37655 GEF Global Action onRenewable Energy EXPANDING RENEWABLE ENERGY IN BANGLADESH Providing power without intensifying the effects of IMPROVING ACCESS TO FINANCING climate change is a priority for the people of AND BUILDING BUSINESS SKILLS Bangladesh, who know all too well what rising seas The renewable energy project cooperates with and more frequent storms can do to their coastal and builds on the tremendous efforts of such nation. The Government of Bangladesh has estab- organizations as Grameen Shakti, a subsidiary lished a goal of providing electrical power to all its of the Grameen Bank, and the Bangladesh citizens. Renewable energy is a key component of Rural Advancement Committee, the country's the initiative, and Bangladesh has already made largest nongovernmental organization (NGO). impressive gains in reaching the 85 percent of the Both are active partners in a program managed country's population that lives in rural areas. by IDCOL that has installed more than 25,000 solar home systems in the two years since the However, in many rural areas, people live too far GEF project began. from the main electrical grids to make connec- tions reliable or affordable. Without access, these The project works by combining a GEF grant with families are forced to rely on more expensive-- a line of credit to microfinance institutions and and nonrenewable--energy options such as NGOs to purchase solar home systems. Those kerosene or batteries. Even with 400,000 new organizations, in turn, provide small loans to indi- households gaining access to electricity every vidual consumers and village cooperatives inter- year, it could take another 40 years for all the ested in purchasing such systems. By shifting a people of Bangladesh to have power. portion of their monthly energy budget away from kerosene and batteries, families can afford To help speed that process, the GEF is undertak- modest investments in more reliable 20­40 watt ing an ambitious effort with the Government of solar home systems. That's enough to provide Bangladesh, the World Bank, and Bangladesh's lighting at night, help pump clean water, or keep Infrastructure Development Company Limited critical medicines cold. (IDCOL) to increase the spread of off-grid, renew- able energy technologies, such as solar home sys- Payback periods on the loans vary from one to tems. The Renewable Energy and Rural three years, and past experience has shown that Electrification project seeks to reduce barriers to even the poorest households make very reliable the use of these climate-friendly energy systems partners. To date, the vast majority of IDCOL's and grow the market for renewables. The project partner organizations are reporting a better than is building capacity through access to financing, 98 percent return rate on loan installments. business skills, training and technical skills, insti- tutional capacity, and consumer awareness.It BUILDING INSTITUTIONAL has already reached its goal of connecting CAPACITY 50,000 households with solar home systems Fully developing the infrastructure for renewables three years ahead of schedule. in Bangladesh requires more than just putting solar systems on the market. The project also works to technical performance of the solar home systems. remove the barriers to more widespread use of Five general inspectors, two technical inspectors, renewable systems and builds the skills of its part- and 40 local schoolteachers are part of a verifica- ner organizations. The project provides a package tion team that examines the systems before and of interventions to support Bangladeshi institutions after installation. in overcoming major market barriers. These institu- tions include rural electricity cooperatives, commu- PROMOTING CONSUMER nity-based organizations, NGOs, microfinance AWARENESS institutions, and private-sector groups. The renewable energy project is helping the pri- vate sector, NGOs, and microfinance institutions A key institution is the Rural Electrification Board, expand the solar energy program and establish which functions as a quasi-regulator and financial it on a commercial and sustainable basis. manager of the rural electricity program. The proj- Recognizing the importance of an informed ect supports the institutional development of the public, the project is increasing awareness among Rural Electrification Board by providing technical consumers and suppliers about the benefits and assistance for financial restructuring, monitoring the correct use of solar home systems. and evaluation, and environmental safeguards. LOOKING TO THE FUTURE The renewable energy project is also expanding Because solar home systems may not be as effi- the number of NGOs engaged in providing cient in some areas of the country, the project is energy services. One of the project's new partners also developing pilot renewable energy pro- is Upakulio Biddutayan O Mohila Unnayan Samity grams: two wind energy projects, two micro- (UBOMUS), a women's cooperative based in a hydro projects, and two biomass projects. These very remote area of the Barisal District. UBOMUS efforts will be critical to providing Bangladesh is one of five new partner organizations that have with the diversity of clean power sources it needs joined in this effort since the GEF project began. to bring the benefits of electricity to all of its 140 million citizens. IMPROVING TECHNICAL SKILLS AND PROVIDING TRAINING PROJECT BENEFITS Two important aspects of the project's capacity On a global scale, this project is expected to dis- building are improving the managerial skills of place nearly 260,000 tons of carbon dioxide over grassroots organizations involved in providing the next 15 years, primarily by reducing kerosene renewable energy services and increasing the use. But the most critical impacts will take place number of technicians trained to install and repair at the local level, in the form of improved health, solar home systems. Thanks to project support, more reliable water supplies, and greater oppor- IDCOL has developed a well-regarded database to tunities to improve livelihoods and promote truly monitor the program's progress and verify the sustainable development. FOR MORE INFORMATION Clare Fleming Global Environment Facility 1818 H Street NW Washington DC 20433 USA Tel: 202-473-0508 Fax: 202-522-3240 www.theGEF.org November 2005