Energy Access Program in Developing Asia and a Proposal for Myanmar Pradeep Tharakan, PhD Energy Specialist (Climate Change) Southeast Asia Energy Division (SEEN), Asian Development Bank, Manila June 2013

OUTLINE ADB’s Energy for All Program Some recent examples of ongoing energy access support programs A proposal for technical assistance to Myanmar

ADB’s Response: Energy for All Program Energy for All program was launched in 2008 to Mainstream energy access for the poor in ADB’s operations Increase ADB investment in energy access projects and enterprises Develop strategic partnerships and alliances with other stakeholders. ADB 2009 Energy Policy “Maximize energy access for all, especially for the rural poor.” ADB Strategy 2020 ADB will support three complementary development agendas: inclusive economic growth, environmentally sustainable growth, and regional integration. 3

ADB’s Response: Energy for All Partnership The Energy for All Partnership was established in 2009 Aim is to provide 100 million people with modern energy access by 2015 ENERGY FOR ALL PARTNERSHIP STEERING COMMITTEE COLLABORATION WITH OTHER PROGRAMS SECRETARIAT LIGHTING COOKING ELECTRICITY FOR ENTERPRISE DEVELOPMENT Source: IEA 2012 4

Energy for All: Donors and Supporters 5

Energy for All: 4 Priorities Continue efforts to increase ADB’s investment in energy access. Facilitate the replication and expansion of energy access enterprises in Asia and the Pacific. Mobilize and channel resources to address financial, technical and regulatory barriers in the energy access sector. Capture and disseminate best practices and sustainable business models in the energy access sector. Powered by

Energy for All Primary actors in the energy access space: Partnership Proponent (energy access enterprises, government, private-public partnerships, etc.) Enabler (incubators, donor programs, brokers, etc.) Investor (equity funds, commercial banks, financial institutions, etc.) Powered by

Energy for All Ongoing Activities KNOWLEDGE MANAGEMENT Energy for All website Knowledge hub of best practices and business models Idea exchange and concept refinement Identifying funding opportunities Identify credible projects (CTI-PFAN, New Ventures) Utilizing in-country teams to identify credible projects, provide relevant capacity building services, and facilitate investment CAPACITY BUILDING Incubation (SELCO India) Incubation models for energy access Marketing & Outreach Powered by

Investment Facilitation Energy for All Ongoing Activities PROJECT DEVELOPMENT Technology Transfer (Inensus, Power Source) Technology transfer of mini-grid management system PROMOTING PARTNERSHIPS Web-based investment facilitation (Impact Investment Exchange) Building an online investment platform for energy access enterprises Partnerships with investors and financial institutions Referral of energy access enterprises in the investment portfolio Project Development Investment Facilitation Powered by

Energy for All in Action – Simpa Networks Assistance to Simpa Networks Simpa Networks developed a secure, prepaid payment platform that makes modern Energy simple, affordable and investible. This platform utilizes a combination of hardware and software technology that is tied together by an SMS and web-based backbone. It enables energy access enterprises to sell clean energy solutions such as solar home systems, solar electric microgrids, UPS systems and more. Assistance to Simpa Networks Energy for All Investor Forum Simpa Networks was one of the finalists selected to present in the Energy for All Investor Forum last June 2012. This opportunity gave Simpa Networks increased visibility within ADB, leading to the Private Sector Operations Department’s (PSOD) interest in investing in the company. Investment Facilitation PSOD is considering to take an equity stake in Simpa Networks worth USD 2 million. This deal is the first of its kind, considering the deal size, the maturity of the company and the industry. Energy for All seeks to work more closely with PSOD and understand how to improve deal facilitation. Due Diligence The Energy for All Team is assisting PSOD to conduct feasibility analysis, valuation and further due diligence for board approval. Business Model Paying the Simpa Way Consumers can purchase SHS by paying10-20% of the unit’s cost up front. The balance will be paid through the purchase of energy credits every month. Powered by

Energy for All Objectives: in Action – Scaling up Energy Access in Sumba Island Objectives: Promotion of small scale renewable energy deployment in Eastern Indonesia using a case study approach in one island. Partnership with MEMR, PLN and governments of NTT, and Sumba. Build on prior and ongoing work (HIVOS, World Bank) Powered by

Scope and Approach Grants funds of $3.0 million to be used for consulting inputs and output based aid programs. 3-yr implementation period Outputs: Detailed energy access plan for Sumba developed. Priority investment projects to be developed by small independent power producers identified and prepared. Implementation of ongoing and planned energy access programs financed by the government strengthened.

Ongoing Activities Off grid micro hydro (Hivos) Solar home systems (>30.000 SEHEN) Increase hydro for the grid (PLN) Wind turbine preparation for the grid (Sewatama) and off grid wind (IBEKA) Solar pumping pilot (YSS) > 100 biogas digestors in 2012 More to come… (biomass GE, solar PV, ..)

ADB’s Response: Investing in Energy Access ADB’s investment in energy access increased to a cumulative total of USD 2.8 billion from 2008 to 2011, which is expected to raise new connections to modern energy to nearly 10 million households. Source: Energy for All, 2012 14

Proposed ADB Technical Assistance for Off-grid Renewable Energy Access in Myanmar

Background The Directorate of Industrial Planning, Ministry of Industry (MOI) presented a project proposal for rural energy development at the Myanmar Development Cooperation Forum (MDCF) held in Nay Pyi Taw (19–20 January 2013) MOI chairs the Rural Energy Development Supporting Committee Ongoing efforts (2011–2013) to provide energy access in 591 remote villages Implementation of micro-hydro, solar, biogas/biomass gasification, small wind power systems in remote, off-grid areas, primarily to provide power to schools and other public facilities in those areas. MOI aims to provide such systems to a further 103 villages and is seeking funding from bilateral or multi-lateral donors to continue with the program during 2014–2018.

Key Considerations Sustainable approaches that allow for adequate O&M, and replacement costs. Business models that combine capital subsidies (viability gap financing) with partial cost recovery. Draw on domestic manufacturing and fabrication expertise – rebuild RE equipment supply chains Electricity is one of two considerations, what about cooking fuels and improved cook stoves ?

Suggested Approach? Support some pilot installations - not to demonstrate technology, but models of public procurement, public-private partnerships, and viability gap financing models Also demonstrate systematic energy access planning approaches – select 1-2 regions Link up with ADB’s $12 million grant for “Enhancing Rural Livelihoods and Incomes Project” – block grants to village tracts to undertake priority small scale rural infrastructure and livelihood subprojects based on village development plans

Suggested Approach? ADB is mobilizing about 1.5-2.0 million USD to carry out this work MOI is convening a workshop in Nay Pyi Taw on June 4 (Tuesday: 8 am – 12 noon) Purpose of the workshop: To develop an appropriate implementation approach and to identify partners

ADB GMS Env Operations Center

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Thank you ptharakan@adb.org