing continuously due to the growing
electricity demand. This contributes significantly to the costs of supply of EDL.
This program will contribute to achieve significant cumulative energy savings of about 28080
TOE and 84 000 tons of CO2 avoided. in first 4 years (upto 2014).
Based solely on the proposed program about (190,000m2) 187,200 m2 of SWHs installed in
Phase 1, it would achieve annual savings in primary energy of about 28,000 TOE up to 2014
and prevent the emission of 84,000 tons of CO2 into the atmosphere annually.
13. Proposed Programmatic Framework for Large Scale Deployment of Collective
SWH systems in residential and tertiary sectors in urban areas
Collective solar water heating in public institutions, including hotels, is widespread on a
global level. Lebanon has some experience with these collective solar systems, through a few
pilot operations. Large scale collective SWH systems should be promoted on a larger scale for
collective housing (apartment buildings) and institutions such as hotels, hospitals, clinics and
health centers, university campuses, colleges and schools, sports centers, etc.. Hot water needs
are estimated to be more than 40 million cubic meters in these buildings and institutions per
year.
It is estimated that many of the of collective systems can be applied to new residential
buildings. However, most institutional consumers such as hotels, hospitals and universities
will be able to install SWHs even without much financial incentives, by using their own funds
or through financial incentive programs available for large consumers through the various
43
schemes of BDL. However, in case of the residential sector, a “collective” system could be
more complex in terms of financing, and more in terms of implementation due to the
constraints of limited roof space and rights, as well as structural challenges of existing
buildings. In residential sector, collective SWH systems could be targeted for new buildings.
This approach could be implemented through intermediary service provider (similar to an
energy service company-ESCO) which could bundle the individual household‟s hot water
needs and set up community or apartment buildings- level collective SWH systems to provide
guaranteed hot water “service” to a group of individual households. This latter approach
would be especially relevant for new high rise residential buildings yet to be built.
There is only limited amount of available space for installation of solar collectors and water
heaters on residential buildings and their roofs, as described in the Report. It is estimated the
SWH collective installations will require a surface area of around 300,000 m2. The
realization of the collective program will require financial and institutional mechanisms
slightly different from the one related to individual SWHs.
13.1. Short and long term goals
The dissemination of large scale solar systems requires the several steps including:
(i) Collecting information on hot water needs and available surface area;
(ii) Conducting an energy audit of the institution to be equipped with solar water
heaters;
(iii) The completion of a technical and economic pre-feasibility study to make an
offer to the client.
(iv) Conducting a study for the execution of the installation;
(v) Mobilization of funding since the initial investment is generally much higher
than individual SWHs;
(vi) Obtaining the consent of all residents for apartment buildings who represent
more than 70% of the available technical potential.
(vii) Implementing the project.
13.2. Structure of the Program (eligibility of suppliers, installers,
products, etc.)
The eligibility of suppliers, installers and the product is similar to the mechanisms
described above for the eligibility of individual SWHs. However, in addition to the
described procedures, a technical and economic feasibility study will have to be
carried out by a specialized consulting firm and approved by LCEC before the
installation of the system, because such systems will not be of standard design and
specifications which can be generalized.
13.3. Financial Mechanism
44
The total cost of this program is estimated to be around US$ 100 million to be invested
over a period of 10 years. It requires tailor made financial and regulatory incentives
and additional incentives including exemption from customs duties and VAT on
imported equipment, local products and services.
Under the NEEREA program, the Circular 236 that is related to energy corresponds
with the line of credit managed by the BDL and companies involved in energy
conservation and renewable energy are eligible for loans. For new projects dealing
with collective SWH systems, loans of value greater than $ 20,000 could be granted by
the BDL after the approval of the LCEC. The repayment period could extend over a
period of 10 years from the end of the grace period ranging from 6 months to 4 years.
Loans smaller than $20,000, or equivalent, need approval from the Board of the
Central Bank
Loans with values of more than $20,000 need individual approval from the
Governor of the Central Bank.
13.4. Institutional and Stakeholder Responsibilities
The implementation of the program for collective SWH systems requires several steps
to be undertaken:
1. Technical study
2. Financial analysis
3. Proof of creditworthiness of the beneficiary customer
4. Eligibility of the product, supplier and installer
5. Credit approval
6. Project approval
7. Project implementation
8. Monitoring and evaluation
9. Disbursement of credit
10. Credit recovery
These activities must be performed by different key actors, namely: the beneficiaries,
consultancy companies, commercial banks, BDL, LCEC and other stakeholders.
LCEC has a critical role in the implementation of the program and its success. MEW
shall support and strengthen LCEC in its mission of coordinating the program so that
all stakeholders can be integrated fully into the proposed program.
45
Figure 12: Interaction between main stakeholders for collective SWH systems
13.5. Financial and Economic Analysis
Taking into account all these elements already mentioned above and with the support of
promotional campaigns, the objective of establishing 300 000 m2 of SWH up to 2020 could
be achievable. The estimated required investment is 104.3 million USD, and the cumulative
energy savings achieved during the period (2011-2020) are in the order of 137,700 TOE.
BENEFICIARIES
Service Companies
ESCO
Commercial Bank
BDL
LCEC
BDL
Consultancy Office Financial Analysis + Technical
study of the project
Financial review and
compliance with criteria
for granting credit
xamen financier et de conformité aux critères d’octroi du crédit
Approval the Technical Review and Eligibility
Final approval of Credit and Credit Granting
Review and
contract
preparation,
Review the client's file + agreement + formulating of the application
46
Based on a price of U.S. $ 100 per barrel, the monetary savings are estimated at U.S. $ 100.5
million, at a payback time of 10 years.
13.6. Benefits to Consumers and Utility
From consumer‟s standpoint, considering the cost of electricity of 12.5 US cents per KWh,
and the benefits of tax exemptions for equipment and services (for both imports and local
production), the payback time of 10 years is quite long. However, considering the other
benefits, such as the quality and reliability of service of hot water supply will be improved
(since power cuts will no longer affect the availability and reliability of hot water service).
The benefit of this project to EDL is substantial. With regard to electricity demand, is
estimated to produce more than 1,500 GWh cumulative energy savings during the period
2011-2020. This translates into reduction of greenhouse gas emissions by an amount
equivalent to 1,313 000 tons of CO2 over the lifetime of the project19
.
13.7. Environmental Benefits
Figure 13: Total potential of energy saved and CO2 avoided for Collective SWHs
19
Based on during period (2011-2020) cumulated CO2 avoided is 413 000 Tons. Beyond 2020, the quantity of CO2 avoided per year is 90 000 tons for 10 years more (life time of the project: 20 years)
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
Years
Cumulated primary energy saved(TOE)
Cumulated CO2 avoided(Tons)
47
14. CDM/Carbon Finance Potential Benefits, Methodologies, and Approaches
14.1 CDM and Evolution of Carbon Markets
The Clean Development Mechanism (CDM) provides the opportunity for developing
countries to participate in the global carbon market, and is currently the only option under
the Kyoto Protocol for developing countries to attract climate-friendly investment. The
CDM is also a source of climate finance for countries in the Middle East and North
Africa region20
, as illustrated by a growing number of projects under development in this
region21
. The rules and regulations of the UN climate regime will change after 2012,
when the first commitment period of the Kyoto Protocol comes to an end. Whether there
is another commitment period of the Kyoto Protocol, and if so, what rules will apply, is
yet to be agreed. New mechanisms to support climate financing in developing countries
are being discussed within the context of the international negotiations on a post-2012
agreement on the mitigation of climate change. Many countries are exploring
opportunities to understand and engage with these emerging climate finance mechanisms.
Figure 14 - Concept of the CDM
Source: IGES, CDM in Charts (2011)
The concept of the CDM is illustrated in Figure 14. A project located in a non-Annex I
country like Lebanon reduces greenhouse gas emissions more than would be the case in
20
The majority of current CDM projects are located in India and China (UNEP Risø Centre, CDM Pipeline. http://cdmpipeline.org/publications/CDMPipeline.xlsx 21
82 CDM projects located in the Middle-East have to date been submitted for validation, 56 of which in 2008 or later. UNEP Risø Centre, CDM Pipeline. http://cdmpipeline.org/publications/CDMPipeline.xlsx
48
the business-as-usual scenario (e.g. SWH replaces grid based electricity which would
generate GHG emissions). If registered as a CDM project, one 1 carbon credit, called a
Certified Emission Reduction (CER), is issued for each 1 ton of carbon dioxide
equivalent (1 tCO2eq). This CER can then be traded on the international carbon market,
also called the global “compliance” market.
Approximately than 3000 CDM projects have reached the stage of registration with the
UNFCCC, while around 7000 projects are in the CDM pipeline, as of April 2011.
Around 576 million CERs have been issued by the UNFCCC.
Figure 15: CERs issued by sector
Source – www.cdmpipeline.org (April 2011)
14.2 CDM Strategies and Approaches
With regard to eligibility of CDM projects, it is important to keep in mind that: The
emission reductions have to be additional to the emissions in the baseline or business-as-
usual scenario; Participation in a CDM projects is voluntary; The CDM host country has
to confirm that the project contributes to sustainable development of the country;
Emission reductions from nuclear facilities are not allowed; Only afforestation and
reforestation are eligible sequestration activities. Before being able to generate carbon
credits, CDM projects have to follow a range of steps within a pre-determined project
cycle. Figure 16 shows the main steps in the CDM process.
49
Figure 16 : Steps in the CDM project cycle
The process of preparing a CDM project for approval by the country‟s Designated
National Authority (DNA) and for validation and registration is rigorous and time
consuming. Figure 16 shows the different steps involved and the estimated duration of
each step. The lead time is highly dependent on: The Letter of Approval issuance process
of the DNA; The quality of the Project Design Document (PDD); Independent accredited
auditor (Designated Operational Entity) involved.
In general, the more carefully and better prepared the CDM documents are, the faster the
project will proceed through the registration process. In the figure below the average
times for each step are indicated. The total duration of the registration process depends on
the quality of the PDD, capacity of the project sponsor and the processing speed of the
DOE and the CDM secretariat. In 2010, the average CDM project took over 600 days to
progress from validation to registration.
Figure 17: Approximate time line to CDM activity registration
Preparing Document Validation
Request Registration
CDM Registration
4-6 Months 4-12 Months 4-6 Months Total: 12-24
Pr o j e ct de si gn
PD D D e v e l o pm e n t V a l i da ti o n
Registratio
n
I m pl e m e n ta ti o n
M e t h o d o l o g y
M o n i to r i n g I s s u a n c e o f c r e d i t s
L e tte r o f A ppr o v a l
V e r i f i ca ti o n
50
14.3 Post -2012 Carbon Markets
The parties to the UNFCCC are discussing a follow-up of the GHG emission reduction
commitments under the current commitment period of the Kyoto Protocol. The CDM is
dependent on the Kyoto structure and without an extension of the existing commitments, the
carbon market will change, altering the value of investments in CDM projects.
The European Union (EU) will continue to accept some CERs in the EU emission trading
scheme (EU-ETS) also post 2012. This is the largest compliance carbon market, reaching a
trading volume of 118.5 billion US$ in 201022
. The EU-ETS largely determines the price of
the carbon credits until 2020, for projects that: Are registered by 31 December 2012; Are
located in a Least Developed Country (LDC). As Lebanon is not an LDC, Lebanon CDM
projects need to be registered with the UNFCCC by 31st December, 2012
23. Considering the
lengthy lead times for registration, this effectively means that the validation of CDM project
documentation should start in the summer of 2011. Therefore, the preparation of the PDD
should start in the first half of 2011.
14.4 CDM Methodology for Solar Water Heaters
In April 2011, a new small-scale CDM methodology for SWH, AMS I.J, was approved by
the UNFCCC‟s CDM Executive Board.24
This category comprises the installation of
residential SWH systems and commercial SWH systems for hot water production. The SWH
systems displace electricity or fossil fuel that would otherwise have been used to produce hot
water.
