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ASTAE Supported Activities during FY08: Country Reports 

ASTAE Summary Disbursements in FY08

Development and Implementation Support for ASTAE Flagship Activities33,400
ASTAE Outreach and Knowledge Sharing511,651
Develop Sustainable Energy Programs in ASTAE Priority Countries in Asia577,061
Develop Sustainable Energy Projects in Other Countries in Asia and Pacific725,655
Grand Total1,847,757

Activities Supported by ASTAE in FY08 compared to FY07

Total disbursed US$ 



Develop Sustainable Energy Programs in ASTAE Priority Countries in Asia (China, Indonesia, and Vietnam)










Develop Sustainable Energy Projects in other Countries in Asia













Solomon Islands



Pacific Islands









Develop Sustainable Energy Components in Non-Energy Sector Projects in Asia and Develop ASTAE “Flagship” Projects

Combined values FY06 / FY07



Outreach and Knowledge Sharing / Administration





Grand Total



East Asia and Pacific: ASTAE Support to Regional Activities
In FY08 ASTAE continued its support to the East Asia Pacific Energy Flagship Study and to the regional GEF Sustainable Energy Financing for the Pacific Islands. A new ASTAE activity to develop a Wind Resources Map for the Pacific Islands was approved and covers the island countries of PNG, Fiji, and the Solomon Islands. A broadcast ready documentary on Energizing the Pacific Islands was also initiated towards the end of FY08 and delivered early in FY09. The documentary describes renewable energy technology solutions as well as sustainable management systems that represent much needed solutions in the Pacific Islands in a context of raising diesel prices and deteriorating balances of payment in island economies.

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East Asia Pacific Energy Flagship Study 
In FY08 ASTAE continued to support the regional Energy Flagship Study designed to improve the understanding of prospective energy sector challenges in the East Asia Pacific region. The study is intended to assess the long-term economic implications of these challenges, and to propose potential policy and institutional responses to be considered by the governments of the countries of Developing East Asia. The countries included in the Flagship Study are China, Indonesia, Vietnam, Malaysia, Mongolia, Thailand, The Philippines, Cambodia, Myanmar, and Lao PDR.

The study is intended to serve as a basis for furthering the Bank’s policy dialogue with its client countries in the East Asia and Pacific, and study findings and recommendations regarding the potential of regional and country-level actions for improving energy efficiency and expanding renewable energy are likely to lead to future Bank activities in these areas. Follow-up activities will have a very significant impact on ASTAE targets, notably on Energy Efficiency (GWh equivalent avoided) and on GHG Mitigation (tCO2 avoided).

ASTAE support is used in combination with ESMAP, Bank Budget and PPIAF funds to study the feasibility of and potential results from regional cooperation in policies for improving energy efficiency and supporting renewable energy development.

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Wind Resources Map for the Pacific Islands
Following requests from Pacific islands governments for reliable data on wind energy resources ASTAE has approved a project to characterize the exploitable resource in 4 Pacific Islands. The project has introduced the Wind Survey software system to map resources that can deliver initial results without incorporating input generated from surface wind towers. The software can also simulate meteorological data variations not captured in most other modeling systems, including down-slope mountain winds, wind tunnels in mountain passes, lake and sea breezes, low-level jet streams, temperature inversions and surface roughness effects. The software used by the project directly simulates long-term wind conditions, thereby eliminating the need for adjustments using correlations between short- and long-term surface measurements.

The project characterizes wind resources on each island by recreating actual weather and wind conditions for 366 days randomly sampled from a 15-year historical record. The data is compiled and summarized to produce maps of mean wind speed and wind power density as well as data bases containing wind speed and direction distributions. Once the mapping is completed, the Bank will consult with the Government in each country to explore the possibility of a long term wind development program, which might be followed up as part of the Governments request for GEF funding under the new GEF Pacific Fund.

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Pacific Islands Sustainable Energy Financing Project 
The Pacific Islands Sustainable Energy Financing Project (SEFP) is financed by a GEF grant ($9,48m) that aims to increase the adoption of renewable energy technologies in participating Pacific Island states (Fiji, Solomon Islands, Marshall Islands, Papua New Guinea, Vanuatu) by developing a package of incentives to encourage local financial institutions to participate in sustainable energy finance.

