scaling up renewable energy program (srep) · idcol is currently in the need of additional usd 28...

Expression of Interest

Scaling Up Renewable Energy Program (SREP)

under

Climate Investment Funds

24 April 2014

Infrastructure Development Company Limited

under

Economic Relations Division of the Ministry of Finance

Government of Bangladesh

I. COUNTRY AND GOVERNMENT AGENCY SUBMITTING EXPRESSION OF

INTEREST

Infrastructure Development Company Limited (IDCOL) is a government owned

development financial institution under the Economic Relations Division of the Ministry of

Finance of Bangladesh. It was established on 14 May 1997 jointly by the Government of

Bangladesh (GoB) and the World Bank and is licensed by Bangladesh Bank (the central

bank) as a non-bank financial institution (NBFI) on 5 January 1998. The mission of IDCOL

is to catalyze private sector participation in infrastructure, renewable energy, and energy

efficient projects in a sustainable manner.

The Company is managed by an eight-member independent Board of Directors comprising

four senior government officials, two prominent business personalities, and a full-time

Executive Director & CEO.

IDCOL extends long-term concessionary financing and grant as well as capacity

development supports to NGOs, micro-finance institutions and private entities in renewable

energy. It also provides long-term financing in both local and foreign currencies for the

development of infrastructure projects by the private sector. Besides, IDCOL provides

corporate and financial advisory supports in the national and international level in project

finance, financial modeling, off-grid rural electrification, etc.

IDCOL sources the required fund for financing from the GoB and multiple development

partners i.e. the World Bank, Asian Development Bank (ADB), Islamic Development Bank

(IDB), Department for International Development (DFID), Japan International Cooperation

Agency (JICA),German International Cooperation (GIZ), German Development

Cooperation (KfW), Global Environment Facility (GEF), U.S. Agency for International

Development (USAID), and Global Partnership On Output-based Aid (GPOBA).

As of June 2013, total assets, equity, paid-up capital, operating income, and net profit of

IDCOL were USD 477 million, USD 35.5 million, USD 22 million, USD 24 million and

USD 13 million, respectively. With total loan disbursement portfolio of USD 651 million,

IDCOL is the largest financier in private sector infrastructure and renewable energy projects

in Bangladesh.

IDCOL is disseminating different types of renewable energy technologies primarily in the

rural off-grid areas of the country. Its solar home system program is renowned worldwide as

the fastest growing off-grid renewable energy program in the world. It is also implementing

biogas program, improved cook-stoves program, solar mini-grid, solar irrigation pump,

biogas and biomass based electricity projects etc.

https://www.gov.uk/government/organisations/department-for-international-development

IDCOL is currently in the need of additional USD 28 million grant and USD 211 million

credit fund to achieve the target it has set up to 2017 under its renewable energy initiatives.

Out of this IDCOL is looking forward to receiving grant support of USD 15 million from

SREP under Climate Investment Fund.

II. DESCRIPTION OF THE COUNTRY AND ENERGY SECTOR CONTEXT:

Bangladesh has the world's eighth-largest population with more than 160 million1 people,

making it one of the world's most densely populated countries. The country is divided into

seven administrative divisions and 64 districts.

Bangladesh is identified as a Next Eleven economy. According to the United Nations in

2010, the country is making major strides in human development, including significant

progress in the areas of gender equity, universal primary education, the empowerment of

women, reducing population growth, food production, health and renewable energy. The

poverty rate has declined considerably since independence, and per-capita income has

doubled from 1975 levels. However, the country continues to face a number of major

challenges, including widespread poverty, overpopulation and vulnerability to global

climate change. Per capita income of the country is one of the lowest in the world.

Bangladesh's energy infrastructure is relatively small. The per capita energy consumption in

Bangladesh is one of the lowest in the world, which is 321 kWh2. Noncommercial energy

sources, such as wood fuel, animal waste, and crop residues, are estimated to account for

more than 50% of the energy consumption. Bangladesh has small reserves of oil and coal,

but very large natural gas resources.