There are two types of projects included in the new CDM methodology AMS I.J: retrofits
and new construction. For the purposes of defining baselines and other requirements the
following definitions apply: (a) Retrofit projects are SWH project(s) that replace existing
electric or fossil fuel based water heating system(s) in existing facility(ies); (b) New
construction projects are: (i) SWH project(s) installed in new facility(ies); (ii) SWH
project(s) installed in existing facility(ies) that, prior to the project implementation, do not
have installed water heating systems; (iii) SWH project(s) installed in existing facility(ies)
which require water heating capacity expansions; or (iv) Replacement of failed solar water
heating system(s). For retrofit projects, the baseline system(s) are the operating water
heating system(s) and fuel source (fossil fuel or electricity) that existed immediately prior to
the start of the SWH project activity. For new construction projects, the baseline system and
fuel source (fossil fuel or electricity) assumed to be used for water heating is one that is
demonstrated to be typical of new construction, for the given project activity as defined in
paragraph 2 (b), in the region of the project activity at the time of the start of the project
activity. Such demonstration shall include that typical water heating systems in the project
22
State and Trends of the Carbon Market, 2010. 23Article 11a of the DIRECTIVE 2009/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, of 23 April 2009, amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community
24 For the detailed CDM methodology, see UNFCCC CDM website <cdm.unfccc.int>.
51
region are not solar water heating systems. Emission reductions are calculated as the energy
savings that result from the project implementation multiplied by an emission factor for the
electricity and/or fossil fuel displaced.25
Energy savings that result from the project implementation of SWH CDM project shall be
determined using one of following methods and the choice of a method shall be made ex ante
and specified in the PDD and cannot be changed during the crediting period. These three are
not presented in order of preference. Project developers shall select one of these methods
based on the following guidelines: (a) Model based method; (b) System metering method;
(c) Stipulated energy savings method.
15. Capacity Building and Dissemination
15.1 Capacity Building
Standards for SWH Systems: The standards established by LIBNOR are
comprehensive and consist of documents which are divided into several volumes
covering solar energy vocabulary, solar thermal systems, components, and custom built
systems. Part1contains: General requirements; Part2 contains: Test methods; and Part3
contains: Performance specifications for water storage tanks for solar water heating
systems. The documents contain specific information and definitions and the application
of standards can lead to more effective implementation only when the users and
beneficiaries (suppliers of solar systems, installers) are trained well to be able to
understand the requirements for certificates or approvals. The smooth implementation
of the standards also requires training of operating personnel of LIBNOR, LCEC, etc.
This training will be organized during the program establishment phase and shall be
conducted by the organization who developed the relevant standards, or ouside
specialized agencies.
Program Management Unit of the Proposed Program at LCEC:
The staff of the Program Management Unit (within LCEC) will consist primarily of
engineers, planners and financial managers. It will be essential that staff be involved in
targeted training sessions held in other countries with more experience in this field.
The solar programs in these countries are managed by national institutions like LCEC
and collaboration should be sought from some of these countries in sharing
implementation experiences and building capacity in Lebanon.26
Personnel responsible
25
For calculating the emission factor for displaced fossil fuels, reliable local or national data shall be used. IPCC default values shall be used only when country or project specific data are documented to be either not available or not reliable. 26
Similar programs are developed in several countries, including France, Greece, Tunisia and Morocco.
52
for managing the program specially in LCEC could benefit from visits to and targeted
training within similar agencies like the Agency for the Environment and Energy Saving
(ADEME, France), the National Agency for Energy Saving (ANME -Tunisia), the
Center for Renewable Energy Sources (CRES, Greece), or the Agency for Renewable
Energy and Energy Efficiency and Moroccan Agency for solar energy (Morocco). An
exchange of experiences, best practices, management and planning tools, and
monitoring and evaluation approaches could also be implemented within the framework
of partnership agreements with these institutions.
Training of suppliers and installers of SWHs, engineering firms, architects and
other stakeholders.
This training must be practical and provided by installers of SWHs already experienced
in other programs, by experts from consulting firms and architecture firms operating in
similar programs.
During the first two years of the proposed program, it will be necessary for LCEC
(Program Management Unit) to organize training sessions for suppliers, installers and
local consultants. These sessions should be taught by expert trainers in:
a. Project feasibility studies
Equipment sizing
Development of technical specifications
Control and performance testing of SWHs
Installation of SWHs
Maintenance of equipment and facilities
b. Technical and economic evaluation of a facilities, projects and programs.
c. Awareness, promotion and communication techniques.
Assisting research institutions to equip themselves with performance and
quality testing equipment for SWHs, solar panels and tanks
Although the proposed program sets strict specifications for the importation of
SWHs, solar panels and tanks, it is envisaged that laboratories (IRI, AUB, etc.) will
be equipped to test all components of SWH. The laboratories can also provide
facilities for tests of locally produced products.
Supporting a training center provide professional training modules targeted
for installers, service technicians, plumbers and electricians.
53
Market development of SWHs in Lebanon requires the development of a specialized
local labour pool with the necessary skills to provide sustainable and high quality
customer service. This objective can only be achieved through the establishment of a
specialized training centre for renewable energies with a specific focus on solar products
and systems. One of the existing training centers could be strengthened through training
modules and by hiring trainers with extensive experience. It is recommended that the first
two training sessions are geared towards the training of trainers who will then go on to
provide further training for technicians in electricity, plumbing and equipment
installation.
Organizing two training workshops for engineering offices and architects for
the design of facilities, technical and economic studies for collective solar water
heating systems.
The first phase of the proposed program will focus primarily on the residential sector
(households). But the tertiary sector (hotels, hospitals, etc.) with collective solar water
heating systems is another important area for development. Provision of collective solar
water heating systems for the tertiary sector is more complicated than individual SWHs
for the residential sector because, in the case of former, each installation requires a
detailed individual study before implementation. In order to undertake this study, it will
be necessary to train engineers and architects in the design of small solar water heating
systems, in conducting technical and economic feasibility studies and in monitoring and
evaluation. In this respect at least two comprehensive training sessions will be organized
by LCEC with the assistance of international consulting firms.
15.2 Promotion, communication and awareness program
Promotion and awareness campaigns are aimed to provide the different stakeholders with
information on the proposed program: Its objectives, specific conditions, eligibility for
the program, its impact on the level of the consumers and the government and its
institutional and financial mechanisms. The target group are: commercial banks,
representatives of concerned institutions, NGOs, the private sector, the big consumers,
the donors and development partners.
The promotion campaigns is intended to:
• promote the financial mechanism specific to individual SWHs and collective SWH
systems ;
• promote solar equipment and demonstrate their economic and environmental benefits;
• provide procedural information about the steps involved, and the main stakeholders,
who can provide guidance, information, finance, supply and installation of equipment,
These campaigns shall include radio and TV spots, brochures and posters and the
organization of one or more debates on local television channels.
54
Organization of a conference in Lebanon with representatives of public institutions
and private companies of other Mediterranean Countries who have successfully
developed national and regional markets for SWHs. During this event similar
programs will be presented along with the funding mechanisms and sources, the
institutional arrangements and roles of different stakeholders, objectives and outcomes
and the encountered barriers and identified solutions. This conference could be
organized in the middle of the first year of the proposed program..
Events for the various stakeholders to present the proposed program:
Organization of conferences and workshops to inform the public, policymakers, and
professionals about the institutional and financial mechanisms for the proposed
program (objectives, characteristics, conditions of eligibility) and its micro and
macroeconomic, social and environmental impacts. The target group: commercial
banks, representatives of relevant institutions, NGOs, private sector, large customers,
donors and development partners.
Elaboration of program content (TV spot, radio, spot, posters, stickers,
newspaper articles, conferences).
LCEC is in the process of sensitizing the general public on the importance of energy
efficiency, ways to achieve energy savings and reducing wastage.. To support the
broad-based effort for SWHs under the proposed program, the MEW along with
LCEC, will launch a dedicated campaign to promote the use of SWH. Promotion and
awareness raising will be critical toward success of the proposed program, and to help
establish a positive image for SWHs, and to trigger effective behavioral change in
energy savings and managing consumption without waste.
Target audience: The general public, institutions (building owners, hotels, hospitals,
etc.) policy and decision makers, SWH and component suppliers and installers, etc.
Strategy: Create awareness through advertisements that clearly state the benefits of
using SWH. As explained previously in the paper, there are clear benefits of large
scale use of SWHs to the consumers and to the electric utility, EDL and at country
level. People should be able to see that they are assisting the country in addressing the
energy crisis while at the same time, the actions are , directly beneficial to an
individual by lowering the household spending on electricity bills, and for getting
more reliable supply for meetnig the individual‟s hot water needs.
Media strategy: All forms of media are necessary to obtain the best outcomes from
the communication campaign.
Press strategy: Press is effective in building visibility and is particularly relevant to
reach the middle class.
55
Radio: Radio will be a key media to ensure that the message reaches the target market
sectors. LCEC should design appropriate and innovative programs
Television: A creative TV spot will reinforce the message and create widespread
awareness amongst the target group across the country.
Outdoor media: Use of outdoor media creates synergies across the media, building
recognition and consolidation of the advertising message. It is proposed that a more
innovative branding of street signs be undertaken in urban centers across the country.
Design and development of a website for the proposed program.
In order to facilitate promotion and increase visibility, it is important to develop a
web site, updated on a regular basis (at least once a quarter). This site will be hosted
within the LCEC and BDL websites.
16. Monitoring and Evaluation Approaches
Monitoring all activities of the proposed program will help to track and measure the success
as well as impacts of the program. In this context, specific studies should be carried out at
the end of the first two years, to help measure the impacts and to analyze the following:
Comparison of the achievements made in relation to planned activities;
Structure and evolution of the application for SWHs by consumers and suppliers
(number and types of beneficiaries, etc.).
Industrial dynamics created: number of suppliers and their capabilities, number of
installers, jobs created, integration and local manufacture, export;
Economic, environmental and social impacts :energy savings at the household level
and macroeconomic level, contribution to household savings (financial) and comfort
created, reduction of greenhouse gas emissions, improved quality of life
Conducting a prospective study on the development of a SWH sector in the medium
and long term.
o Organizing periodic meetings with the private sector (suppliers, installers and
banks) to discuss the behavior of SWH markets, problems, solutions and
improvements
There are three categories of stakeholders in the SWH sector in Lebanon:
1. Direct beneficiaries: beneficiary households and institutions (individual residential
houses, apartment buildings, hotels, hospitals, etc).
2. Indirect beneficiaries: Government (MEW, LCEC, BDL, Banks), research
institutions, training centers etc.
56
3. Market stakeholders: Equipment suppliers, equipment installers, etc.
To promote the development of this market, regular meetings are planned between these
various stakeholders to discuss:
The progress of the program,
Problems and barriers : institutional, financial, technical and regulatory
Possible solutions and types of mid-course intervention required, if any;
o Conduct consumer satisfaction surveys with beneficiaries of SWHs (technical
behavior / satisfaction, economic and social impact)
Two household surveys will be conducted during the first two years
At the end of the first year: the first household survey will test the impact of the
awareness campaign, the degree of information received regarding the proposed program,
benefits, and the benefits of SWHs, the degree of acceptance of new technology, the
ability of households to repay loans, potential barriers, the procurement of SWHs, the
quality of services provided, their opinions;
At the end of the second year, conduct the second survey to evaluate the impacts
of adjustments made as a result of the first survey. .
The survey results will be presented at regular meetings with stakeholders to consider
how to improve services, procedures, benefits and quality of products and general market
development.
o Management and updating of the database for the proposed program. (The
status of budget consumption (subsidies and credits, number of beneficiary
households and institutions (hotels, hospitals, health centers, schools, prisons, youth
clubs, etc.). , number of suppliers, installers, etc.
The implementation of the loans and subsidies program will be monitored jointly by
BDL, Commercial Banks and LCEC. Monitoring will be based on quarterly reports from
LCEC and on joint missions. A mid-term review will be arranged towards the end of the
second year to evaluate the program and to assess eventual needs for changes.
17. Conclusions
There are multiple benefits of large scale deployment of SWHs in Lebanon. In addition to
helping reduce consumer energy bills, EDL will benefit due to reduction in electricity demand in
a power system which is plagued by supply-demand imbalance and which entails unreliable
electricity supply. Reduced energy demand for grid based power generation due to the large
scale application of SWHs will also lead to fuel savings and lowered import bills for the
Government on Lebanon. Under the directions of MEW, and with support from UNDP and
57
other partner and stakeholders, LCEC has led the demonstration of pilot level efforts to promote
the use and installation of SWHs in Lebanon over the past several years. The Government of
Lebanon through MEW, and in cooperation with the BDL has also embarked on a national
energy efficiency program in 2009 to provide financial support to various measures, including a
solar thermal component for households and institutions (hotels, hospitals, apartment buildings,
others). As a result, a commercial market for both domestically manufactured as well as
imported SWHs has developed over the years, as the uptake of SWHs have been particularly
good in the case of large institutional end-users such as hospitals, hotels, etc. The SWH market
has grown at the annual rate of 15%, and the total number of SWH manufacturers, importers and
installers has increased from only seven in 2007 to about 70 in 2011. LIBNOR has also
elaborated mandatory energy performance standards for SWHs. Compared to the total potential
for SWHs, the overall cumulative uptake of SWHs in individual residential households remains
low, due to lower level of awareness about the benefits of SWH amongst residential consumers,
the high initial cost of SWHs and the absence of wide-scale and substantial financial incentives
available so far.