The project introduces an original financing mechanism providing risk guarantees and is expected to leverage substantial private sector financing in the magnitude of $18m. The proposed risk sharing instruments will be backed by GEF funds and associated with targeted financial and institutional capacity building benefiting both local financial institutions and dealers of renewable energy technologies. Island renewable energy equipment suppliers will be equipped with the market intelligence and business development skills adequate to participate in the investment opportunity proposed to local financial institutions.

During FY08 the project has received support from ASTAE to set up a pilot fund functioning with the same guarantee mechanisms as the one proposed in the SEFP. Actual loans were extended by a local commercial bank to a sample of borrowers’ representative of potential SEFP clients, with the partial support of a 50% credit guarantee scheme established with ASTAE funds. Support to the SEFP for implementation was extended by ASTAE in FY09.

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ASTAE Documentary on Energizing the Pacific Islands 
ASTAE approved funding towards the end of FY08 for a 30-miuntes documentary illustrating renewable energy technology solutions for the Pacific Islands, and related sustainable energy management solutions. The sharp increase in oil prices in 2008 has demonstrated the economic vulnerability of Pacific Island countries given the dependency they have on fossil fuels. These fuels accounted for more than 30 percent of the import bill in six of the 14 independent Pacific Islands, and all countries of the Pacific with the exception of Papua New Guinea, have experienced severe impacts on their budget.

Lack of regulatory planning and coordination, lack of capacity, and lack of information on small-scale, sustainable renewable energy solutions have hindered the reaction capacity of island states to adverse diesel prices. The pilot projects developed to date have focused too much on the delivery of equipment instead of designing sustainable operation models. The World Bank has developed both technology and management solutions that are sustainable and presented in the ASTAE documentary on Energizing the Pacific Islands. The documentary shot on location in Fiji, the Solomon Islands, Vanuatu, PNG, but also in Cambodia, Sri Lanka, Europe and the USA. Technologies showcased include energy from Biomass, Wind energy, Micro Hydro, and fuel derived from coconut oil.

Energy from Biomass
Technologies using biomass in the form of wood, agriculture residue and animal waste to generate electricity have been tried and tested successfully in different parts of the world. They have proven especially beneficial for the rural poor in remote areas, for whom the use of agricultural waste to generate and have access to electricity has transformed their lives in more ways than one. The documentary showcases how in India use of biomass has brought increased yields through irrigation and organic fertilizer resulting in more stable and sustainable rural economies.

Fiji is the only country in the Pacific that has successfully implemented biomass technology to take care of 5-6% of its electricity demand. This has been possible because of a long-term power purchase agreement between Fiji Electricity Authority (FEA) and Tropik Woods – a saw mill and wood generation company. Tropik Woods in the past utilized wood fuel to generate electricity for its own use. Now the surplus is sold to FEA – 72,351 kWh of electricity, adequate for supplying almost 15,000 homes.

Wind Energy in Fiji
As part of their new Energy blueprint, the Government of Fiji decided that by 2012 all their energy supply should come from renewable resources. Butoni Wind Farm in Sigatoka was set up in 2007 as part of their renewable energy strategy.

A chain of 37 wind turbines produce 10MW of power that feeds into the Sigatoka grid. It’s the first grid connected wind installation in Fiji. Sigatoka town has a population of about 10,000 people and is the commercial hub of farmers in the valley. Butoni Wind Farm generates 12 million KWh of electricity in a year and has already saved over US$3 million in diesel costs.

Micro Hydro Energy
For renewable energy projects to be successful it is essential to have the entire chain – from finance of the project, installation and maintenance of equipment to community management – strongly linked. Since most micro hydro projects are in remote areas and involve channeling river streams and machine installations, they require detailed planning, technical backup and community participation.

The documentary shows how a small hamlet in Kivula in the south eastern part of Sri Lanka is one of over 300 such installations that provide an insight into such an effort. A micro hydro unit of 27 kW energizes the entire village of 125 households. Each household gets 250 watts of electricity. The villagers collectively take all decisions about the project, including what equipment to buy, how many lines to set-up, and how to function during peak hours. It is this ownership model that has brought about the success of the project.