Electricity is the major source of power for most of the country's economic activities. Only

62%3 of the population has access to electricity including 7% from renewable energy. Total

installed electric generation capacity was 10289 MW4 in January, 2014. About 67%

5 of

generated power comes from natural gas and the rest is from liquid fuel, coal and

hydropower. The present share of renewable energy is only 1.3%. Bangladesh has 130 MW6

solar energy capacity through rural households and 1.9 MW7 wind power.

1 http://www.powerdivision.gov.bd/user/brec/49/89

2 http://www.powerdivision.gov.bd/user/index

3 http://www.powerdivision.gov.bd/user/brec1/30/1

4 http://www.bpdb.gov.bd/bpdb/index.php?option=com_content&view=article&id=5&Itemid=6


6 Infrastructure Development Company Limited (IDCOL)


http://www.powerdivision.gov.bd/user/brec/49/89

http://www.powerdivision.gov.bd/user/index

http://www.powerdivision.gov.bd/user/brec1/30/1

http://www.bpdb.gov.bd/bpdb/index.php?option=com_content&view=article&id=5&Itemid=6



Government of Bangladesh has taken a systematic approach towards renewable energy

development. The initiative includes development of relevant policy and institutional

development. As part of the new generation expansion initiative in line with growing

demand, the Government has planned to enhance national power generation capacity to be

16000 MW8 by 2015. Expected generation from renewable sources should then be then at

least 800 MW.

III. RATIONALE FOR SELECTED SECTORS FOR SREP FINANCING:

Bangladesh has enormous potentiality in renewable energy development like solar, biogas,

biomass, etc.

Bangladesh receives an average daily solar radiation of 4-6.5 kWh/m29. Solar photovoltaic

(PV) are gaining acceptance for providing electricity to households and small businesses in

rural areas. Around 17 million households are located in off-grid areas. Of the off-grid

population, a vast majority (89% or 15 million households) is concentrated in rural

Bangladesh. This off-grid area is targeted for supplying solar home system (SHS). About 2.9

million SHSs have been installed till march 2014 under the program and total number of

beneficiaries electrified is 13 million-which is around 8.2% of total population. IDCOL has

a target to install 6 million SHSs within 2016 which would cover around 15% of total

population.

About 84%10

of the population directly or indirectly still depends on agriculture. The cattle

dung is still a principle source of fertilizer. Declining of soil fertility in Bangladesh is

attributed mainly to over-exploitation of land without proper replenishment of plant

nutrients in soils. Crop residues and animal dung are widely used as fuel rather than

fertilizer.

On the other hand, agriculture residues and dung are commonly available in and around the

household premises which can be used for biogas generation. Among the other potential

alternative sources of rural energy, biogas generated from animal dung is undoubtedly one

of the most appropriate sources of energy used for cooking in the rural communities.

Besides, residues from the biogas plant is very good fertilizer. Widespread use of biogas for

cooking purpose will help poverty reduction through savings on energy expenditure and

increase agriculture production by utilization of bio-slurry as high quality fertilizer. Other



10 http://www.moa.gov.bd/advertisement/IPM.htm



http://www.moa.gov.bd/advertisement/IPM.htm

impacts include better health through cleaner cooking energy and improved sanitation with

toilet construction and connection to bio-digester and gender equality through empowering

women in decision making and maximization of their participation in the program. At

present IDCOL finances biogas plants from 1.2 m3 to up to 4.8 m3 size.

According to the latest census of the bureau of statistics of Bangladesh, Bangladesh has

more than 97,000 poultry farms, 47,000 dairy farms for cattle fattening, 20,000 goat-farms

registered ship-firms 394. The livestock industry of Bangladesh produces about 419,789

ton wastes per day11

, polluting soil and water resources and creating environmental

hazards. Besides, cow dung produced in many dairy firms can also be used for biogas based

power generation. From this minimum 1,000 MW power can be produced. In addition, the

slurry produced as a by-product, is a very good organic fertilizer and can be used for

increasing agricultural productivity and maintaining soil stability.

IDCOL had so far financed 4 biogas based power plants with various capacities. The largest

one with 140 cubic meter biogas plant can run a 50 kW generator for 6 hours daily. These

plants are also selling biogas to the nearby households for cooking purposes.