Taking into consideration the technical aspects and constraints of applicator of SWHs, the
realistic and commercial market potential for individual SWH systems in the residential sector is
estimated to be 700,000 m2, for about a total of 200,000 households across Lebanon. This is the
focus of the proposed program a large-scale SWH market in Lebanon elaborated in the Report.
As discussed, attaining 100% saturation of this market of 700,000 m2 of SWH installation in
200,000 residential households would require an estimated investment of US$ 300 million, and
much of these investments would have to be incentivized through grants and subsidies. In
addition, there will be another 300,000 m2 of SWH to be targeted through collective SWH
systems for institutions (hotels, hospitals, universities, etc.). The associated GHG emission
reductions are substantial, and can potentially be monetized and realized through the CDM based
revenues in the global carbon finance market which, in turn, could be used as incentives to
individual residential households. The estimated annual energy savings will be about 70,000 toe
in case of the residential SWHs alone.
For the program to develop a large-scale SWH market in Lebanon, which would lead to the
practical realization of the large potential of 1 million m2 of SWH installation (considering for
both collective SWH systems and individual residential household SWH systems) in Lebanon,
several steps and a multi-pronged efforts will be required. These efforts should be implemented
under the overall directions of MEW and leadership of LCEC, and with continued support from
the main local stakeholders (such as LIBNOR, BDL, IRI, private sector and NGOs) along with
both financial and technical assistance from various development partners (such as UNDP, EU,
World Bank, and bilateral donors). The actions and interventions under the proposed program
will have to be taken at several levels. The key steps in a large scale deployment programs will
require: (i) Strengthening the institutional and coordinating role of LCEC to help develop the
relevant implementation framework, in collaboration with other stakeholders who could support
LCEC‟s Project Management Unit though participation in a Technical Committee; The specific
modalities of this institutional mechanism should be developed and the roles of different
58
stakeholders clearly defined and adopted by all stakeholders; (iii) In addition to standards
developed by LIBNOR, technical specifications for high quality SWHs should be used by all
stakeholders. The establishment of a system of quality control equipment, monitoring and
evaluation and a control system for awarding grants and loans, and a system to reduce the risk of
fraud are essential and therefore, the procedures for approval process of products, suppliers and
installers have to be made clear and transparent. (iii) Implementation of the needs of LCEC for
capacity building and strengthening its human resources which are currently limited are
important. A training program for stakeholders and installers and a promotion and sensitization
program is required. In addition, organization of consumer awareness events are necessary.
59
ANNEXES
60
Annex 1: Tables of Calculation
Annex : Projected growth of SWH in the residential sector
(2011-2020) Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Num of Households 10000 12000 15000 15000 18000 20000 25000 25000 30000 30000 200000
Num of SWH 10000 12000 15000 15000 18000 20000 25000 25000 30000 30000 200000
( Average m2/SWH based on 50% of
SWH 200 L and 50% SWH 300 L)
3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6
Total m2 installed 36000 43200 54000 54000 64800 72000 90000 90000 108000 108000 720000
Final Energy saved MWh/m2/year 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55
MWh saved 19800 23760 29700 29700 35640 39600 49500 49500 59400 59400 396000
Cumulated saved MWh 19800 43560 73260 102960 138600 178200 227700 277200 336600 1397880
Primary energy saved: TOE/m2/year 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15
Primary Energy Saved per year
(TOE)
5400 6480 8100 8100 9720 10800 13500 13500 16200 16200
Cumulated primary energy
saved(TOE)
5400 11880 19980 28080 37800 48600 62100 75600 91800 108000 489240
Average cost of SWH 1000 $US 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5
Investment 1000 US $ 15000 18000 22500 22500 27000 30000 37500 37500 45000 45000 300000
Cost of TOE 1000 $ 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73
Cost of cumulated Energy Saving
1000$
3942 8672,4 14585,4 20498,4 27594 35478 45333 55188 67014 78840 357145,2
tCO2/TOE (3) 3 3 3 3 3 3 3 3 3 3 3 3
Tons of CO2 avoided/year 0 16200 35640 59940 84240 113400 145800 186300 226800 275400 324000 1467720
61
Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Num of SWH plants 10 20 50 100 200 300 400 500 600 800 2980 Average m2/SWH plant 100 100 100 100 100 100 100 100 100 100 Total m2 installed 1000 2000 5000 10000 20000 30000 40000 50000 60000 80000 298000 Final Energy saved MWh/m2/year 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 MWh saved 550 1100 2750 5500 11000 16500 22000 27500 33000 44000 163900 Cumulated saved MWh 550 1650 4400 9900 20900 37400 59400 86900 119900 163900 504900
Primary energy saved: TOE/m2/year 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15
Primary Energy Saved per year (TOE) 150 300 750 1500 3000 4500 6000 7500 9000 12000
Cumulated primary energy
saved(TOE)
150 450 1200 2700 5700 10200 16200 23700 32700 44700 137700
Average cost of m2 installed 1000 $US 0,35 0,35 0,35 0,35 0,35 0,35 0,35 0,35 0,35 0,35
Investment 1000 US $ 350 700 1750 3500 7000 10500 14000 17500 21000 28000 104300
Cost of TOE 1000 $ 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73
Cost of cumulated Energy Saving
1000$
109,5 328,5 876 1971 4161 7446 11826 17301 23871 32631 100521
62
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Num of Households 10000 12000 15000 15000 18000 20000 25000 25000 30000 30000 200000
Num of SWH 10000 12000 15000 15000 18000 20000 25000 25000 30000 30000 200000
( Average m2/SWH based on 50% of
SWH 200 L and 50% SWH 300 L)
3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6
Total m2 installed 36000 43200 54000 54000 64800 72000 90000 90000 108000 108000 720000
Final Energy saved MWh/m2/year 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55
MWh saved 19800 23760 29700 29700 35640 39600 49500 49500 59400 59400 396000
Cumulated saved MWh 19800 43560 73260 102960 138600 178200 227700 277200 336600 1397880
Primary energy saved: TOE/m2/year 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15
Primary Energy Saved per year (TOE) 5400 6480 8100 8100 9720 10800 13500 13500 16200 16200
Cumulated primary energy saved(TOE) 5400 11880 19980 28080 37800 48600 62100 75600 91800 108000 489240
Average cost of SWH 1000 $US 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5
Investment 1000 US $ 15000 18000 22500 22500 27000 30000 37500 37500 45000 45000 300000
Cost of TOE 1000 $ 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73
Cost of cumulated Energy Saving 1000$
3942 8672,4 14585,4 20498,4 27594 35478 45333 55188 67014 78840 357145,2
63
Table 4: Residential sector - proposed program (2011-2020)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Num of Households 10000 12000 15000 15000 18000 20000 25000 25000 30000 30000 200000
Num of SWH 10000 12000 15000 15000 18000 20000 25000 25000 30000 30000 200000
( Average m2/SWH based
on 50% of SWH 200 L and
50% SWH 300 L)
3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6 3,6
Total m2 installed 36000 43200 54000 54000 64800 72000 90000 90000 108000 108000 720000
Final Energy saved
MWh/m2/year
0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55 0,55
MWh saved 19800 23760 29700 29700 35640 39600 49500 49500 59400 59400 396000
Cumulated saved MWh 19800 43560 73260 102960 138600 178200 227700 277200 336600 1397880
Primary energy saved:
TOE/m2/year
0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15 0,15
Primary Energy Saved per
year (TOE)
5400 6480 8100 8100 9720 10800 13500 13500 16200 16200
Cumulated primary energy
saved(TOE)
5400 11880 19980 28080 37800 48600 62100 75600 91800 108000 489240
Average cost of SWH 1000
$US
1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5 1,5
Investment 1000 US $ 15000 18000 22500 22500 27000 30000 37500 37500 45000 45000 300000
Cost of TOE 1000 $ 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73 0,73
Cost of cumulated Energy
Saving 1000$
3942 8672,4 14585,4 20498,4 27594 35478 45333 55188 67014 78840 357145,2
64
Total potential of Energy saved and CO2 avoided (2011-2020)
Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Cumulated primary energy saved(TOE) For Households sector
5400 11880 19980 28080 37800 48600 62100 75600 91800 108000
489240
Cumulated CO2 avoided(Tons) For Households sector
16200 35640 59940 84240 113400 145800 186300 226800 275400 324000
1467720
Cumulated primary energy saved(TOE) For collective sector: hotels+hospitals,etc.
150 450 1200 2700 5700 10200 16200 23700 32700 44700 137700
Cumulated CO2 avoided(Tons) 450 1350 3600 8100 17100 30600 48600 71100 98100 134100
413100
Total Cumulated primary energy saved (TOE)
5550 12330 21180 30780 43500 58800 78300 99300 124500 152700
626940
Total CO2 avoided (Tons) 16650 36990 63540 92340 130500 176400 234900 297900 373500 458100
1880820
65
0
20000
40000
60000
80000
100000
120000
2011 2013 2015 2017 2019
Total m2 installed
Primary Energy Saved per year (TOE)
0
10000
20000
30000
40000
50000
60000
70000
80000
2011 2012 2013 2014 2015 2016
Num of Households
Total m2 installed
0
20000
40000
60000
80000
100000
120000
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
Num of Households
Total m2 installed
0
20000
40000
60000
80000
100000
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
Cumulated primary energy saved(TOE)
Cumulated primary energy saved(TOE)
66
Annex 2: List of contact persons
Pierre El Khoury Manager Solar Water Heaters Market Transformation and Strengthening Initiative, LCEC Tel/Fax: +961 1 565108 / 569102 Mobile: +961 3 427283 E-mail: [email protected] www.lcecp.org.Ib Ministry of Energy and Water Corniche du fleuve – 1st Floor , Room 303 Beirut-Lebanon
Nader Hajj Shehadeh Energy Engineer Solar Water Heaters Market Transformation and Strengthening Initiative, LCEC Tel/Fax: +961 1 565108 / 569102 Mobile: +961 70 153119 E-mail: [email protected] www.lcecp.org.Ib Ministry of Energy and Water Corniche du fleuve – 1st Floor , Room 303 Beirut-Lebanon
Rani Al Achkar Site Engineer Solar Water Heaters Market Transformation and Strengthening Initiative, LCEC Tel/Fax: +961 1 565108 / 569102 Mobile: +961 3 112766 E-mail: [email protected] www.lcecp.org.Ib Ministry of Energy and Water Corniche du fleuve – 1st Floor , Room 303 ; Beirut-Lebanon
Dr. Raymond Ghajar Advisor to the Minister Ministry of Energy and Water Republic of Lebanon Tel/Fax : +961 3 340547 E-mail : [email protected]
Dr. Adel Mourtada Board Member LGBC- Lebanon Green Building Council ECOTECH; P.O.Box: 113/6359 Beirut- Lebanon Tel/Fax: 00961 1 66 88 87 Mob: 00961 360 75 90 P.O.Box:11-3060 Riad El Solh Beirut-Lebanon [email protected]
Mohammad Tassi AUB-American University of Beirut BME,MEM,LEED Accredited Professional Project Manager; Facilities Planning & Design Unit P.O.Box 11-0236 , Riad El-Solh , Beirut 1107 2020 Lebanon Tel:+961-1-350000 (Ext:2080), Fax: +961-1-360107 Email: [email protected]
67
Lena Dergham Acting Director General Republic of Lebanon Ministry of industry Lebanese Standards Institution-Libnor Sin-el-Fil , City Rama Street , LIBNOR Bldg, P.O.BOX: 55120 Beirut , Lebanon Tel: +961 1 485927 – Fax: +961 1 485929 E-mail: [email protected]:www.libnor.org
Samir R.Traboulsi Board Member LGBC- Lebanon Green Building Council Thermotrade P.O.Box: 15 5400 Beirut- Lebanon Tel/Fax: 00961 1 84 10 65 Mob: 00961 3 38 29 60 P.O.Box:11-3060 Riad El Solh Beirut-Lebanon [email protected]
Bernard Ammoun CEO, GREENFUTURE 65 Rmeil St , Rmeil , Beirut-Lebanon Cell : +961 3 624 825 Tel : (01) 696 711 / 722 Fax Ext : 107 Email : [email protected]
Bernard Champanhet Team Leader- LCEC project (EU-Funded) CUB Engineering Mobile: 961 70 1276357 E-mail: [email protected]
Isabella E. Ruble , Ph.D. Economist Team Leader- LCEC project (EU-Funded) Email : [email protected] [email protected] Phone : +961 71 727535
Mazem A. Halawi Governor’s office Banque du Liban Masraf Loubnan Street, PO Box 11-5544, Beirut Tel/Fax: 961 1 750000 ext 6568 / 961 1 750701 E-Mail: [email protected]
Ing. El Sheikh Mohamad Alaya Director Electricity of Lebanon Beirut, Lebanon Tel/Fax : 961 1 449252/ 961 1 583084 Mobile : 961 3 437452 E-Mail : [email protected]
Riad Assaf , mme,mic ASHRAE LEBANESE CHAPTER-162 Secretary Business Development Consultant P.O.Box : 391-Zouk Mikael – Lebanon Tel : 00961 9 212708 Mob : 00961 3 767772 E-mail : [email protected]
68
Annex 3
Eligibility of Suppliers, Installers and Products
Eligibility of suppliers : Steps for granting eligibility to suppliers
This section defines the procedures of establishing a list of eligible suppliers who can receive
the benefits and incentives granted under the proposed Program. Eligibility will be assessed
by a Technical Committee which will be established within the Ministry of Energy and Water,
coordinated by LCEC (which will also operate the Project Management Unit) and comprising
of representatives from LCEC/ BDL/ LIBNOR/ IRI/ LSES/ GBC/ ALMEE.