Coconut Oil as Fuel
Coconut is grown in abundance in the Pacific Islands. In Port Olry in Vanuatu, coconut farming and fishing are the mainstay of the economy. The village cooperative sourced a generator that runs on coconut oil and produces cheaper electricity than power produced from diesel generation. The village cooperative has adopted a system of distribution of electricity using the smart card technology. Electricity has changed the way people live in Port Orly. Fisherfolk make ice and store their catch in freezers for transportation; restaurants remain open till late offering fresh fish, meat and music!

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ASTAE support to Renewable Energy and Energy Efficiency in China

Knowledge Building on Heat Metering in Tianjin
ASTAE is providing support to share knowledge and international experience with transitioning to meter based heating supply systems through reviews and analysis of the activities performed by the city of Tianjin in China. The ASTAE activity is designed to provide just in time advisory support to the Tianjin Municipal Government and through this to the Chinese Ministry of Construction. The ASTAE support will lead to improved solutions to address problems encountered in heat metering programs, and, should Tianjin successfully demonstrate these solutions, the demonstrations will have scale up potential in other cities in north China.

Buildings in China consume twice as much energy as buildings in comparable European cities, however China lacks price incentives to stimulate sustainable energy efficiency in heating because heating is priced using an area-based tariff. Since 2003 the Chinese Government has initiated city-wide pilots to develop consumption based billing systems and strengthen building energy efficiency standards. A Bank-led international assistance program has supported the central government in a step-wise manner. A centerpiece of the program is an $18 million GEF Heat Reform and Building Energy Efficiency Project.

Among pilot cities, Tianjin Municipal Government has taken the lead in nation-wide heat reform transferring responsibility for heat bill payment to consumers and implementing 2 million m2 consumption based billing demonstration project and an additional 1 million m2 metering demonstration project. The users covered under the consumption based billing pilot will be charged in line with a two part heat tariff rather than the traditional area based tariff (set by floor area).

ASTAE Support to Fiscal Policy and Sector Regulations to address Barriers associated with Phasing Out Small Coal-Fired Power Plants in China
ASTAE has supported a workshop on a China Thermal Energy Efficiency Project held in Beijing in January 2008. The workshop discussed fiscal policy and sector regulation measures to address barriers associated with phasing out small coal-fired power plants. During the workshop, the findings of recent surveys and recommendations of studies on the subject were be presented by the consultants with special attention brought to the social and fiscal consequences associated with various options, including loss of income and fiscal revenue by the government, for which possible remedies and incentive systems were discussed.

The workshop brought together about 50 participants from NDRC, MOF, the State Electricity Regulatory Commission (SERC), provincial governments, power plant owners, government energy institutes and design institutes.

Small CHP units (below 100 MW), however, usually operate at very low efficiency when for power generation only. Dispatch of these CHP units only for power generation should be minimized. Small-sized CHP units not meeting minimum heat power ratio requirement should also be gradually phased out. China has more than 100 medium-sized CHP units ranging between 200 and 300 MW that were built in the 1990s. There is great potential to improve their efficiency and reduce the GHG and other pollutant emissions through rehabilitation of these medium-sized CHP units to substitute for small-sized CHP units or decentralized boilers.

Continued ASTAE support to the China Renewable Energy Scale-Up Program (CRESP)
The CRESP program has been developed by the Government of China in cooperation with the World Bank and the Global Environment Facility to provide assistance with the implementation of an ambitious renewable energy policy development and investment program. CRESP is a ten to twelve years program implemented in three phases of which Phase 1 has two components: an investment component (US$87 million IBRD loan) and an Institutional Development and Capacity Building Component (IDCB) (US$ 40,2 million grant).

ASTAE has provided important support to the CRESP program from pre-concept stage to early preparation and implementation. ASTAE support in particular helped procure expertise to develop the policy and regulatory concepts underpinning the Renewable Energy Law (REL) promulgated by the Government of China in January 2006.

In FY07 and FY08 ASTAE resources were focused on supporting the institutional development (IDCB) component by assisting the World Bank in ensuring the quality of the deliverables produced as part of the sub-components of the IDCB. Key activities supported helped develop institutional and human capacity to implement the renewable energy law and its related regulations, define an enabling framework for future renewable energy investments and prepare specific provincial investment projects. ASTAE support to this key program for China renewable energy development was reconducted in FY09.