Price hike of diesel has always been a major concern to the farmers of Bangladesh and the

Government historically has been subsidizing diesel price to keep cultivation cost low. On

the other hand, in grid areas frequent power shortage and low voltage disrupts the irrigation

facility causing lower production of crops. Considering the energy crisis and increasing

price of petroleum products, it is important to explore alternative energy sources for

irrigation to ensure both food and energy security. Solar powered irrigation system is an

innovative, economic and environmentally friendly solution for the agro-based economy of

Bangladesh. Solar panels utilize daily sunshine to generate electricity, which in turn, runs

the solar pump to provide uninterrupted irrigation water supply to the farmers. The

technology also has tremendous potential to reduce the demand for grid electricity.

In Bangladesh, solar irrigation pumps can supply water almost throughout the year due to

availability of adequate sunlight. However, initial investment of Solar Irrigation Pumps is

very high. Therefore, optimum utilization of the pump capacity has to be ensured. Solar

irrigation pump remains idle for a significant portion of the year especially during rainy

season. Therefore, IDCOL is exploring the possibility for alternative use of solar electricity

in nearby areas.

Bangladesh has potential for biomass gasification based electricity. More common biomass

resources available in the country are rice husk, crop residue, wood, jute stick, animal waste,

municipal waste, sugarcane bagasse etc. Exploration of these resources for electricity

generation is still at preliminary stage. Potentials for utilizing biogas technologies derived

11

Department of Livestock, Bangladesh

mainly from animal, kitchen and municipal wastes may be one of the promising renewable

energy resources for Bangladesh.

Micro hydro and mini hydro have limited potential in Bangladesh with exception of

Chittagong Hill Tracts. Hydropower assessments have identified some possible sites from

10 kW to 5 MW12

implementation of which is still at large.

However, potential of other renewable resources is still at the exploration stage. Potential of

wind energy is mainly in coastal areas and offshore islands and to determine extent of

potential wind resource mapping project is in process. Some of the development partners

and companies come forward for wind mapping in different parts of the country.

IV. ENABLING POLICY AND REGULATORY ENVIRONMENT:

The Government of Bangladesh adopted Renewable Energy Policy in 2008. Through this

policy the government is committed to facilitate both public and private sector investment in

renewable energy projects to substitute indigenous non- renewable energy supplies and scale

up contributions of existing renewable energy based electricity productions. The Policy

envisions 5% of total generation from renewable sources by 2015 and 10% of the same by

2020. The Government is planning to bring necessary amendments in the policy to attract

more local and foreign investors in this sector.

IDCOL, Government power utilities like Bangladesh Power Development Board (BPDB),

Rural Electrification Board (REB), Local Government Agency like Local Government

Engineering Directorate (LGED) and a significant number of private sector agencies

including NGOs are involved in renewable energy development. Noted Public Universities

and their affiliated Institutes are involved in research and development of Renewable Energy

Applications.

Establishment of a nodal agency, i.e. Sustainable and Renewable Energy Development

Authority (SREDA) as envisioned in the Renewable Energy Policy is underway. For the

interim period and to carry ahead initial formation activities of SREDA, a wing under Power

Division of the Ministry of Power, Energy and Mineral Resources has been set up. . There is

new wing on Sustainable Energy has been set up under Power Cell, the technical unit of

Power Division. The wing is extending technical support to the Renewable Energy Wing of

Power Division in formulation of relevant program and policy.

Establishment of separate directorates among the public utilities can carry forward research

and development of renewable energy technologies. With this purview, independent

renewable energy directorates have been set up under BPDB and REB. The directorates are

12



functioning at full extent. With the above governmental institutional support it is envisaged

that Renewable Energy development Program will gain momentum to reach the expected

target.

V. INSTITUTIONAL AND TECHNICAL CAPACITY:

IDCOL, as a government-owned financial institution, has been working in renewable energy

sector since 2003. It extends long-term financing and grant as well as capacity development

supports in renewable energy and provides long-term financing in both local and foreign

currencies for infrastructure projects. Besides, it provides corporate and financial advisory

supports in the national and international level in project finance, financial modeling, off-

grid rural electrification, etc.