Documents required:
Any supplier wishing to participate in the proposed Program must provide a complete file
containing the following documents:
- Specification forms (obtained from MEW/LCEC) completed and signed by a senior
employee of the company and notarized.
- A completed application form requesting approval as a supplier under the proposed
Program.
- A description of how each of the proposed products meet the specification criteria
required.
- Certificates or test reports provided by the laboratories demonstrating product
performance in accordance with the proposed standards.
- Copies of sample performance guarantee certificates for each product offered.
- Manuals for installation and maintenance for each product.
- A list of installers (installing companies) with details of the team composition
including
- CVs signed by team members.
- Copies of contracts between suppliers and installers
- Certificate of tax status.
- Certificate of membership of the Social Security Fund.
- Commercial registration number
The Technical Committee will meet on a quarterly basis to review the application and
supporting materials from prospective suppliers. The Committee will provide a written
response with regard to the eligibility of the supplier, products and installers.
69
Eligible Companies or enterprises:
To be eligible for participation in the proposed Program, the Supplier shall act for and on
behalf of a corporation or company established by Lebanon company law and national
procedures including:
- Local manufacturers, or national authorized representatives of foreign manufacturers of
SWHs;
- Local companies that provide installation;
Human and material resources
The supplier (local manufacturer, assembler, national authorized representatives of foreign
manufacturers and foreign brands made in Lebanon) must have the necessary human and
material resources for the duration of the program and for after sales service.
Regional Representation
In order to practice at the regional level, each supplier is required to maintain a physical
presence in the area of intervention.
Eligible installers
Any supplier working in the proposed Program is expected to have installers available to carry
out installation and after sales service. All installers must be approved by the Technical
Committee.
Example1: Template Letter of Commitment for Suppliers
70
LETTER OF COMMITMENT
SUPPLIER
I the undersigned: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Acting as: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ... ... ... ..
On behalf of the company: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...;
Company Address : ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...... ... ...
... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ... ... ... ... .. ;
Under registration number: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Understanding the specifications on the eligibility of suppliers, I agree to abide by all its
recommendations, under which the Corporation ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
... ... ...will become eligible for benefits under the proposed Program
Company Stamp:
Name:……………….
Signature: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
President of the Commission:
Done at Beirut on ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Eligibility of installers
Installers must be pre-approved by the suppliers on the basis of their qualifications and their
ability to carry out the required tasks. Each supplier shall submit a list of installers whom it
intends to use as sub-contractors to install their SWHs. The Program Management Unit of the
Technical Committee will keep all records of suppliers and associated installers in an
information database that will be publicly available..
Example2: Template Letter of Commitment Installer Enterprise
LETTER OF COMMITMENT
INSTALLER ENTERPRISE
I the undersigned: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Acting as: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ... ... ...
On behalf of the company: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Company Address: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Under registration number: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Understanding the specifications on the eligibility of products (individual and collective
facilities for heating of domestic hot water), for qualification of eligible installers for the
program I agree to comply with all of the recommendations, under which the installer ... ...
... ... ... ... ... ... ... ... ... ... ... ... ... becomes eligible for inclusion on the list of eligible
installers operating within the framework of support mechanisms under the proposed
Program.
71
Company Stamp:
Authenticated signature: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Done at Beirut on ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Eligibility of Products
Specifications relating to the eligibility of products: Solar Collectors and SWHs under the
proposed Program are laid out in NL 1297-6-7 Norms. The eligibility could be determined
through a pre-defined set of procedures for inclusion in the list of eligible products for benefits
granted under the proposed Program. Eligible products are solar collectors and individual
SWH systems.
The eligibility of the proposed products under the proposed Program will depend on the
review and approval by the Technical Committee, after assessing all documentation submitted
by an eligible supplier.
b) Products covered:
The following products can be submitted by suppliers for approval as an eligible product
under the proposed Program:
• Solar circulating liquid collectors;
• SWHs, supplied as a complete kit (factory prefabricated systems)
c) Suppliers authorized to submit a dossier:
Suppliers with the following attributes may submit an application to be approved as an official
supplier under the proposed program:
• Local manufacturers or assemblers;
• Foreign manufacturers established in Lebanon under national laws and procedures;
• Local representatives of trademark goods manufactured abroad (supported by the
manufacturer)
d) Formulation of the application for product eligibility:
Any eligible supplier wishing to register their products for official inclusion under the
proposed Program must submit the following documentation to the Committee:
Complete technical specifications per the required standards
Completed application form (available inside the technical specification manual for
each product to be included in the list of eligible products)
Descriptions of the specific products being submitted for approval.
Copy of the ISO9001: 2000 certificate of manufacture.
For products manufactured or assembled locally, for which the manufacturer has not yet been
certified as ISO9001: 2000, a certificate of ISO9001: 2000 for the components imported by
72
the local company should be included, together with documentation demonstrating that
certification for ISO 9001:2000 has been applied for and is in progress. The manufacturer
should be able to provide proof of certification within one year from the date of submitting the
complete dossier (two years for newly established companies).
The supplier shall submit documents containing detailed descriptions of the current quality
management system used by the manufacturer and or assembler.
A valid test report, presented by an approved/ recognized laboratory, for each product or its
components, specifying technical characteristics and information on the thermal performance
of solar collectors and / or storage tanks shall also be provided.
e) Granting a certificate of product eligibility
To be admitted to the list of eligible products, a solar collector or a SWH must comply with
the technical specifications for eligibility. After considering the submitted complete file, the
Technical Committee will assess all documents and shall provide written notice of their
decision with regard to eligibility of the products to the supplier/representative.
Once approved, products will be included in the list of eligible products under the proposed
Program, to be made publicly available. Approval is given for an indefinite period but
suppliers must notify the Committee, if there are any technical changes that have been made
in the eligible products, after they were approved and included in the list of eligible products.
Even in case of improved performance, the supplier must elaborate on how the proposed
changes may affect eligibility and which impacts on the performance are to be expected,
before any altered product can be accepted and sold. (Annex 3: Technical Specification of
SWH)
f) Warranty and availability of spare parts
Equipment Warranty
Suppliers will provide warrantees for all equipment provided that shall cover: defects due to
design or the used materials as well as damage inflicted during normal use (for conditions in
Lebanon) The minimum warranty shall be:
Ten years for solar collectors,
Five years for SWHs.
This warranty must be issued by all suppliers and installers working under the proposed
Program. As in a normal warranty, the coverage shall begin from the date of provisional
acceptance of the fully installed system by the client.
Availability of spare parts:
The supplier will have to agree to make adequate quantity of spare parts available to the
installers to ensure the effective functioning of the equipment during the warranty period, and
to make the required repairs therein.
g) Duration of eligibility of a solar collector or SWH
73
The eligibility of a solar collector product or a SWH will be for an indefinite period unless
explicitly stated by the Technical Committee or following a change of rules and regulations.
At any time, the Committee can suspend, temporarily or permanently, the eligibility of a solar
collector or SWH under the proposed Program in accordance with the terms and conditions set
out in advance. In this case, the Committee will formally announce the decision to suspend a
supplier or products and their installers, if necessary.27
h) Letter of Commitment
Each supplier is required to sign a letter of commitment at the time of submitting his/her
application which confirms that he has read and understood the rules and requirements in
order to ensure his compliance with the technical specification.
Example3: Example Letter of Commitment for product eligibility
LETTER OF COMMITMENT
I the undersigned: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Acting as: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ... ... ...
On behalf of the company: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...;
Company Address: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ...
... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Trade registration number: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ... ... ...
After having read the specifications on the eligibility of products (Solar collectors and SWH)
for the classification of eligible products for the proposed Program, I commit to comply with all
of its recommendations, through which the products manufactured / assembled/supplied by the
company ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... become eligible for the proposed Program
support mechanisms.
Supplier‟s Signature: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..
Done at Beirut on……./…./………..
27 The Committee reserves the right to revise parts or all of this report at any time. Notification
will be given to suppliers in writing and all changes will come into effect six months after the
date of notification.
74
Annex 4: Technical Specifications for Eligible Products
SPECIFICATIONS FOR ELIGIBILITY OF PRODUCTS: SOLAR SYSTEMS AND
SOLAR WATER HEATER UNIT UNDER THE PROPOSED PROGRAM
These define the set of provisions governing the conditions and procedures for the products
offered for inclusion in the list of products eligible for benefits granted under the proposed
program. The affected products are solar collectors and individual SWH systems.
The eligibility of the proposed products under the proposed program depends on the advice
(agreement) of a Technical Committee established within MEW (to support LCEC), composed
of representatives of both institutions, after assessing all documentation submitted by a supplier.
ELIGIBILITY OF THE PRODUCT
Products covered: The following products can be submitted by suppliers for approval as an
eligible product under the proposed program:
• Solar circulating liquid collectors;
• SWHs, supplied as a complete kit (factory prefabricated systems)
Providers (suppliers) authorized to submit a dossier:
Suppliers with the following attributes may submit an application to be approved as an
official supplier under the proposed program: • Local manufacturers or assemblers ;
• Foreign manufacturers established in Lebanon under national laws and procedures;
• Local representatives of trademark goods manufactured abroad (supported by the
manufacturer).
Formulation of the application for product eligibility: Any Supplier wishing to register
their products for official inclusion under the proposed program must submit the following
documentation to MEW (LCEC):
A completed application (available inside the technical specification manual for each
product to be included in the list of eligible products.
The supplier must collect the technical specifications from MEW (LCEC), answer the
questions within the specification manual then sign and date all pages. (Can also be
signed by an official proxy) .
Descriptions of the products being submitted for approval. Attached as an annex.
A copy of the company‟s fiscal identity card •
A copy of the contract giving local representatives the right to represent products
trademarked abroad
• A copy of the certificate of manufacture.
For products manufactured or assembled locally, where the manufacturer has not yet been
certified as ISO9001: 2000:
A certificate of ISO9001: 2000 for the components imported by the local company
should be included, in conjunction with documentation demonstrating that certification
75
for ISO 9001:2000 has been applied for and is in progress. The manufacturer should be
able to provide proof of certification within one year from the date of submitting this
complete dossier (two years for newly established companies).
The supplier shall submit documents containing detailed descriptions of the current
quality management system used by the manufacturer and or assembler.
A valid test report, presented by an approved/recognized laboratory, for each product
or its components, specifying, technical characteristics and thermal performance of
solar collectors and / or storage tanks.
Granting certificate of product eligibility To be admitted to the list of eligible products, a
solar collector or a SWH must comply with the technical specifications for eligibility.
After considering this dossier, which must be complete, MEW (LCEC) will assess all
complete files and shall provide written notice of their decision to the supplier.
Once approved, products will be registered on the list of eligible products under the proposed
program. Approval is given for an indefinite period however; suppliers must notify MEW
(LCEC) if there are any changes in the products supplied. The supplier must describe how
the changes affect eligibility and any impacts on the performance that result before any new
products can be accepted and marketed.
WARRANTY AND AVAILABILITY OF SPARE PARTS
Equipment Warranty:
Suppliers will provide warrantees for all equipment provided to cover; defects due to design,
materials used and damage caused during normal use (for conditions in Lebanon) Minimum
warranty terms shall be:
• Ten years for solar collectors,
• Five years for solar tanks.
This guarantee must be issued by all suppliers and installers working under the proposed
program. Cover shall begin from the date of provisional acceptance by the client of the fully
installed system.