ASTAE support to financing Energy Efficiency gains in Chinese medium and large sized industrial enterprises
ASTAE has supported the preparation of a US$ 200 million China Energy Efficiency Financing Project (Board approved in FY08) by procuring services to draft an on-lending operation manual that will provide a framework for on-lending to Chinese commercial banks from the IBRD loan. This operation manual describes in particular the eligibility of subprojects for Bank financing, subproject preparation procedures, methodologies for subproject appraisal, and implementation arrangements.

ASTAE is also supporting the development of a draft implementation plan for the proposed GEF technical assistance, which will propose comprehensive eligibility criteria and conditions for the selection of domestic banks for GEF support in addition to a detailed implementation plan for GEF capacity building activities.

ASTAE continued support to the implementation of the Renewable Energy Development Program (REDP)
The REDP since it started implementation in 2001 has provided financing for 20MW of wind energy in Shanghai province, and for about10 MWp of Photovoltaic (PV) solar home systems (representing about 350,000 systems) in the three Northwestern provinces of China. To support the development of the PV industry the REDP has provided grants for technology improvement, for capacity building, and for management. Small grants were extended to accredited PV companies to encourage them to sell their systems on a commercial basis to rural customers.

During FY08 ASTAE maintained its support to the implementation of the REDP by procuring expertise for the development of product standards supporting a more competitive market for the photovoltaic industry in China. ASTAE helped build capacity within the project management office by providing general project management support and providing expertise for the review terms of reference. The project was closed in FY08 and attracted international attention by winning a prestigious Ashden Award for Sustainable Energy (See box below).

Renewable Energy Development Project in China Wins Prestigious Ashden Award for Sustainable Energy Story | Ashden Awards
The China Renewable Energy Development Project (REDP) was established in 2001 by the National Development and Reform Commission (NDRC), the World Bank, and the Global Environment Facility (GEF). This Project, which closed in June 2008, had the goal of promoting the installation of photovoltaic (PV) solar-home-systems (SHS) in remote off-grid homes. The result of this program was the commercial distribution of stand-alone, portable energy generation units that utilize PV cells to provide electrical power. The typical SHS can power two lights, while a larger system may power radio cassettes, TVs, and charge mobile phones.

In addition to installing SHS in off-grid homes, the REDP had the following objectives:

  1. Improve the quality of PV module production and other system components in China;
  2. Disseminate information about PV operation and maintenance; and
  3. Facilitate cooperation between the PV sector in China and the rest of the world.

The REDP has helped those in remote areas who need it most. For users, the main benefit of the REDP program is brighter, cleaner lighting for study, work and recreation. Use of radio-cassettes, television, and mobile telephones provided contact with the outside world, and a form of entertainment for those located in remote areas. Better communication systems were also seen as valuable for maintaining contact and accessing help in emergencies.

The PV systems introduced to these communities have benefitted both the individual and the village through providing electricity to public facilities such as schools, health centers, and Buddhist temples. With the increased capacity, villagers can continue to function in the night time hours in their communities as well as in their homes.

REDP Figures: 

  • 402,000 solar-home-systems were installed through the REDP-subsidized program between 2003 and 2008, with a total capacity of 11.1 MWp
  • Each SHS benefits an estimated four people per household, or a total of 1.61 million people for the program as a whole
  • The average sale price was Yuan 1,221 (US$178), similar to the price of a yak.

The success of the REDP was driven by development of the market for PV systems, which had the effect of improving quality while reducing costs. This was achieved through competition between distributors, regulation of system quality, and provision of distributor subsidies. The resulting high quality and high value systems are expected to continue their operations over the long term, sustaining the industry with the help of China's trade associations. Now that the reliability and value of PV systems are widely known, companies can sustain sales even without subsidies. Further, it is envisioned that as systems become cheaper and technology matures, there will be additional opportunities for expanding the use of SHS throughout China.

In recognition of the many benefits and people positively affected by this program, the REDP received the Ashden Award for Sustainable Energy this year. This competition, which examines sustainable energy projects from around the world, seeks work that “makes a genuine difference to local peoples’ lives, both socially and economically.” This prestigious award commemorates the successful distribution of quality PV module components throughout nine remote provinces in northwestern China, including the sale of over 402,000 SHS since 2001 which improve quality of life through better light, communications and entertainment. The impacts of this project mirror the goals of the Ashden Awards themselves – improving communities while improving the world. The REDP model of using a market-driven approach to reduce costs, and improve system quality has greatly expanded the market for solar-home-systems while also supporting the growth for this industry, building a network of wholesale suppliers and retailers. This model for providing market-driven incentives is now being followed by World Bank projects in other developing countries. It is expected that the successful outcomes of the REDP will continue to encourage renewable energy development, support rural electrification programs, and sustain the provision of energy resources for residents of remote, off-grid communities for years to come.