Within IDCOL, there is a separate Renewable Energy department which is fully equipped to

manage renewable energy activities. There are five units under the department which are as

follows:

SHS Program Unit

Household Energy Program Unit- domestic biogas plants and improved cook-stoves

Renewable Energy Project Unit (solar mini-grid, irrigation pump, biogas and biomass

based power projects)

Technical Unit

Promotion and Capacity Building Unit

Environmental Unit

The first three units are responsible for implementation of different types of renewable

energy programs/projects while remaining three units extend necessary supports to these.

IDCOL also has different technical committees in each field comprising of local experts

who provide necessary technical support to IDCOL. In addition, IDCOL also takes supports

from local as well as foreign experts in different technologies through appointing them as

consultants under the programs/projects.

VI. PROGRAMS OF MDBs AND DEVELOPMENT PARTNERS:

IDCOL currently is involved in the following renewable energy activities:

1. Solar Home System (SHS) Program

2. Biogas Program

3. Improved Cook Stove Program

4. Renewable Energy Projects:

(a) Solar mini-grid

(b) Solar irrigation pump

(c) Biomass-based power plant;

(d) Biogas-based power projects

The descriptions of the programs/projects and the involvement of other multilateral

development banks are provided below:

1. Solar Home System (SHS) Program

The solar Home System Program of IDCOL started in 2003 as a key component of Rural

Electrification and Renewable Energy Development (REREDP) of the World Bank. The

objective of the program is to supply clean electricity in the energy starved off-grid rural

areas of Bangladesh and hence, supplement the Government’s vision of ensuring ‘Access to

Electricity for All’ by 2021.

Started in 2003, the program had an initial target of financing 50,000 SHSs by June 2008.

The target was achieved in September 2005, 3 years ahead of schedule and USD 2.0 million

below estimated project cost. Later, IDCOL revised its target to 1 million SHSs by 2012

which again was achieved in July 2011. Now IDCOL has a new target of financing 6 million

SHSs by 2016 and over 2.9 million SHS have been installed all over Bangladesh till March

2014. The total number of beneficiaries under the program is about 13 million rural people

which is more than 8.2% of the total population of the country.With funding support from

the World Bank, ADB, IDB, GEF, GIZ, KfW, USAID, JICA, DFID and GPOBA, more

than 60,000 SHS are now being installed every month under the program. The average year

to year installation growth is more than 58%.

At present 47 partner organizations are implementing the program. An independent PO

Selection Committee has the responsibility for selecting the POs based on some pre-

determined eligibility criteria. Two committees: Operations Committee and Technical

Standards Committee (TSC) are responsible to coordinate operational and technical aspects

of the program.

IDCOL provides refinancing and grant support to the POs. POs install the SHSs, extend

credit to the end customer and provide after sale services. IDCOL provides POs two grants

for the purchase of SHS - The buy-down grant (Grant A) to lower initial investment cost of

SHS and the institutional development grant (Grant B) for institutional development of POs.

IDCOL with a view to commercialize the program follows a phasing out subsidy scheme

over the years. Currently IDCOL is providing grant A amounting USD 20/ Euro 15 only for

the SHS up to 30Wp and grant B for newly recruited POs for first 5000 SHS. IDCOL has

decided to continue providing the grant A to small SHS which are targeted for poorer

segment of the community.

Besides, IDCOL refinance 70% -80% of the loans made to the households for purchase of

SHS by the NGOs/MFIs/private entities selected as POs. IDCOL extends loan at an interest

rate of 6%-9% with loan tenor of 5-7 years including 0.5-1 year grace period.

The program structure is provided in the following diagram:

The

following table shows projected installation of SHS up to FY 2016-17:

Installation

up to March

2014

Installation

in 2014

(Apr-Jun)