Availability of spare parts:
The supplier agrees to make spare parts available to suppliers and installers to ensure normal
operation of the equipment for at least the warranty period.
Deed of Commitment
Each supplier is required to sign a commitment document at the time of submitting his
application which confirms that they have read and understood the rules and requirements to
ensure compliance with the technical specifications.
76
ACT OF COMMITMENT
I the undersigned: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...;
Acting as: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ... ... ... .. ;
On behalf of the company: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...;
Company Address: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ...
... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Trade registration number: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ... ... ... ... .. ; ...
... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ;
After having read this specification on the eligibility of products (Solar collectors and
SWH) for the classification of eligible products for the proposed program and its annexes, I
agree to comply with all of its recommendations, under which the products manufactured
/ represented by the company ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... become
eligible for proposed program support mechanisms.
Supplier‟s
Signature: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..
Done in Beirut on ……………………..
77
Technical Specifications for eligibility of solar collectors and solar water heater
TECHNICAL DOSSIER FOR SOLAR COLLECTOR/ SOLAR WATER HEATER
Eligibility of SWHs under the proposed program
To be admitted to the proposed program, all models of SWH (SWH) must comply with the
conditions of admission set out in this document. The manufacturer or representative must
submit to MEW (LCEC) a complete file detailing specific eligibility for each proposed model.
MEW (LCEC)/ will then assess the suitability of the products proposed and will determine
which will become eligible under the proposed program.
Eligible solar collectors and SWH
Solar collectors and SWHs covered by the program are devices that provide direct conversion
of sunlight to thermal energy to produce hot water.
Identification of solar collectors and SWHs
Commercial name
For each model of solar collector or SWH covered by the application for eligibility, all
components, must be covered by a single brand name. (brand + model and / or type ).
Labeling and Marking of solar equipment
Each solar collector or SWH must be identified by appropriate markings, in accordance with
current standards for solar collectors and for storage tanks
Features and Requirements of eligible Systems
Standards and regulations
All supplied components shall conform to international standards including matters relating to
the protection of users (electrical safety, safety, pressure rise).
Minimum performance acceptable for SWHs
To qualify, all SWH will ensure a specific minimum annual productivity of 450 kWh /
m²/year. The reference area is the total area of the input solar collector as defined by the
standard EN12975.
Specific annual productivity is calculated using the SOLO method or another method
approved by MEW (LCEC) on the basis of climatic data from the weather station in Beirut,
assuming water temperature at the exit of the tank is 45 ° C and a daily consumption of hot
water equals the storage capacity of the heater.
78
Where the request for eligibility is for the solar collector only, the specific annual productivity
is evaluated later as part of the estimated performance of the projected solar system.(The
criteria of minimum acceptable performance is under review).
Minimum standards for the provision of a SWH:
SWH models presented must include a set of components for the normal functioning of the system, its
attachment to the frame as well as protection against freezing, if necessary.
Solar systems must include at least the following components:
• solar collectors based on liquid circulation as the heat transfer fluid;
• storage tank, (which can be integrated with collector)
• Protection against potential over-pressure;
• Pipes and fittings collector / ball;
• Specific sockets and accessories for binding;
• A set of pipes with accessories (valves, stops, packages, etc..) for supplying cold water to the water
heater and hot water outlet to use.
• A device to limit the temperature of hot water to 65 ° C before the connection point on the main hot
water distribution pipe, or a certificate certifying that the water cannot reach a limit greater than the
output of the SWH
In the case of a SWH with an indirect thermo-siphon, the system should also include:
• A heat exchanger;
• A safety valve for the primary circuit;
• A venting device;
• An expansion tank or other means to accommodate the expansion of water;
In the case of a recirculation SWH the system shall also be equipped with a circulation
controlled pump.
Technical characteristics of components for the SWH
All components of the solar system will be designed to withstand at least the temperatures and
maximum working pressures to which they may be exposed. If necessary, MEW (LCEC)
may request special tests for solar equipment.
Solar collectors:
The solar collector must comply with Lebanonn where applicable or with European standards
(EN12975) or other relevant international standards.
As a guide, and in the case of using a solar collector plane (the most commonly used to heat
water):
• The components of the absorber will be made of materials resistant to the stagnation
temperature of the solar collector and not very sensitive to corrosion
• If the solar collector's transparent cover is made of glass, it must be tempered glass. For any
other material of the transparent cover, the supplier is required to submit all necessary
documents proving its physical and technical properties and its stability for at least ten (10)
years;
• Pressure testing of solar collectors will be equal to 1.5 times the pressure setting of the tank
safety systems without a heat exchanger, or the set pressure of the safety valve for the primary
circuit water heaters if equipped with a solar heat exchanger.
As a guide, when using vacuum tubes:
• The glass must withstand wind, hail and other external influences. The provider must submit
79
all necessary documents to prove their performance.
• In case of glass tubes being connected directly to the storage tank, the element used to seal
the pipes and the tank must ensure a perfect seal, and must have a guaranteed life of at least 10
years. Supporting documents must be submitted.
• It must be possible to easily replace each tube.
Storage tank
The storage tank must meet the following specifications:
• Resist the minimum operating pressure of 7 bar and be equipped with a security group set at
7 bar, and when the system is under pressure from the network. For systems that are not
pressurized, the balloon must withstand a pressure of at least 2 bars.
• Be equipped with an interchangeable magnesium anode , to protect it from corrosion
phenomenon. Balloons all require this device;
If the balloon is provided with an anode, the operating instructions and maintenance shall
specify how long this interval anode will last before being replaced and the maximum
allowable lifetime. The qualifications and affiliation of the person who can perform this action
must also be specified.
• The lining will withstand high temperatures (a temperature equal to the maximum
temperature may be rded in the system + 10 º C and in all cases a temperature of at least 100 °
C).
• The liner must be food grade. Galvanized or zinc coating is not allowed;
• Be provided with external protection against rust and be insulated. The insulation is protected by a
jacket, which will be resistant to the effects of weather, ultraviolet radiation and damage which may be
caused by animals.
Piping and insulation
The nature of the piping must be compatible with materials used in solar collectors and
the heat exchanger if it exists. In any event, the inner diameter of the pipe must be
sufficient to allow adequate circulation of fluid. All water pipes must be food grade
and withstand a minimum pressure of 7 bar at a temperature of 90 ° C. In addition,
they will be designed to withstand extreme operating temperatures.
The connections between dissimilar metals can cause adverse erosion effects and must
be prevented with the relevant safety measures. The use of galvanized steel pipe or
galvanized steel is not allowed.
Thermal insulation of pipes
All hot water pipes should be provided with adequate insulation. The insulating material must:
• Resist temperatures: - 10 ° C to 100 ° C;
• Be free of CFCs;
• Resist ultraviolet light, or be adequately protected;
• Be impervious to rain and wind, or be properly protected
80
Operating and maintenance Manual
The operating and maintenance manual must accompany each shipment of SWH and will
describe, in clear and easily understandable language:
• Operating procedures for the installation of SWH;
• Necessary maintenance actions (scaling, change of the magnesium anode, possible link to
the earth, changing insulation and ducts, cleaning the glass collector surface, what to do in
case of neglect or non-use for long periods of time etc..), and the frequency of these actions.
• When the SWH is equipped with an immersion heater built into the balloon, the user must be
duly informed of the conditions for using this booster and the potential impact of
inappropriate use on the energy consumption of the installation.
Duration of eligibility of a solar collector or an SWH
The eligibility of a solar collector or a SWH will be for an indefinite period unless explicitly
stated by MEW (LCEC) or or due to a chance of rules and regulations.
At any time, MEW (LCEC)/ can suspend, temporarily or permanently, the admission of a
solar collector or SWH under the proposed program in accordance with the terms and
conditions set out in advance.
MEW (LCEC)/ will formally announce the decision to suspend a supplier or products and
their installers if necessary.
Revision of this document
MEW (LCEC) reserves the right to revise parts or all of this document at any time.
Notification will be given to suppliers in writing and all changes will come into effect six
months after the date of notification.
81
TECHNICAL DOSSIER FOR SOLAR COLLECTOR / SOLAR WATER HEATER
1. Product described in the application: Complete Solar Water Heater ... ... ... ... ...
Solar collector: ... ... ... ... ... ... ... ... ... ............
2. Commercial Product Name: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..
3. Supplier: Manufacturer or assembler or importer
(agent):………………………………………………..
4. Product Origin: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ...
Solar collector manufacturer: ... ... ... ... ... ... ... ... ... Country of origin: ... ... ... ... ... ...
Manufacturer of Balloon: ... ... ... ... ... ... ... ... ... ... ..Country of origin: ... ... ... ... ...
SWH manufacturer: ... ... ... ... ... ..............................Country of origin: ... ... ... ... ... ...
5. General features of the SWH (not applicable in the case of an application for eligibility
of a solar collector):
Principle of operation:
Direct thermosyphon: ... ... ... .. Indirect thermosyphon: ... ... ... ... ..
Forced circulation: ... ... ... ..... solar collector storage: ... ... ... ... ... ...
Aperture area: ... ... ... m² storage tank volume: ... .... l
Curb Weight: ... ... ... ... ... kg weight: ... ... ... ... ... .. kg
Number of collectors: ... ...
Characteristics of solar: Solar collector Type:
Flat plate collector: ... ... ... ... ... ... ... solar collector vacuum tube: ... ... ...
Other: ... ... ... ... ... ... ... ... ...
Limits of the solar collector: Maximum temperature [° C]: ... ... ... ... ...
Pressure [bar]: ... ... ... ... ...
Test pressure [bar]: ... ... ... ... ...
Maximum flow [l / min]: ... ... ... ... ...
Minimum flow [l / min]: ... ... ... ... ...
Maximum number of solar collectors can be connected in series: ... ... ... ... ...
Nominal operating conditions of the solar collector: Coolant: ... ... ... ... ... ... ... ... ..
Nominal flow [l / min]: ... ... ... ... ... ... ... ..
Losses in the flow rate solar collector [mmWC]: ... ... ... ....
Solar collector plane:
Transparent cover:
Type of cover: ... ... ... ... ... ... ....
82
Glass type: Low Dose Iron: ... ... ... ... ... .... Normal: ... ... ... ... ....
Tempered Glass: Yes ... ... ... ... .. No: ... ... ... ... ..
Alveolar: ... ... .... Yes: ... ... ... ... ... No
Sealing Cover / trunk: ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Absorber
Grid material: ... ... ... ... ... ... ... .... Number of tubes: ... ...
Tube diameter: .... .... mm diameter collectors: ... .... mm Material of Fins: ... ... ... ... ...
Means adopted for binding fins / tubes: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ....
Coating the fins ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..
Type of absorber: Black: ... ... ... ... Selective: ... ... ... ... ... ....
Absorptivity coefficient ... ... ... ... .... Emissivity coefficient ... ... ... ...
Safe:
Material Safety: Setting: ... ... ... ... ... ... Background: ... ... ... ... ... ... ... ... ....
Nature of protection against corrosion: ... ... ... ... ... ... ... ... ... ....
Insulation:
Nature of bottom insulation: ... ... ... ... ... ... ... Height: ... ... ... ... ... ... ....
Nature of side insulation : ... ... ... ... ... ... ... Height: ... ... ... ... ... ... ....
Physical characteristics and dimensional units:
Overall dimensions [Long. x High. x Ep] (mm) ... ... ... ... .. x. ... x ... ....
Overall surface (m²) ... ... ... ... ..
Maximum allowable pressure (bar) ... ... ... ... ..
Curb Weight (kg) ... ... ... ... ..
Solar collector vacuum tubes:
Transparent cover:
Nature of the glass: ... ... ... ... ... ... ....
OD glass tubes: ... ... ... mm
Inside diameter of glass tubes: ... ... ... mm
Absorber
Absorber material: ... ... ... ... ... ... ... ....
Absorptivity coefficient ... ... ... ... .... Emissivity coefficient ... ... ... ...
Material of blades: ... ... ... ... Middle adopted for binding fins / tubes:
Safe:
Material Safety: Setting: ... ... ... ... ... ... ... ... Background: ... ... ... ... ... ... ... ... ....
Nature of protection against corrosion: ... ... ... ... ... ... ... ... ... ....
Physical characteristics and dimensional units:
83
Overall dimensions [Long. x High. x Ep] (mm) ... ... ... ... .. x. ... x ... ....
Overall surface (m²) ... ... ... ... ..
Number of glass tubes by solar collector ... ... ... ... ..
Curb Weight (kg) ... ... ... ... ..
Storage tank:
Type of vessel: ... ... ... ... ... ... ... ... ... ... ... ... ...
