Bangladesh: Supporting Brick Sector Development Program

Sovereign Project | 45273-002 Status: Active

Summary

An ADB sovereign loan in the amount of $50 million complements this government initiative by providing targeted finance (through a credit facility) to build up initial energy efficient brick kiln replacement capacity and help facilitate the phase-out of FCKs. The proposed TA will complement the ADB credit facility by supporting a comprehensive brick sector development program. It will help promote market awareness and generate demand for funds (to construct energy efficient kilns), provide business and brick kiln operational support, minimize negative social impacts from phasing out FCKs, create a long-term brick sector development roadmap, formulate sustainable sector policy and regulation, and advance new building techniques.

Latest Project Documents

Consulting Notices See also: CMS

No notices are currently available for this project.

Procurement Notices See also: Operational Procurement

No notices are currently available for this project.

Procurement Documents

None currently available.


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

 
Project Name Supporting Brick Sector Development Program
Project Number 45273-002
Country Bangladesh
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8197-BAN: Supporting Brick Sector Development Program
Clean Energy Fund under the Clean Energy Financing Partnership Facility US$ 750,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Energy - Energy efficiency and conservation

Finance - Small and medium enterprise finance and leasing

Industry and trade - Small and medium enterprise development

Gender Equity and Mainstreaming
Description An ADB sovereign loan in the amount of $50 million complements this government initiative by providing targeted finance (through a credit facility) to build up initial energy efficient brick kiln replacement capacity and help facilitate the phase-out of FCKs. The proposed TA will complement the ADB credit facility by supporting a comprehensive brick sector development program. It will help promote market awareness and generate demand for funds (to construct energy efficient kilns), provide business and brick kiln operational support, minimize negative social impacts from phasing out FCKs, create a long-term brick sector development roadmap, formulate sustainable sector policy and regulation, and advance new building techniques. It will also coordinate with ongoing and planned similar assistance programs from relevant development partners and assess the possibility to establish a Bangladesh national brick technical and information center (center) as a one-stop-shop to meet all the brick sector's development needs. The TA will therefore be critical towards effective and timely implementation of the ADB credit facility (project loan).
Project Rationale and Linkage to Country/Regional Strategy

Promoting energy efficiency and environmental sustainability is a key part of Bangladesh's sixth five year plan (2011-2015). However, the prevalence of the primitive brickfields throughout Bangladesh has contributed negatively to the country's greenhouse gas emissions (GHG) and fine particulate pollution. The causes are multifaceted. There is a lack of a comprehensive sector policy and development plan. As a result, the brick sector is poorly regulated and ill-informed of the latest technologies. Instead of a small number of highly efficient modern brickfields, a large number of unqualified small businesses operate on the back of outmoded technologies, severe industrial pollution, and poor labor standards. Without intervention, the existing brick sector will continue to burn at least 6.0 million tons of coal and emit at least 9.8 million tons of carbon dioxide (CO2) a year, and increase land-use change emissions.

There are six basic types of brick kiln in Bangladesh: (i) bull's trench kiln, (ii) fixed chimney kiln (FCK), (iii) zigzag kiln, (iv) vertical shaft brick kiln (VSBK), (v) Hoffman kiln, and (vi) tunnel kiln. From (i) to (vi), bull's trench kiln is the least energy-efficient and most polluting, and tunnel kiln is the most energy-efficient and the least polluting. There are also modified (or improved) zigzag kiln and hybrid Hoffman kiln (HHK), which are based on traditional designs but are more energy-efficient than their prototypes. FCKs can be upgraded to improved zigzag kilns because of the similar mechanical designs. Currently, 92% of the 4,880 brickfields in Bangladesh are using the highly polluting FCK design. Improved zigzag kilns, VSBKs, HHKs, and tunnel kilns are rare because of the general lack of awareness of these technologies and the inadequate market funding support.

To improve the environmental condition associated with the brick sector, Ministry of Environment and Forests (MOEF) issued a directive on 15 July 2010, requiring that (i) no annual FCK licenses be renewed after September 2012; (ii) environmental clearance favor more energy-efficient improved zigzag kilns, VSBKs and HHKs; and (iii) all FCKs cease to exist from September 2013. However, there is a lack of corresponding financing scheme and complementary sector development program to support this initiative.