Installation

in 2014-15

Installation

in 2015-16

Installation

in 2016-17

Average Monthly Installation

65,000 71,500 78,650 86,515

Yearly Installation

195,000 858,000 943,800 1,100,440

Cumulative Installation 2,902,760 3,097,760 3,955,760 4,899,560 6,000,000

The current status of loan fund available to IDCOL under SHS program as well as additional

requirement are shown in the following tables:

i. Status of Loan Fund

in USD million

Donors Total Loan

Amount for SHS

Disbursed up to

March 2014 Balance

IDA 346.5 309.6 36.9

ADB 88.0 78.0 10.0

IDB 16.7 16.7 0.0

JICA 88.4 31.3 57.1

Reflows 134.0 0.0 134.0

IDA (Proposed) 62.9 0.0 62.9

TOTAL 736.5 435.6 300.9

i. Requirement of Additional Loan

in USD million

2013-14

(Apr-Jun) 2014-15 2015-16 2016-17 Total

Fund requirement 58 130 143 176 507

Year-wise Fund Utilization 58 130 71 41.9 300.9

Shortfall 0 0 72 134 206.1

Therefore, requirement for additional Loan amount is USD 206 million.

The current status of grant fund available to IDCOL under SHS program as well as

additional requirement are shown in the following tables.

i. Status of Grant Fund

in USD million

Donors Total Grant

Amount

Disbursed up to

March 2014 Balance

GEF 7.0 7.0 0

GIZ 14.6 11.9 2.7

KfW 19.0 19.0 0.0

IDA 9.8 9.8 0.0

GPOBA 12.8 12.8 0.0

ADB Grant 2.0 2.0 0.0

USAID 3.4 1.6 1.8

DFID 23.8 1.9 21.9

TOTAL 92.4 66.0 26.4

i. Requirement of Additional Grant

Unit

2013-14

(Apr-Jun) 2014-15 2015-16 2016-17 Total

Grant required for Small SHS 110,306 481,650 529,815 716,912 1,838,683

Fund requirement USD

million

4.3 9.6 10.6 12.7 35

Utilization 4.3 9.6 10.6 0.9

Shortfall 0 0 0 10.8 10.8

Therefore requirement for additional grant amount is USD 11 million. Therefore, Total

additional fund requirement including loan and grant is USD 217 million.

2. IDCOL Biogas Program

With support from SNV, Netherlands and KfW, Germany, the Biogas Program of IDCOL

started as National Domestic Biogas and Manure Program in 2006. In 2012, the World Bank

started providing supports as well. Till December 2013, more than 32,000 biogas plants

have been installed all over Bangladesh.

Gas produced from these plants is used primarily for cooking purposes in rural households.

In addition, an average biogas plant produces about 2.4 ton organic fertilizers per year.The

program has declined yearly consumption of firewood by about 30,000 ton a year and

reduced emission of CO2 by about 96,000 ton a year. IDCOL is in the process of registering

the program as a CDM project under UNFCCC.

IDCOL currently promotes and finances biogas plants in the remote rural areas of

Bangladesh through its 24 partners known as Participating Organizations (POs). POs are

mainly NGOs, MFIs and private sector companies. The POs identify project areas and

potential customers, extend microcredit, procure biogas plants from IDCOL approved

suppliers, install the plants and provide maintenance and after-sales supports. At present 28

partner organizations are implementing the program. An independent PO Selection

Committee has the responsibility for selecting the POs based on some pre-determined

eligibility criteria. Two committees: Operations Committee and Technical Standards

Committee (TSC) are responsible to coordinate operational and technical aspects.

Under the program, the customers are required to pay minimum 15% of the plant cost as

down-payment to buy the plant on credit. Remaining 85% of the plant cost is financed

through loan from POs to the customers. Subsequently, 80% of this loan amount (or 68% of

the plant cost) is refinanced by IDCOL. Therefore, POs finance 20% of the loan amount (or

17% of the plant cost) from their own sources.

The terms and conditions of IDCOL loan to POs is provided below:

Interest rate :6% p.a.

Loan tenor :Up to 7 years

Grace period : 1 year

Notably, loan from POs to the customers is only for 3 years which allows the POs to roll

over the reflows of their loan. IDCOL provides grant amounting to USD 173 (BDT 13,500)

directly to the PO.