Materials: Thickness: mm
Type of lining: ... ... ... ... ... ... ... ... ... ... ... ..
Hydraulic nozzles (number, location, type, diameter): ... ... ... ... ... ... ... ... ... ... ... ... ...
Means of protection against internal corrosion:
Principe: ... ... ... ... ... ... ... ... ..... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Features (in the case of magnesium anode length, diameter ...)................................
Maximum allowable temperature: ... ... .... ° C
Maximum allowable pressure: ... ... ... ... ... .. bars
Cover (outer):
Nature of the cover: ... ... ... ... ... ... ... ... ... ... ... ... ... ..
Thickness: ... ... ... ... mm
Anti-corrosion: ... ... ... ... ... ... ... ... ... ... ... ... ....
Insulation:
Type of insulation: ... ... ... ... ... ... ... ... ... ... ... ....
Thickness: ... ... ... ... mm Density: ... ... ... ... ... kg/m3
Cover: ... ... ... ... ... ... ... ... ... ... ... ...
Hydraulic connection balloon - Solar collector: Type of pipes: ... ... ... ... ... ... ... ...
Diameter: ... ... ... ... mm Insulation: ... ... ... ... ... ... ... ... ... ... ... ... ....
Security:
Name: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Features: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Set pressure of safety valve: ... ... ... ... ... ... ... bars
Heat exchanger: Built-in tank: Yes No ... ... ... ... ... ... ... ... ... ..
Type (coil, ...): ... ... ... ... ... ... ... ... ... ... ... ..
Exchange area: ... ... ... ... ... ... ... m²
Power Interchange: ... ... ... ... ... ... ... ... ... W / ° K
Loss: ... ... ... ... ... .. mm CE
Coolant:
Name: ... ... ... ... ... ... ... ... ... ... ...
Physicochemical characteristics: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
84
Extra supply:
Name: ... ... ... ... ... ... ... ... ... ... ...
Power: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Position the ball ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Control mode: ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... ... ... ...
Set temperature: ... ... ... ° C
Electrical Safety: ... ... ... ... ... ... ... ... ... ... ....
Regulation provided on the integrated booster ball:
Thermostat: ... ... ... ... ... ... .... Timer: ... ... ... ... ... ... ... ....
Other: specify: ... ... ... ... ... ... ... ... ... ... ... ... ... ..
Media delivered with the CES:
Nature: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Thickness: ... ... ... ... ....
Protection against corrosion: ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Inclination of surfaces: ... ... ... ... ... ...
85
Annex 5: Copy of Intermediate Circular No 236
BANQUE DU LIBAN
Banque du Liban Street – Beirut – Republic of Lebanon
Intermediate Circular No 236
Addressed to Banks
Attached is a copy of Intermediate Decision No 10572, of November 25, 2010 relating to the
amendment of Basic Decision No 7835, of June 2, 2001 (statutory reserve) attached to Basic Circular No
84.
Beirut, November 25, 2010
Governor of the Banque du Liban
Riad Toufic SALAMEH
86
Annex 4 :
BANQUE DU LIBAN
Banque du Liban Street – Beirut – Republic of Lebanon
Basic Decision No 10572
Amendment of Basic Decision No 7835, as of June 2, 2001, related to the statutory reserve
The Governor of the Banque du Liban,
Pursuant to the Code of Money and Credit, particularly Articles 70, 76, 79, and 174 of the said Code,
Pursuant to Basic Decision No 7835, dated June 2, 2001, and its amendments on the statutory reserve,
Pursuant to the Decision of the Central Council of the Banque du Liban, taken in its meeting held on
November 13, 2010,
Decides the following:
Article 1: The text of item (2), Article 3, Basic Decision No 7835, dated June 2, 2001, is cancelled and
replaced by the following text:
“Term obligations subject to part of the statutory reserve are discounted and the related statutory
reserve reduced accordingly, in conformity with the provisions of Articles 7, 8, 9, 10 and 10 bis, in
paragraph 6 of the present decision, within a ceiling of 90% of the value of statutory reserve on the
obligations of the concerned bank, as stated in its balance sheet closed on December 31 of the previous
year or in its semi-annual balance sheet prior to the date of discount, depending on which one was
issued first.”
87
Article 2: The text of items (9) and (10), Article 7, Basic Decision No 7835, dated June 2, 2001, is
cancelled and replaced by the following text:
“9- Loans granted to environmentally friendly projects, whose debit interests are not subsidized by the
State, according to the provisions of paragraph 6 of the present decision.
10- Loans granted to environmentally friendly projects, whose debit interests are subsidized by the
State, according to the provisions of paragraph 6 of the present decision.”
Article 3: The texts of paragraph (i), item (1) and item (2), Article 7, are cancelled from Basic Decision No
7835, dated June 2, 2001, and replaced by the following texts:
“i- Environmentally friendly loans whose value of each does not exceed thirty million LBP, whose debit
interests are not subsidized by the State, set in paragraph 6 of the present decision.”
“2- The concerned bank shall obtain the consent of the Central Council of Banque du Liban over the
overall amounts to be invested in every category of loans enlisted in the above-mentioned item (1).”
Article 4: The text of Article 10 of Basic Decision No 7835, dated June 2, 2001, is cancelled and replaced
by the following text:
“Article 10: Principles of statutory reserve discount”:
1- The application for the approval of the overall amounts to be invested in the loans enlisted in the
above-mentioned article 7 is submitted to the Governor’s Office, in three copies, one being original,
provided that the application sets the overall amount of every category of loans separately.
2- After the issuance of the Central Council’s decision to approve the application, the concerned bank
shall provide the Central Office of Banking Risks (Centrale des Risques):
a- Between Wednesday and Saturday of each week:
-With a table of new loans balances, except for the loans of the Banque de l’Habitat s.a.l. which are used
to finance housing loans granted by the latter, according to forms set for every category of loans, with
the mention “new”, to be included within the ceiling set in the Central Council’s decision, according to
the following table:
88
Type of Loan Upon submission of the
application, the following
form should be adopted:
Housing loans granted according to the protocol signed with the
Public Housing Institute (in LBP)
ARO-05
Loans directly granted to the Public Housing Institute (in LBP) to
construct buildings for rent for those with limited income
ARO-07
Loans granted with a guarantee from Kafalat s.a.l. or from IFC,
EIB, OPIC, AFD, or AFESD (in LBP), whose debit interests are not
subsidized
ARO-09
Housing loans granted in LBP based on cooperation protocols
signed with the banks
ARO-11
Loans granted to the housing body of non-conscript military men
(in LBP) to be used in order to buy real estate, build housing
units, and sell them to military men or lend them to the latter for
housing purposes
ARO-13
Small loans in LBP granted with the approval of micro-lending
institutions
ARO-18
Small loans in LBP financed with credits granted to micro -
lending institutions or to financial institutions
ARO-20
Housing loans granted by the housing body of non-conscript
military men to military men before February 6, 2009, which
were assigned in favor of the banks
ARO-23
Loans granted in LBP to pursue the studies in higher education
institutions
ARO-27
Agricultural loans granted in LBP based on the cooperation
protocol signed between the banks and the Ministry of
Agriculture
ARO-35
Environmentally friendly loans the value of each not exceeding
thirty million LBP, whose debit interests are not subsidized by
the State, set in paragraph 6 of the present decision
ARO-37
89
- With a detailed table for every new loan in which the mode of settlement is set according to Form No
ARO-17, except for the loan granted with a guarantee from Kafalat s.a.l., whose interests are subsidized,
in which table PB01 annexed to the application for debit interests subsidizing is adopted.
Both tables, according to every case, should encompass the signature of the party cautioning,
guaranteeing, or signing the cooperation protocol with the banks.
b- Until Saturday at the latest, with a table showing the balances of loans used and closed on
Wednesday, which were included within the ceiling set in the Central Council’s decision, except for the
loans granted to the Banque de l’Habitat s.a.l. and used to finance the housing loans granted by the
latter, according to any of the forms set for every category of loans, according to the following table:
Type of Loan For the weekly statement,
the following form should
be adopted:
Housing loans granted according to the protocol signed with the
Public Housing Institute (in LBP)
ARO-06
Loans directly granted to the Public Housing Institute (in LBP) to
construct buildings for rent for those with limited income
ARO-08
Loans granted to Small and Medium Enterprises (SMEs) with a
guarantee from Kafalat s.a.l. or from IFC, EIB, OPIC, AFD, or
AFESD (in LBP)
ARO-10
Housing loans granted in LBP based on cooperation protocols
signed with the banks
ARO-12
Loans granted to the housing body of non-conscript military men
(in LBP) to be used in order to buy real estate, build housing
units, and sell them to military men or lend them to the latter for
housing purposes
ARO-14
Small loans in LBP granted with the approval of micro -lending
institutions
ARO-19
Small loans in LBP financed with credits granted to micro -
lending institutions or to financial institutions
ARO-21
90
Housing loans granted by the housing body of non-conscript
military men to military men before February 6, 2009, which
were assigned in favor of the banks
ARO-24
Loans granted in LBP to pursue the studies in higher education
institutions
ARO-28
Agricultural loans granted in LBP based on the cooperation
protocol signed between the banks and the Ministry of
Agriculture
ARO-36
3- The Banque de l’Habitat s.a.l., according to the mechanism set in item (2) of the present article,
provides the Centrale des Risques with the tables of loans it grants with the financing of the banks,
marked with the approval of the latter.
The tables are the following:
- A table including the balances of new loans, organized according to Form No ARO-15.
- A detailed table for every new loan, organized according to Form ARO-17.
- A table including the balances of used loans, organized according to Form ARO-16.
4- The statutory reserve discount for new loans begins, starting Monday, eight days following the week
on which the statement was submitted.
The statutory reserve discount for previously stated loans begins on Monday, directly following the
week of statement.
5- The value of statutory reserve discounts is set in proportion to the overall stated balances or to the
overall balances related to settlement tables, depending which balances are less.
6- The statutory reserve is discounted within the ceiling set in item (2), Article 3 of the present decision,
according to the following:
a- 100% of balances:
- Loans granted in LBP directly to the Public Housing Institute.
91
- “Small loans” granted in LBP with the approval of “micro-lending institutions” and “small loans”
financed by credits in LBP granted by the concerned bank to these institutions or to the financial
institutions.
- Loans granted in LBP directly to the housing body of non-conscript military men based on the protocol
signed between the banks and the housing body of non-conscript military men, including the housing
loans which are granted by the said body to non-conscript military men, which are assigned in favor of
the banks.
- Loans granted in LBP to pursue the studies in higher education institutions.
- Agricultural loans granted in LBP on the basis of the cooperation protocol signed between the banks
and the Ministry of Agriculture.
- Housing loans granted to the displaced in LBP, based on the cooperation protocol signed between the
banks and the Ministry of the Displaced.
- Housing loans granted to the judges in LBP, based on the cooperation protocol signed between the
banks and the mutual fund of judges.
- Housing loans granted in LBP based on the cooperation protocol signed between the banks and the
Directorate General of Internal Security Forces.
b- 60% of the balances of loans whose debit interests are subsidized and granted in LBP with the
guarantee of institutions and funds enlisted in item (8) of the above-mentioned Article 7 and 100% of
the balances of loans whose debit interests are not subsidized, granted in LBP with the guarantee of the
above-mentioned funds and institutions.
c- 80% of the balances of housing loans granted in LBP, based on the protocol signed with the Public
Housing Institute, including the guarantee of insurance policies in case of payment by installments to the
bank, on the same dates of the loan installments maturity.
d- 65% of the balances of loans granted in LBP to the Banque de l’Habitat s.a.l. and used to finance
housing loans granted by the latter.
e- 60% of the balances of loans granted in LBP with the guarantee of Kafalat s.a.l. – guarantee of SMEs
loans.
92
f- 100% of the equivalent in LBP of the balances of housing loans granted by the housing body of non-
conscript military men before February 6, 2009, which are assigned in favor of the banks.
g- 100% of the balances of loans granted in LBP to the Banque de l’Habitat s.a.l. according to the Central
Council’s decision No 16/26/10, dated August 11, 2010 and used to finance housing loans granted by the
latter, provided that the overall value of the loans granted from the banks to the Banque de l’Habitat
s.a.l., subject of the present paragraph, does not exceed 50 billion LBP, which are not renewable.
h- Discount rates set in paragraph 6 of the present decision.
7- The statutory reserve discount stops when the loan turns into a doubtful or a bad debt according to
the organizational texts issued by the BDL.
