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.
|Project Name||Supporting Brick Sector Development Program|
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Governance and capacity development
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||Improved environmental conditions in Bangladesh|
|Description of Outcome||Expedited brick sector modernization|
|Progress Toward Outcome||The Bangladesh Bank has signed participation agreements with 53 financial institutions (35 banking institutions and 18 non-banking institutions). To date, ADB disbursed $33 million as imprest advance, of which $16.2 million has been liquidated so far for eight subprojects. Out of unliquidated $16.8 million, five sub-projects of $16.4 million were approved for contract award and the subprojects are in construction phase; and four subprojects for ADB financing of $12.5 million are with Bangladesh Bank for three months for sending to ADB for approval.|
|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)||
1a. Proposed brick sector policy, strategy, and action plan adopted by relevant bodies by December 2014
Draft brick sector policy prepared.
1b. A signed memorandum of understanding for setting up a national brick center signed, with committed funding, by participating donors by December 2014.
MOU has not been signed due to lack of coordination among DOE, ADB, UNDP, and World Bank. Instead ADB and DOE has set up a brick center at DOE. ADB provided some basic equipment to measure GHG emission from brick manufacturing plants. and DOE.
2a. Disbursement of ADB loans of at least 20% and 30% during the first 2 years of implementation
ADB disbursed $33 million as imprest advance, of which $16.2 million has been liquidated so far for eight subprojects. Out of unliquidated $16.8 million, five sub-projects of $16.4 million were approved for contract award and the subprojects are in construction phase; and four subprojects for ADB financing of $12.5 million are with Bangladesh Bank for three months for sending to ADB for approval.
3a. 100% compliance with subloan environmental, social, gender, labor, and other safeguard measures during 2013 -2014
All subprojects financed under the project complied fully with all safeguard measures
3b. DOE's establishment of a technical support desk and publication of brick kiln operation and troubleshooting manuals by December 2014
DOE has established the one-stop-service facility at its new building.
3c. At least 30 subborrowers benefit from the training on operating new brickfields by December 2014
3d. No FCK owners came forward for establishing energy-efficient brick manufacturing plant. Therefore no livelihood program was prepared.
4a. Government's adoption of perforated or hollow bricks as construction standards by December 2014
4b. At least three alternative construction materials developed by DOE by December 2014
DOE does not have the expertise and mandate to develop such materials and therefore, this indicator is to be revised to "Prepare a knowledge product on alternative construction materials".
Draft knowledge product prepared.
Summary of Environmental and Social Aspects
|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 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.|
|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 ADB Officer||Alam, Nazmul|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Bangladesh Resident Mission|
Ministry of Environment and Forest
Building No. 6(13th floor),Bangladesh
|Concept Clearance||11 Jul 2012|
|Fact Finding||24 Jul 2012 to 26 Jul 2012|
|Approval||22 Oct 2012|
|Last Review Mission||-|
|Last PDS Update||29 Mar 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|22 Oct 2012||31 Mar 2013||31 Mar 2013||31 Dec 2014||31 Dec 2016||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|0.00||750,000.00||0.00||0.00||0.00||0.00||750,000.00||22 Oct 2012||709,582.15|
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