The program structure is provided in the following diagram:

The current fund status and required fund regarding Biogas Program is shown below:

i. Status of Fund (Grant and Loan)

Donors

Grant Loan Availability

Period Allocation Disbursed

up to Dec'13 Balance Allocation

Disbursed

up to Dec'13 Balance

KfW 5.6 1.7 3.8 2.5 2.5 - 31/Dec/12

SNV Netherlands 5.9 5.9 - - - - 31/Dec/12

IDA (5158) 3.0 - 3.0 - - - 31/Dec/18

IDA (Proposed) 5.9 - 5.9 - - -

IDCOL Own Fund - - - 18.0 - 18.0

TOTAL 20.3 7.6 12.7 20.5 2.5 18.0 -

ii. Projection of Addition Fund requirement:

Grant and Credit Requirement (million USD)

2013-14 2014-15 2015-16 2016-17 2017-18 Total

Subsidy 0.6 1.7 2.6 3.5 3.5 11.9

Program Activity Cost 0.3 0.7 0.8 1.0 1.1 3.9

IDCOL Fee 0.0 0.1 0.2 0.3 0.3 0.9

Credit 1.0 2.7 4.0 5.3 5.4 18.3

Total 1.9 5.2 7.6 10.0 10.2 35

There requirement for additional grant amount is USD 4 million. However, IDCOL does

not have any requirement for loan.

3. Renewable Energy Projects:

a) Solar Mini-Grid Projects

IDCOL provides financial and technical supports to the private sector sponsors to

implement solar mini-grid projects by sourcing credit fund from the World Bank and JICA

as well as grant fund from KfW, USAID, GPOBA, and ADB.

IDCOL provides supports to install solar PV based mini grids to different organizations

including non-government organizations (NGOs), micro-finance institutions (MFIs)

and/or private sector companies. Individuals are not currently eligible to apply for

receiving financial assistance under the projects. Project Sponsors are responsible for

selection of areas and target customers. They will install, operate the plants, supply

electricity to the customers, and will collect electricity bills from the customers.

The sponsors are required to conduct detailed survey of the proposed sites, calculate the

electricity demand at different hours of the day and different seasons of the year. Based on

the survey, they, in assistance with an appointed technical consultant and IDCOL, prepare

the design of the plant which will include panel capacity, size of battery bank, need for

back-up diesel generator in cloudy days etc. IDCOL physically verifies the demand survey

conducted by the sponsors.

IDCOL provides necessary technical and financial support to the sponsors for successful

implementation of the projects. IDCOL assesses the proposals submitted by sponsors, and

disburses grant and soft loan to the sponsors. Proper installation and operation of the

plants are ensured through periodic field visits by IDCOL.

Once implemented, the mini grid plants are monitored by IDCOL monitoring team and

environmental consultant at certain frequency to ensure smooth operation of the mini grid

systems. The suppliers of the components of the mini grid plants also provide after sales

services on call basis.

IDCOL provides financial support to solar mini grid projects based on debt, equity and

grant ratio of 30%:20%:50%. The terms of the debt facility are as below:

Interest rate : 6% p.a.

Loan tenor : Up to 10 years

Grace period : 2 years

Repayment :32 equal quarterly installments

By 2017, IDCOL has a target to finance 50 micro-grid projects.Projection of installation of

mini-grid plants till 2016-17 is given in the following table:

Up to

2012-13 2013-14 2014-15 2015-16 2016-17

Yearly Installation 1 5 8 15 21

Cumulative Installation 1 6 14 29 50

b) Solar Irrigation Projects

IDCOL is currently implementing solar irrigation pump program with a view to replacing

diesel-run pumps which in turn will reduce the burden of subsidy and reliance on fossil

fuel for irrigation purpose. The eligibility criteria of a suitable project location include off-

grid area, suitability to produce 3 crops per year, free from flood, arsenic or saline water

etc.

Under IDCOL Solar Irrigation Program, pumps with 5-11 kWp capacity and dynamic

head ranging from 10-18 meters are being used. These pumps can supply 500,000-600,000

liters of water per day providing irrigation facility for 1,500 decimal for paddy and 3,500

decimal for vegetable cultivation per season.

IDCOL provides financial and technical supports to the private sector sponsors to

implement such projects through sourcing credit fund from the World Bank and JICA as

well as grant fund from BCCRF, USAID, GPOBA, KfW and ADB.