8- The concerned banks shall – otherwise the loan - principal, interests, and relevant charges - comes to
maturity immediately – include, in the loan contract signed with the Public Housing Institute, a condition
according to which rent contracts to be signed with lessees shall provide them with the right to acquire
rented housing units in return of an approved price upon the conclusion of the contract, taking into
consideration, even though partially, the installments paid as rent.
9- The concerned banks shall inform the BDL of any amendment of the ceiling, the maturity, and the
settlement schedule of the loan, or of any of its previously stated conditions, except for the loans to the
Banque de l’Habitat s.a.l., used to finance housing loans granted from the latter. The application is
submitted to the Centrale des Risques according to any of the forms set for every category of loans,
noted as “amended” according to the following table:
93
Type of Loan Upon submission of the
amendment application,
the following form should
be adopted:
Housing loans granted according to the protocol signed with the
Public Housing Institute (in LBP)
ARO-05
Loans directly granted to the Public Housing Institute (in LBP) to
construct buildings for rent for those with limited income
ARO-07
Loans granted with a guarantee from Kafalat s.a.l. or from IFC,
EIB, OPIC, AFD, or AFESD (in LBP), whose debit interests are not
subsidized
ARO-09
Housing loans granted in LBP based on cooperation protocols
signed with the banks
ARO-11
Loans granted to the housing body of non-conscript military men
(in LBP) to be used in order to buy real estate, build housing
units, and sell them to military men or lend them to the latter for
housing purposes
ARO-13
Small loans in LBP granted with the approval of micro-lending
institutions
ARO-18
Small loans in LBP financed with credits granted to micro-lending
institutions or to financial institutions
ARO-20
Housing loans granted by the housing body of non-conscript
military men to military men before February 6, 2009, which
were assigned in favor of the banks
ARO-23
Loans granted in LBP to pursue the studies in higher education
institutions
ARO-27
Agricultural loans granted in LBP according to the cooperation
protocol signed between the banks and the Ministry of
Agriculture
ARO-35
Environmentally friendly loans the value of each not exceeding
thirty million LBP, whose debit interests are not subsidized, set in
paragraph 6 of the present decision
ARO-37
94
Are annexed to the above-mentioned application the documents pertaining to the requested
amendment and the new settlement schedule according to Form No ARO-17, except for the loan
guaranteed by Kafalat s.a.l., whose debit interests are subsidized, in which table PB01 annexed to the
application for the amendment of debit interests is adopted. Both tables shall include, according to the
case, the signature of the party cautioning, guaranteeing or signing the cooperation protocol with the
banks.
10- The Banque de l’Habitat s.a.l. shall inform the Centrale des Risques in Banque du Liban of any
amendment of the ceiling, the maturity, and the settlement schedule or any of the previously stated
conditions of the loan.
The application is submitted according to Form ARO-15, to which are annexed the documents pertaining
to the requested amendment and the new settlement schedule organized according to Form ARO-17,
provided to be approved by the bank which granted the loan to the Banque de l’Habitat s.a.l.
11- Every bank granting loans from the categories set in Article 9 and in Paragraph 6 of the present
decision assumes the responsibility for the good execution and supervision of the use of the mentioned
loans and for their compliance with the objective for which they were granted. Otherwise, the reduction
for every loan granted in a way that goes against the provisions of the said article is suspended. The
concerned bank is then compelled to settle a compensation, as a penal clause, amounting to 15% of the
loan value, in addition to depositing a special reserve equivalent to the statutory reserve reduction rate
against this loan for a period equivalent to that during which it benefited from reduction.”
Article 5: The numbering of paragraph 6 of Basic Decision No 7835 is amended on June 2, 2001, to
become paragraph 7.
Article 6: The numbering of paragraphs 11, 12, 13, 14, 15, 16, and 17 of Basic Decision No 7835, dated
June 2, 2001, is amended to become, respectively, paragraphs 21, 22, 23, 24, 25, 26 and 27.
Article 7: Paragraph 6 of Basic Decision No 7835, dated June 2, 2001, whose text is below, is added:
“Sixth: Discounting statutory reserve and term obligations subject to part of the statutory reserve
against the loans granted to environmentally friendly projects.”
95
Article 8: Are added to Basic Decision No 7835, dated June 2, 2001, Articles 11, 12, 13, 14, 15, 16 and 17,
whose texts are the following:
“Article 11: Are included within the environmentally friendly projects:
1- Energy projects within the National Energy Efficiency and Renewable Energy Action NEEREA28
comprising Energy Saving Projects and Renewable Energy Projects.
2- Non-energy projects, aiming at:
a- Contributing to protecting the environment or downsizing the environmental impact and pollution, as
waste management, wastewater treatment, recycling, and green buildings.
b- Promoting ecotourism, organic agriculture, tiles installation, stones dressing, and garden design.
Loans granted for the above-mentioned projects should fulfill the following conditions:
1- They should be granted to finance new environmentally friendly projects or to finance projects in
place to turn them into environmentally friendly projects.
2- The settlement duration of the loan granted to finance a new environmentally friendly project shall
not exceed ten years, starting following the expiry of the grace period which varies between six months
and four years from the date the loan is granted.
3- The duration of the loan granted to finance the development of a project in place to turn it into an
environmentally friendly project shall not exceed ten years, including the grace period which varies
between six months and two years, starting from the date on which the loan is granted.
4- The loan shall not be fully or partially settled before maturity unless following the prior consent of
Banque du Liban.
Article 12:
28
NEERA was set up due to the joint efforts of the Banque du Liban and the United Nations Development Program (UNDP).
96
-Concerning the environmentally friendly loans whose value each does not exceed
thirty million LBP or the equivalent in foreign currencies:
It is necessary to obtain the approval of the Central Council of the Banque du Liban over
the overall amount to be invested in these loans.
-Concerning the environmentally friendly loans whose value each exceeds thirty
million LBP or the equivalent in foreign currencies:
It is necessary to obtain an individual consent from the Governor of the Banque du Liban
to benefit from the provisions of the present decision. To this end, the application is
submitted to the Financing Unit at the Banque du Liban in three copies, one of them
being original, comprising the following documents:
1- The loan contract duly signed between the borrower and the donor bank, clearly and
explicitly stating the objective of the loan.
2- A table showing the movement of withdrawing and settling the loan up till the date of
final maturity.
3- For the energy projects the client wants to be rated as environmental:
a- A report from a specialized engineering office (consultant) showing in detail the
environmental costs and the availability of environmental conditions according to
documents which prove the adopted standards and the execution plan based on a set
and clear timeline and showing the level of environmental rating the project may obtain
by an internationally recognized rating agency.
b- A document proving that the borrower did the registration to obtain an
environmental rating at the Leadership in Energy & Environmental Design (LEED)29 or at
an internationally approved rating agency.
29
LEED (Leadership in Energy & Environmental Design (LEED)) is an internationally acknowledged rating system of green buildings, affiliated to the US Green Building Council, which provides an independent rating to any building which was designed or built in order to save energy and the effective use of drinking water, reduce CO2 emissions and improve the internal environment of the building, and delivers a certificate in this regard.
97
c- A document proving that a Commissioning Agent who ensures the availability of
conditions in the achieved works and who may be the Consultant Office of the Project is
appointed according to the following conditions:
-He shall be independent from the party executing the project.
-He shall have sufficient experience proving that he has performed similar tasks for
projects of the same size and with similar administrative and technical complexities, at
least.
-His tasks should be set in details and in written before the start of the execution of the
project up till its completion.
d- The Technical Investigation Report from LCEC 30, for the party in charge of saving
energy thanks to environmentally friendly projects.
4- For projects for which the client does not have the intention to obtain an
environmental rating:
a- Report of the Consultant designated for the project, who performs the tasks of an
Energy Service Company (ESCO) and those of post-technical investigation of the project,
showing in details the environmental costs and the availability of environmental
conditions according to documents proving the adopted standards and the execution
plan, based on a set timeline.
b- The technical investigation report from LCEC, for the party in charge of saving energy
thanks to environmentally friendly projects.
c- The technical investigation report of an environmental expert for waste management,
water waste management and recycling projects.
30
The Lebanese Center for Energy Conservation (LCEC) is the financial center for energy saving, which makes sure of the technicality of the projects, located at the Ministry of Energy and Water Resources.
98
Article 13: The statutory reserve of any bank is reduced against the loans granted to
finance environmentally friendly projects, according to the discount conditions set in
present decision, as follows:
a- For loans in LBP, whose debit interests are not subsidized by the State:
1- 100% from the balances of the loans which are granted to finance the environmental
part of environmentally friendly projects in the non-energy sector, provided that
interests and commissions for these loans of any type whatsoever do not exceed 3%
calculated every year, starting from the date on which the loan is put into execution.
2- 150% from the balances of the loans which are granted to finance the environmental
part of environmentally friendly projects in the energy sector, provided that interests
and commissions of any type whatsoever calculated for these loans do not exceed 3%
minus 50% of the return of Lebanese Treasury Bills for one year, calculated every year
starting from the date on which the loan is put into execution.
b- For the loans in LBP guaranteed by “Kafalat SAL – Guarantee of Loans for Small and
Medium Enterprises”, whose debit interests are subsidized by the State:
100% from the balances of loans to finance the environmental part of environmentally
friendly projects in the energy sector, which are granted for fifteen years, provided that
interests and commissions of any type whatsoever for these loans do not exceed 3%,
calculated every year starting from the date on which the loan is put into execution.
Article 14: Term obligations subject to part of the statutory reserve are discounted
against the loans granted for the financing of environmentally friendly projects
according to the discount conditions set in the present decision, as follows:
- For loans in foreign currencies whose debit interests are not subsidized by the State:
1- 200% of the balances of loans granted to finance the environmental part of
environmentally friendly projects in the non-energy sector, provided that interests and
commissions of any type whatsoever for these loans do not exceed the cost of funds
plus 2%, calculated every year from the date on which the loan is put into execution.
99
2- 500% of the balances of loans granted to finance the environmental part of
environmentally friendly projects in the energy sector, provided that interests and
commissions of any type whatsoever for these loans do not exceed the cost of funds
plus 2% minus 50% of the return on Lebanese Treasury Bills for one year, calculated
every year, starting from the date on which the loan is put into execution.
- For the loans whose debit interests are subsidized by the State:
1- 200% of the balances of loans granted in LBP or in foreign currencies to finance the
environmental part of environmentally friendly projects, provided that interests and
commissions of any type whatsoever do not exceed the interest rate on Lebanese
Treasury Bills for two years for the loan granted in LBP, the LIBOR rate for three months
plus 6% for the loan granted in USD, and the EURIBOR rate for three months plus 6% for
the loan granted in Euro, calculated every year starting from the date on which the loan
is put into execution.
2- 500% of the balances of the loans, object of the above-mentioned item (1), after the
elapse of the seven-year period during which debit interests are subsidized by the State,
provided that interests and commissions of any type whatsoever, once the subsidizing
period expires, do not exceed the interest rate on the Lebanese Treasury Bills for two
years minus 2.5% for the loan granted in LBP, the LIBOR rate for three months plus 2.5%
for the loan granted in USD, and the EURIBOR rate for three months plus 2.5% for the
loan granted in Euro, calculated every year starting from the date on which the loan is
put into execution.
Article 15: The environmental part of the loan granted to finance environmentally
friendly projects, on the basis of which the statutory reserve is reduced or term
obligations subject to part of the statutory reserve are discounted, is calculated
according to the following table:
Nature
of the
project
Level of
rating
Environmental
part
100
New
project
Not rated 15% of the value
of the project
Certified 15% of the value
of the project
Silver 25% of the value
of the project
Gold 35% of the value
of the project
Platinum 45% of the value
of the project
Existent
project
Rated or
non-
rated
Environmental
Cost
The real estate value is not calculated within the value of the project upon calculating
the environmental part of the project according to the rates set in the above-mentioned
table.
The rating of the Leadership in Energy & Environmental Design (LEED) or that of an
equivalent internationally recognized rating institution or agency is adopted.
Article 16: Concerned banks shall obtain the consent of the Banque du Liban over any
amendment of the loan, the value of which exceeds thirty million LBP or the equivalent
in foreign currencies, granted to the financing of environmentally friendly projects, of
the maturity, the ceiling, the currency or the settlement table of loan. They shall also
notify the Banque du Liban of any other amendments on the loan.
Article 17: The Banque du Liban, in cooperation with the European Union, offers a grant
to subsidize loans whose value does not exceed /1 500 000 000/ LBP or the equivalent in
foreign currencies, granted to finance small and medium-enterprises to finance
environmentally friendly projects in the energy sector, the maturity of which not
exceeding ten years:
101
1- By 15% of the value of the loan granted to non-productive sectors, whose debit
interests are not subsidized by the Lebanese State.
