Women s Energy Justice Network: CDM Financing and Microlending for Appropriate Technology REEEP Output # N3123 Center for Energy and Environmental Security University of Colorado at Boulder August 2010 0
Women s Energy Justice Network CDM Financing and Microlending for Appropriate Technology REEEP Output # N3123 Final Technical Report on Developing Successful ASET Projects in India through CDM and Microfinance Introduction This final technical report provides information on the Women s Energy Justice Network (WEJN) India Database, which was developed by the Center for Energy and Environmental Security (CEES) at the University of Colorado at Boulder. This relational database, available at http://www.womensenergyjustice.org/research.html, stores data related to appropriate and sustainable energy technology (ASET) dissemination projects in India and surrounding areas. The database is intended as a collective knowledge tool, allowing project funders, operators, and researchers to share information about India-based ASET projects in a single comprehensive resource. Information sharing as well as improved transparency and accountability in ASET dissemination projects may improve both the successfulness of projects and their access to carbon financing and micro financing resources. CEES researchers have seeded the WEJN India Database with over a hundred existing projects in order to provide a critical mass of data to encourage further participation. This technical report provides both an explanation of the database s capabilities and some initial analysis of the existing data set. While we cannot hope to have captured all existing projects in the initial research sweep, the analysis in this report likely represents a reasonable cross-section of projects. The WEJN India Database The WEJN India Database can store records of projects and project attributes. A user can view the following information about a given project: The project s name; The technology or technologies utilized in the project; The project s location, including a Google Maps plug-in, which allows the user to zoom in and out, and view both satellite and terrain modes; The financer, meaning the party that provided the capital for the project; The operator, meaning the party responsible for the implementation of the project; Financing information, referring to the type of financing used by the project; 1
The Certified/Verified Emission Reduction Certifier, meaning (where applicable), the third party responsible for certification of the project for issuance of carbon credits in a compliance or voluntary carbon market; The project s estimated CO2 equivalent emission reductions, if applicable; The source of information for the project; The project s benefits, meaning a brief description of the project and what it hopes to accomplish; any other project participants, meaning parties that are neither main financers or main operators of the project, but are otherwise involved; notes, generally containing information on the project s accomplishments and progress at the time of database entry; web link, where applicable; and a project file providing more information on the project, if the person entering the data wishes to provide it. A search function allows users to filter results by many of the attributes listed above. Database users may also upload their own projects into the database, and edit records. Users wishing to utilize this collaborative functionality must register with CEES first. Registration allows CEES to keep track of which users are making changes to what records. CEES loaded over 100 projects into the database in an initial seeding. While this certainly does not represent even a majority of existing projects which might be relevant, it is a relatively complete collection of India-based ASET dissemination projects that have provided information about their projects on the Internet. Many other efforts are no doubt underway that have not publicized their work through the Internet, and CEES hopes that many of these entities consider placing information about their projects in the Database so that others in the development and energy sector might learn about them. Analysis of the Current Dataset An analysis of the 100+ projects currently in the database yields some very clear trends in the types of technologies and financing most often utilized in India-based ASET projects, as well as a general sense of the geography of ASET projects by state. It is unclear whether these trends are universal or simply particular to the current dataset, which has a sampling bias in favor of projects that choose to share information on the internet. As more projects are added to the database by diverse users, trends should become more indicative of the entirety of existing projects. The most important observation to be drawn from the current dataset is a low incidence of utilization of carbon finance and micro finance. Of 109 projects, only 13 (12%) used carbon 2
financing to underwrite the project, and only 18 (16.5%) used microfinance. By contrast, 71 projects (65%) were part of or received funding from a government program, and 25 projects (23%) were funded by private foundations. 1 Number of Projects by Location Location West Bengal Uttaranchal Uttar Pradesh Tripura Tamil Nadu Sri Lanka Sikkim Rajasthan Punjab Pondicherry Orissa Nagaland Mizoram Meghalaya Manipur Maharashtra Madhya Pradesh Kerala Karnataka Jharkhand Jammu and Kashmir Himachal Pradesh Haryana Gujarat Goa Delhi Chhattisgarh Bihar Bhaogarh Assam Arunachal Pradesh Andhra Pradesh Andaman & Nicobar Islands number of projects utilizing CDM number of projects utilizing microfinance number of projects w/ neither carbon finance nor microfinance 0 1 2 3 4 5 6 7 8 9 10 Number of Discrete Projects 1 Note that percentages do not add up to 100%, because many projects utilized more than one type of funding. 3
An analysis of projects by technology type yielded a clear trend in favor of solar lanterns, biogas digesters, biomass gasification, and solar photovoltaics. Solar lanterns were used in 49 projects (45%), while biogas digesters were used in 40 projects (37%). 32 projects (29%) used solar photovoltaic systems, and 31 projects (28%) used biomass gasifiers. Many projects used more than one technology. Technology wind-solar hybrid systems wind generators water purifiers water pumping windmills vermicompost vegetable oil lanterns solar water pumps solar water heating solar water filters solar photovoltaics solar lanterns solar dryer solar distillation solar cooling solar cookers small hydro pressure cookers passive solar buildings liquefied petroleum gas improved cookstoves gasifier stoves gas engines energy efficient ovens grid electricity extension concentrating solar power charcoal briquettes biomass-fired power plant biomass gasification biogas biodiesel water pumps biodiesel Number of Projects by Technology 0 10 20 30 40 50 60 Number of Discrete Projects As with technologies, many projects utilized multiple financing types. Even so, government programs provided the lion s share of financing for the projects in the current dataset. 4
Number of Projects by Financing Type Financing Type underwritten by CERs/VERs traditional bank finance private foundation microfinance loan guarantees international aid government program Were the trends of the current data set to hold true as more projects were added to the database by diverse users, a number of relevant policy implications would arise. Carbon finance and micro finance are in large part underutilized by ASET projects in India. As other reports produced for the WEJN project detail, this may be for any number of reasons, including high transactions costs, the nature of ASETs as goods for living rather than business assets, simple lack of awareness, lack of available capital, or other procedural difficulties. Certainly, the Government of India is spending considerable sums of money to disseminate ASETs to impoverished citizens, and is generally doing so without the benefit of outside financing. The Indian Government could significantly reduce its expenditures on such projects if it could pass some of the costs of the projects on to carbon financers. Likewise, some dissemination costs might be more efficiently spread if technology recipients were part of a micro financing plan, and thus helped pay for the technologies over time. The Clean Development Mechanism s Programme of Activities (PoA) process provides a promising way forward for the Indian Government, as it allows the generation of compliance carbon credits from projects implementing governmental policies. CEES s project concept CDM Programme of Activities Concept on the WEJN website provides an example of such a strategy. Unlike micro finance strategies, which ultimately rely on impoverished technology recipients to finance the equipment through later productivity gains, carbon financing through CDM PoA draws value from markets outside of India to finance the project. Conclusion 0 10 20 30 40 50 60 70 80 Number of Discrete Projects The WEJN India database represents the beginning of a systematic approach to understanding the dissemination of ASETs. It will require buy-in and participation from a wide cross-section of organizations and programs working in India to alleviate poverty through sustainable energy deployment. While it is possible that the resource thus far produced would be adopted virally by diverse users without further marketing efforts beyond this project, it is not likely. Significant 5
work lies ahead in building support for the system and improving its functionality for users. New sources of funding should be identified in the future to carry out this work. 6