IDCOL provides supports to install solar irrigation pumps to different organizations i.e.

non-government organizations (NGOs), micro-finance institutions (MFIs) and/or private

sector companies. The role of the project sponsor is to identify project location based on

established criteria, motivating farmer groups through providing orientation on the

technology, arranging project land for installation of solar irrigation pumps, carry on

environmental and social screening in the project sites, collecting quotations and selecting

suppliers from reputed and well established supplier pool who will install the pump

system. The responsibilities of appraisal of each project proposal, approval and

disbursement of fund rest solely with IDCOL.

Once implemented, a pump system is regularly monitored by IDCOL monitoring team and

environmental consultant at certain frequency to ensure smooth operation of the pump

systems. The suppliers of the pump systems also provide after sales services on call basis.

IDCOL provides financial support to solar irrigation projects based on debt, equity and

grant ratio of 40%:20%:40%. The terms of the debt facility are as below:

Interest rate : 6% per annum

Loan tenor : 8 years

Grace period : 9 months

Repayment : 29 equal quarterly installments

Projection of installation of solar irrigation pumps till 2016-17 is given below:

Up to

2012-13 2013-14 2014-15 2015-16 2016-17

Number of pumps 17 150 300 450 633

Cumulative Installation 17 167 467 917 1550

c) Biogas Based Electricity Projects

IDCOL also finances commercial biogas based electricity projects for captive

consumption. These projects may be located at grid or off-grid areas. The target sponsors

are dairy or poultry farms which has sufficient livestock to produce slurry to be fed into

the biogas digesters for producing electricity.

The projects are financed with a mix of debt and grant. For smaller capacity plants (below

100 kWp) IDCOL may consider grant up to 20% for making the projects commercially

viable.

Investment terms and conditions for biogas based power generation projects are as below:

Maximum grant limit : 20% of the project cost

(for smaller plants only)

Maximum debt limit : 80% of the project cost

Interest rate :9% p.a.

Loan tenor : 8 years

Grace period : 1 year

IDCOL has a target to finance 129 biogas based power plants with 50 kW of average

capacity by 2017-18, requiring about USD 10.1 financing in both loan and grant. Year-

wise installation target is as follows:

Up to

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Total

Number of plants 4 10 20 25 30 40 129

The current status of grant fund as well as additional fund requirement are as follows:

i. Status of Grant Fund

Donors

Grant

Allocation Disbursed up

to Dec'13 Balance

KfW 1.3 0.5 0.8

GPOBA (DFID) 1.0 - 1.0

ADB Grant (ACEF & CCF) 0.7 - 0.7

BCCRF 9 - 9

USAID 3.5 - 3.5

DFID 3.2 - 3.2

KfW 13.0 - 13.0

TOTAL 31.7 0.5 31.2

ii. Additional Requirement of Grant Fund

In USD million

2013-

14

2014-

15 2015-16 2016-17

2017-

18 Total

Mini Grid 1.8 2.8 5.3 7.4 - 17.2

Solar Water Pump for Irrigation 2.4

4.6 6.8 9.6 1.5 25.0

Biogas based Power Plant 0.2 0.3 0.4 0.5 0.6 1.9

44

Therefore requirement for additional grant amount is USD 13 million.

The current status of credit fund as well as additional fund requirement are as follows:

i. Status of Credit Fund

Donors

Loan

Allocation Disbursed up to

Dec'13 Balance

IDA (5013) 0.3 0.3 -

IDA (5158) 16.2 - 16.2

JICA 18.6 - 18.6

IDA Additional (Proposed) 3.4 - 3.4

TOTAL 35.1 0.3 34.8

i. Status of Credit Fund

In USD million

2013-

14

2014-

15

2015-

16 2016-17 2017-18 Total

Mini Grid 1.1 1.7 3.2 4.4 - 10.3

Solar Water Pump for

Irrigation 2.3 4.6 6.8 9.6 1.5 24.8

Biogas based Power Plant 0.4 0.8 0.9 1.1 1.5 4.7

*some irrigation pump has been installed but fund is yet to be disbursed 40

Therefore, requirement for additional credit amount is USD 5 million. In total, IDCOL's

additional fund requirement including credit and grant is USD 18 million.

scaling up renewable energy program (srep) · idcol is currently in the need of additional usd 28...

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