2- By 5% of the value of the loan granted to productive sectors, whose debit interests
are subsidized by the Lebanese State.
The Banque du Liban earmarks, upon request, the value of the grant for the concerned
project following the technical investigation of the project performed by a specialized
institution.
The amounts allocated to the project are disbursed through the bank, provider of the
loan, upon a request submitted following the completion of the works pertaining to
saving energy, renewable energy, and green buildings, based on documents proving the
good execution of these works.
Article 18: The statutory reserve of any bank is reduced by 150% of the balances of
loans granted to finance the purchasing of solar water heating systems, provided that
the interest equals 0% and that the overall purchasing value is settled in monthly
installments extending over five years.
The Ministry of Energy and Water Resources, in cooperation with the Banque du Liban,
offers to the concerned bank a grant of 200 USD (two hundred American Dollars), to be
settled once the loan is granted and is allocated to settle the last installments, provided
that the supplier is among the companies specialized in selling and installing solar water
heating systems and approved by LCEC.
Article 19: In case the final rating of the environmentally friendly project in the energy
sector upon the completion of the execution is less than the rating on the basis of which
the loan is granted upon the start of the project, the concerned bank is compelled, upon
the first request of the Banque du Liban, to settle a compensation, as a penal clause,
equal to the one-year interest rate on Lebanese Treasury Bills, over the difference
resulting from the rating difference, in the value on the basis of which is calculated the
statutory reserve reduction or the discount of term obligations subject to part of the
statutory reserve, which is calculated from the date of signature of the contract and for
a period equal to that during which it benefited from reduction.
102
Article 20: Islamic banks undertaking operations to finance environmentally friendly
projects, when applicable, may benefit from the provisions of Paragraph 6 of the
present decision, provided that the return for every contract is calculated according to a
set rate equivalent to the interests applied to the loans, object of the mentioned
paragraph 6, calculated on the date on which the contract was signed.
Article 9: The texts of Forms RO-11, ARO-01, ARO-02, ARO-09, ARO-10, ARO-17, ARO-25, and ARO-26
annexed to Basic Decision No 7835, dated June 2, 2001, are cancelled and replaced by the new texts of
the mentioned forms which are annexed to the present decision.
Article 10: The Form ARO-37 annexed to the present decision is added to Basic Decision No 7835, dated
June 2, 2001.
Article 11: The present decision enters into force on Thursday, two weeks following the date of its
promulgation.
Article 12: The present decision is published in the Official Gazette.
Beirut, on November 25, 2010
The Governor of the Banque du Liban
Riad Toufic SALAMEH
103
Banque du Liban Form No: RO-11(1/5)
Directorate of Economic Statistics and Research
Obligations in LBP subject to the statutory reserve
Average between ____________________ and ____________________________
Name of the Bank: No:
Thousand
LBP
Number of account in the position of banks (Form – 2010)
Obligations
upon
request
Term
obligations
Total
20100 Issuing institutions / Non-resident
20200
(20280)
Banks / Non-resident
- Minus: Non-due interests
20300
(20380)
Mid- and long-term credit banks/Resident and non-resident
- Minus: Non-due interests
20500
(20580)
Other registered financial institutions/Resident and non-resident
- Minus: Non-due interests
20800
(20841)
(20842)
(20871)
(20895)
Deposits of Clients / Resident and non-resident
- Minus: Housing borrowing/Saving program accounts (1)
- Minus: Deposits of the housing body of non-conscript military men (1)
- Minus: Guarantees of documentary credits for import (1)
- Minus: Non-due interests
24300 Deposits originating from fiduciary contracts/Resident and non-
resident
20900
(20980)
Deposits of the public sector/Resident and non-resident
- Minus: Non-due interests
21000 Repayable values/For residents and non-residents
21210 Various creditors, Private sector/Residents and non-residents
104
21300
(21325)
(21330)
(21350)
Partners/Residents and non-residents
- Minus: Non-due interests
- Minus: Monetary benefits as a guarantee to doubtful debts (1)
- Minus: Deposits to increase shareholders’ equities (1)
21700
(21730)
Loans based on bonds/From residents and non-residents
- Minus: Non-due interests (1)
23000 Foreign branches
23100
(23180)
Mother institution, resident and non-resident sister and affiliated
financial institutions, except for resident commercial banks
- Minus: Non-due interests
23200 Out of which: Certificates of deposit and banking certificates sold to
other than resident commercial banks
23300
(23380)
Registered exchange institutions/Resident and non-resident
- Minus: Non-due interest
23700
(23780)
Intermediation institutions/Resident and non-resident
- Minus: Non-due interests
23800
(23880)
Leasing institutions/Resident and non-resident
- Minus: Non-due interests
Total of obligations in thousand LBP
(1) Accounts No 20841, 20842, 20871, 21330 and 21730 are discounted from term obligations.
105
Banque du Liban Form No: RO-11(2/5)
Name of the Bank: No:
Position closed on Wednesday on:
Authorized reductions from term obligations in LBP From term obligations
(thousand of LBP)
a-Balances of mid- and long-term loans
-Code a1: Mid- and long-term loans for productive sectors not mentioned below
-Code a2: Housing loans
-Code a3: Loans whose interests are subsidized, not mentioned below
-Code a31: Loans granted based on the convention signed between the Republic of Lebanon and the
European Investment Bank, whose interests are subsidized
-Code a32: Loans granted and financed by AFESD, AFD, OPIC, EIB, and IFC, whose interests are
subsidized
-Code a33: Loans granted in foreign currencies against a guarantee from AFESD, AFD, OPIC, EIB, and
IFC, whose interests are subsidized
-Code a34: Loans allocated to finance the needs of the operational capital of tourist institutions, whose
interests are subsidized
-Code a0: Loans for productive sectors, which have become within the postponed maturity period and
whose interests are no more subsidized
-Code a4: Loans granted in foreign currencies against a guarantee from Kafalat, whose interests are not
subsidized
-Code a5: Loans granted in foreign currencies against a guarantee from Kafalat, whose interests are
subsidized
-Code a8: Loans financed by AFESD, AFD, OPIC, EIB, and IFC, whose interests are not subsidized
-Code a9: Loans granted in foreign currencies against a guarantee from AFESD, AFD, OPIC, EIB, and IFC,
whose interests are not subsidized
b-Bonds and debt instruments
-Code b1: Bonds approved by the BDL, within the purchasing price limits
-Code b2: Purchased debt instruments in foreign currencies and credits granted to financial institutions
and collective investment institutions to be exclusively used to buy debt instruments in foreign
currencies
106
Code b21: Debt instruments from the public sector and relevant credits
Code b22: Debt instruments from the private sector and relevant credits
-Code b3: Debt instruments issued by the private sector and benefiting from discounts
Total of balances of loans, bonds and instruments benefiting from the reduction of term obligations (a+b)
107
Banque du Liban Form No: RO-11(3/5)
Name of the Bank: No:
Position closed on Wednesday on:
Authorized reductions from term obligations in LBP From term obligations
(thousand of LBP)
c-Loans granted in foreign currencies, benefiting from the reduction of term obligations by 200% of
their balances
-Code a35: Loans granted to finance environmentally friendly projects, whose interests are subsidized
-Code a11: Loans granted in foreign currencies to finance environmentally friendly projects in the non-
energy sector, whose interests are not subsidized
-Code a19: Balances of loans granted in foreign currencies to productive sectors not mentioned below,
benefiting from the incentives of 2009
-Code a29: Balances of housing loans granted in foreign currencies, benefiting from the incentives of
2009
-Code a49: Balances of loans granted in foreign currencies against a guarantee from Kafalat, whose
interests are not subsidized and benefiting from the incentives of 2009
-Code a89: Balances of granted loans financed by AFESD, AFD, OPIC, EIB, and IFC, whose interests are
not subsidized and benefiting from the incentives of 2009
-Code a99: Balances of loans granted in foreign currencies against a guarantee from AFD, OPIC, EIB, IFC,
and AFESD, whose interests are not subsidized and benefiting from the incentives of 2009
-Code v09: Balances of other loans granted in foreign currencies, benefiting from the incentives of 2009
Total of balances of loans benefiting from the reduction of term obligations by 200% from their
balances
(c)
d-Loans granted in foreign currencies, benefiting from the reduction of term obligations by 500% of
their balances
-Code a12: Loans granted in foreign currencies to finance environmentally friendly projects in the
energy sector, whose interests are not subsidized
-Code a13: Loans granted to finance environmentally friendly projects once the interests are no more
subsidized
Total of balances of loans benefiting from the reduction of term obligations by 500% of their
balances
(d)
Total of reductions from term obligations ((a+b) + (cx2)) + (dx5)
108
109
Banque du Liban Form No: RO-11(4/5)
Name of the Bank: No:
Position closed on Wednesday on:
Authorized discounts from the statutory reserve (1) Thousand of LBP
e-Balances of loans not benefiting from the incentives of 2009
-Code p: Housing loans granted in LBP, based on the protocol signed with the Public Housing Institute
-Code q1: Loans granted in LBP against a guarantee from Kafalat, whose debit interests are not subsidized
-Code q2: Loans granted in LBP against a guarantee from Kafalat, whose debit interests are subsidized
-Code q3: Loans granted in LBP to finance environmentally friendly projects in the energy sector against a
guarantee from Kafalat, whose debit interests are subsidized
-Code r: Loans granted in LBP against a guarantee from AFESD, AFD, OIC, EIB, and IFC, whose interests are
subsidized
-Code i: Housing loans financed by credits granted in LBP to the Banque de l’Habitat
-Code s: Loans granted in LBP directly to the Public Housing Institute
-Code m1: Housing loans granted in LBP, based on the protocol signed with the housing body of non-conscript
military men
-Code m2: Loans granted in LBP directly to the housing body of non-conscript military men
-Code m3: Loans granted by the housing body of non-conscript military men, before February 6, 2009, and
assigned in favor of the bank
-Code h1: Small loans in LBP granted with the approval of the micro-lending institutions
-Code h21: Small loans in LBP financed by the credits granted to micro-lending institutions
-Code h22: Small loans in LBP financed by the credits granted to financial institutions
-Code t: Loans granted in LBP against a guarantee from AFESD, AFD, OPIC, EIB, and IFC, whose interests are not
subsidized
-Code u: Loans granted in LBP to follow up the studies in higher education institutions
-Code ev1: Loans granted in LBP to finance environmentally friendly projects in the non-energy sector, whose
interests are not subsidized
-Code ev2: Loans granted in LBP to finance environmentally friendly projects in the energy sector, whose
interests are not subsidized
110
-Code ag: Agricultural loans granted in LBP, based on the protocol signed with the Ministry of Agriculture
-Code dp: Housing loans granted in LBP, based on the protocol signed with the Ministry of the Displaced
-Code jr: Housing loans granted in LPB, based on the protocol signed with the mutual fund of judges
-Code i10: Housing loans financed by loans granted to the Banque de l’Habitat, according to the decision of the
Central Council No 16/26/10, dated August 11, 2010
-Code fs: Housing loans granted in LBP, based on the protocol signed with the Directorate General of Internal
Security Forces
Remark: For the categories of loans not benefiting from the incentives of 2009, the adopted rates of
reduction from the statutory reserve are applied as follows:
(s+m1+m2+m3+h1+h21+h22+t+u+ev1+ag+dp+jr+i10+fs+q3)+0.6*(q1+q2+r)+0.65*(i)+0.8*(p)+1.5*(ev2)
111
Banque du Liban Form No: RO-11(5/5)
Name of the Bank: No:
Position closed on Wednesday on:
Authorized discounts from the statutory reserve (2) Thousand of LBP
f- Balances of loans benefiting from the incentives of 2009
-Code n19: Loans granted in LBP for productive sectors, whose debit interests are not subsidized and not
benefiting from the incentives of 2009
-Code n29: Housing loans granted in LBP, not benefiting from the incentives of 2009
-Code n09: Other loans granted in LBP, not benefiting from the incentives of 2009
-Code i09: Housing loans benefiting from the incentives of 2009, financed by credits granted in LBP to the
Banque de l’Habitat
Remark: For the categories of loans benefiting from the incentives of 2009, the adopted rates of
reduction from the statutory reserve are applied as follows:
0.6*(n19+n29+n09)+0.8*(i09)
112
ANNEX 6 : LIST OF LEBANESE SWH COMPANIES
113
114
115
116
117
118
119
120
121
122
Annex 7
SWH Presentation at the Workshop
“Energy Efficiency Study in Lebanon: Opportunities and Investments” June 27, 2011 at World Bank Office in Beirut, Lebanon.
<Presentation to be added>