Impact

Project Outcome

Description of Outcome Expedited brick sector modernization
Progress Toward Outcome Due to changing market and other conditions that diverted from the initial plan to upgrade the traditional brick kilns to a more energy efficiency design by phasing out the traditional brick kilns, there has been no demand for the upgradation (from traditional FCKs to more efficient brick kilns). Government standards are also not available to guide the conversion process. A change in loans' scope has been approved to allow the ADB funds to support any energy efficiency brick kiln that would meet the required technical, safeguard, commercial, and operational standards set forth in the project agreements, but gave the upgradation process priority. Out of initial disbursement of $33 million, $15 million was liquidated and $10 million was approved for implementation in compliance with project requirements.
Implementation Progress
Description of Project Outputs

Government delivers a long-term brick sector policy, strategy, and action plan for adoption

Market awareness for energy-efficient brick kilns and provision of business support to subborrowers improved

Effective ADB loan implementation

Research and development in advanced building materials promoted

Status of Implementation Progress (Outputs, Activities, and Issues) Due to a number of factors, the phasing-out of traditional, inefficient brick kilns was not executed effectively. As a result, the demand for ADB funds from the associated credit facility for conversion of fixed chimney kilns to energy efficient kilns became limited. No brick kiln standards were set within the country. In the technical verification reports, Chinese standards were considered. Under the TA, there was also a weak implementation capacity and poor consultant performance. Despite some workshops, and technical and (environment and social) safeguard reviews, the consultants were unable to deliver a number of other TA outputs, including (i) a brick sector policy, roadmap and action plan and (ii) advanced building materials proposed. A brick sector technical center was not established within the Department of Environment. ADB recruited three consultants to complete the outputs under the TA, primarily to prepare technical verification reports, and social safeguards and environmental due diligence reports for the subprojects of energy efficient brick fields to be approved under the associated loans.
Geographical Location

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design

ADB has conducted extensive stakeholder consultations during the processing of the sovereign loan and designing the proposed TA. A series of meetings have been conducted on the program design and implementation details with proposed EAs and IAs and other relevant institutions, including Bangladesh Bank, DOE, MOEF, Ministry of Finance (Bank & Financial Institutions Division, Finance Division, and Economic Relations Department), and MOIND. ADB will also visit the Ministry of Social Welfare, Ministry of Health and Family Welfare, and Ministry of Labour and Employment during the TA fact finding to ascertain their support for the brick sector program to minimize the social impact.

ADB has also conducted additional consultation with Bangladesh Brick Manufacturing Owners Association; Britic Wall Material Co., Ltd (Bangladesh); Diamond Auto Bricks Limited/Nestor Consulting; Clean Energy Alternatives; SME Foundation; Women Entrepreneurs Association of Bangladesh (or WEAB); Xi'an Research and Design Institute of Wall and Roof Materials; Eastern Bank Limited and many potential business investors. The purpose is to ascertain local market demand for energy efficient brick kiln technologies; appetite for financing and technical capacity development; need for project implementation support; and need to strengthen environmental and social safeguards, gender, and labor conditions. In addition, ADB has further consulted a number of potential PFIs including Agrani Bank Limited, Infrastructure Development Company Limited (IDCOL), Industrial and Infrastructure Development Finance Company Limited (IIDFC), Mutual Trust Bank, and Sonali Bank Limited.

Finally, ADB consulted relevant development partners working in the brick sector in Bangladesh (the World Bank, UNDP, and GIZ), particularly on the donor coordination and the possible establishment of the national brick center.

During Project Implementation ADB has conducted frequent, often monthly, reviews on the project implementation. All relevant government and public entities are well involved. Site visits and consultations are required as a part of the social safeguard and environmental compliance requirements. Several workshops were conducted involving the stakeholders in brick sector to raise awareness of the facility and formulate a policy guideline.

Business Opportunities

Consulting Services Four international consultants (36 person-months on an intermittent basis) and five national consultants (44 person-months on an intermittent basis) recruited through a firm. The performance of the firm was not satisfactory and the contract was not extended. Instead, three consultants have been recruited, primarily to prepare Technical verification reports, social safeguards, and environmental due diligence reports for approving energy-efficient and less carbon di oxide emission brick sub-projects under the associated loans. Consultants were recruited in accordance with its Guidelines on the Use of Consultants (2010, as amended from time to time).
Procurement Procurement of goods will follow ADB's Procurement Guidelines (2010, as amended from time to time), and any equipment purchased under this TA will be handed over to the MOEF at the closure of the TA.

Responsible Staff

Responsible ADB Officer Nazmul Alam
Responsible ADB Department South Asia Department
Responsible ADB Division Bangladesh Resident Mission
Executing Agencies
Ministry of Environment and Forest
Building No. 6(13th floor),Bangladesh
Secretariat, Dhaka

Timetable

Concept Clearance 11 Jul 2012
Fact Finding 24 Jul 2012 to 26 Jul 2012
MRM -
Approval 22 Oct 2012
Last Review Mission -
Last PDS Update 30 Mar 2016

TA 8197-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Oct 2012 31 Mar 2013 31 Mar 2013 31 Dec 2014 31 Dec 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 750,000.00 0.00 0.00 0.00 0.00 750,000.00 22 Oct 2012 274,028.65
Title Document Type Document Date
Supporting Brick Sector Development Program Technical Assistance Reports Oct 2012
Supporting Brick Sector Development Program Technical Assistance Reports Oct 2012

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.