|Project Name||Integrated Renewable Energy Development Project|
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Energy / Renewable energy generation - small hydro - Renewable energy generation - wind
|Gender Equity and Mainstreaming||No gender elements|
|Project Rationale and Linkage to Country/Regional Strategy||
? Cognizant of pivotal roles of the power sector development for economic growth and poverty reduction, the government of India has confirmed its mission to provide electricity to all households at an affordable price by 2012. This goal of 'Power for All by 2012' has been elaborated into subsector-wise policies in National Electricity Policy, which was prepared in February 2005 in accordance with the Electricity Act, 2003. The magnitude of investment needs for achieving the goal is vast. Net capacity addition of 100,000MW will be required under the 10th and 11th Plan periods, out of which about 61,000MW will be needed during the 11th Plan period. As its development can have the considerable impact on the global, regional, and national environment and energy security, the Government set out Integrated Energy Policy (IEP) in August 2006 with a vision to reliably meet the demand for energy services of all sectors with safe, clean and convenient energy in a technically efficient, economically viable and environmentally sustainable manner. IEP provides specific measures including optimizing power supply mix through greater use of indigenous hydropower resources and renewable energy.
? India is blessed with an abundance of renewable energy sources. In the 11th New and Renewable Energy five-year plan, the Government forecasts the renewable energy market in India will reach an estimated $19 billion from 2008-2012. Investments of $15 billion will be required in order to add the approximately 15,000 megawatts (MW) of renewable energy to the present installed capacity. The Government has set specific targets for renewable energy: by 2012 it expects renewable energy to contribute 10% of total power generation capacity and have a 4-5% share in the electricity mix.
? From 2002 to 2007, there was 3,075 MW of renewable grid-tied power planned, but the actual capacity addition exceeded 6,000 MW by 2006. A large share of this was the result of exceptional growth of wind energy in India. Wind energy is expected to add more than 10,000 MW of additional capacity by 2012, followed by small hydro (1,400 MW), co-generation (1,200 MW) and biomass (500 MW). Thus, the Government's current focus is on commercialization of solar energy development through the cutting-edge technology transfer. Grid-connected solar-photovoltaic (SPV) sector has experienced a scale up, with new technologies and manufacturing capacity in India. With the success of grid-tied solar electricity in other countries, and new state-level initiatives for feed-in tariffs, the outlook for this segment is now positive. The government has set aside US $50 million to subsidize solar power when its costs match those of small hydro.
? However, there exist various challenges for development of renewable energy (RE) projects. The challenges include (i) lack of large-scale project because of the size of each RE project, (ii) weak credibility of incentive mechanism, (iii) marginal commercial viability, (iv) undeveloped energy service companies (ESCO) industry, (v) lack of marketing mechanisms and (vi) easy availability of conventional energy with established networking arrangements.
? To overcome the issues, the Ministry of New and Renewable Energy plans to conduct three types of solar energy pilot projects (the Pilot Projects) taking a innovative public-private partnership (PPP) approach, i.e., (i) 25 MW Solar Thermal Power Plants, (ii) 25 MW Solar Photovoltaic (SPV) Power Plants, and (iii) Bundled small grid-connected roof-top SPV projects at government building.
? ADB's public sector operation, complementary to private sector operation each other with a great synergy, will catalyze the private-sector-driven RE development effectively because (i) government involvements will enhance the credibility and accountability to private sector participants, (ii) concessional resources for gap-financing will be strategically and effectively allocated to various RE areas and projects,
|Impact||The impact of the proposed TA and outcome of the follow-on sovereign financial intermediary loan to Indian Renewable Energy Development Agency Limited (IREDA) will be to implement low carbon energy sector development through renewable energy development in the area where the government or intervention or gap-financing is needed.|
|Description of Outcome||The PPTA, with a great focus on the solar energy development, will identify and implement three solar energy pilot subprojects taking public-private partnership (PPP) approach, i.e., (i) 25 MW Solar Thermal Power Plant Projects in Rahasthan and other states, (ii) 25 MW Solar Photovoltaic (SPV) Power Plant Projects in Tamil Nadu and other states, and (iii) Bundled small grid-connected rooftop SPV Projects at government buildings in Delhi and other states. ADB will provide the loan to the projects, if possible, with some concessionality. Other outcome will be (i) enhanced policy and regulatory frameworks at the central and state level, and (ii) strengthened capacity of IREDA, and the state renewable energy development agencies (SREDAs).|
|Progress Toward Outcome||TA has been completed.|
|Description of Project Outputs||The main outputs will be assisting the Ministry of New and Renewable Energy (MNRE) and the pilot state governments to (i) conduct due diligence works of IREDA, and (ii) implement corporate and sector governance enhancement program. The TA wil also conduct (i) RE sector analysis, (ii) research study on gap financing methodology, and (iii) outreach programs. The key activities, among others, are as follows - Activity 1: Due Diligence Works of IREDA and Assistance to IREDA to Prepare Four to Five Pilot Subprojects-The TA will conduct due diligence works of IREDA including financial, technical and institutional capacity assessment, and assist IREDA to finance four to five pilot solar subprojects. Activity 2: Sector Analysis-The TA will conduct RE sector analysis, e.g., review of the related policy and regulatory frame works and barriers identification such as capacity of IREDA and SREDAs. Activity 3: Sector and Corporate Governance Enhancement Program for the Pilot Projects-The TA will analyze the sector and corporate (IREDA and SREDAs) governance structure to ensure accountability and transparency and propose necessary assistances under this PPTA or possible piggy-back TA to the ensuing loan. Activity 4: Gap Finance Methodology Development-The TA will research and propose the relevant models of gap financing methodology to promote technology transfer assuming various concessional financing or grant provision will be available in the future. Activity 5: Outreach Program-An outreach program will be conducted to disseminate the central and state governments' renewable energy initiatives and to raise the attention of potential private sector participants in the RE subprojects.|
|Status of Implementation Progress (Outputs, Activities, and Issues)||All activities/outputs envisaged under the TA had been implemented.|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||The TA will require the services of 5 international consultants for 32 person-months and 5 domestic consultants for 50 person-months, for a total of 82 person-months. The international consulting team will include two international renewable energy engineers, an international legal specialist (financial structuring), an international sector specialist, a national RE specialist, a national legal specialist, and a national economic and financial specialist. ADB will recruit the consultants in accordance with its Guidlines on the Use of Consultants.|
|Responsible ADB Officer||Sakai, Naoki|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Energy Division, SARD|
Ministry of New and Renewable Energy (MNRE)
Block No. 14, CGO Complex Lodi Road, New Delhi 110003 Government of India
|Concept Clearance||30 May 2008|
|Fact Finding||31 May 2008 to 01 Jun 2008|
|Approval||21 Jul 2008|
|Last Review Mission||-|
|PDS Creation Date||02 Jun 2008|
|Last PDS Update||28 Sep 2012|
|Approval||Signing Date||Effectivity Date||Closing|
|21 Jul 2008||18 Aug 2008||18 Aug 2008||28 Feb 2010||31 Dec 2011||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|1,400,000.00||0.00||500,000.00||0.00||0.00||0.00||1,900,000.00||21 Jul 2008||627,459.90|
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