(More on China) 

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ASTAE Support to Renewable Energy, Rural Energy and Energy Efficiency Gains in Vietnam 

Production of a Television Documentary on Rural Electrification in Vietnam 
ASTAE produced a television broadcast quality documentary with accompanying report and conference publications, documenting the achievements, lessons learnt and impacts of the Vietnamese rural electrification program from the 1990s to present. The documentary was released in April 2007 and presented to Bank Senior management. It is currently being marketed to television networks around the world, including Vietnam, Europe, Africa, and other Bank client countries in Asia. The documentary will be shown in June 2009 at a major regional electrification workshop organized by the World Bank in Maputo, Mozambique.

The documentary illustrates how over the past decade access to electricity in rural areas in Vietnam has increased dramatically, characterizing one of the most successful rural electrification programs in the world. The number of rural households with access to electricity has increased from 50% in 1996 to over 93% today.

The World Bank Group's International Development Association has been a strong partner for Vietnam in this process. The World Bank supports the Government of Vietnam through a long term result-oriented program comprising four consecutive rural electrification projects. One of the projects is now completed, two are being executed, and the fourth is being prepared. The four projects aim to electrify 99,9% of all Vietnamese households.

ASTAE has supported this rural electrification agenda by providing implementation support to the first and second World Bank projects on Rural Electrification, and by supporting Rural Electrification Impact Studies to assess the social and economic benefits of electrification for end-users. The first rural electrification project provided access to over 500,000 households; the second project will electrify two million households.

The video and print material describe the commitment of the Government of Vietnam in its systematic implementation of a national electrification plan, with public investment support matching local community funds. The program has had very significant social impacts contributing to poverty alleviation and improved quality of life, including improved income, education, and time use.

ASTAE Support to the Rural Electrification Program in Vietnam
In FY08 ASTAE continued to provide support to analyze field surveys on Welfare Impact Assessments of Rural Electrification in Vietnam. Training was provided to the Vietnam Institute of Sociology (IoS) to conduct and evaluate the third survey in March 2008. The IoS will then synthesize the findings of all three surveys in an effort to develop suitable policies for rural electrification in the future. These policies will cover not only access to electricity for the remaining un-electrified 5-10 percent, but also ensure that electricity services for those who already have access are sustainable. This will provide a comprehensive, in-depth and outcome oriented assessment of the impacts of rural electrification in Vietnam.

ASTAE Support to Renewable Energy Development in Vietnam
In FY08 ASTAE provided support to the preparation of the Renewable Energy Development Project (REDP) in Vietnam. This project is proposed as a financial intermediation operation with an IDA credit of US$150 million available for on-lending through Vietnamese banks to renewable energy sub-projects as sub-loans ranging from US$5 to 10 million. The sub-projects are expected to be mainly small hydropower not larger than 30MW; they may also include biomass cogeneration including bagasse and rice husks. The financial intermediation enables wholesale finance to be made available to leverage local capacity to sponsor, appraise, finance, procure and construct individual sub-projects. This allows more rapid implementation of individual projects while creating the basis for a sustainable, private, renewable energy supply industry.

ASTAE support is essential to build capacity among banks and projects sponsors in order to identify and build a pipeline of potential sub-projects. Vietnamese banks have limited experience with renewable energy projects and with commercially-oriented appraisal of projects – ASTAE works with financial intermediaries, project sponsors and agencies from the Ministry of Infrastructure and Trade to establish a framework for the financial intermediation.

ASTAE support to the GEF Financed DSM & Energy Efficiency Program
In FY08 ASTAE continued to support the implementation of the GEF-financed Demand Side Management (DSM) and Energy Efficiency Project. ASTAE provided advisory assistance and capacity building to the Ministry of Industry and Trade (MoIT) to successfully implement these two pilot programs. ASTAE support is used to conduct business development studies for the expansion of commercial energy efficiency services in Vietnam. Enhanced capacity of local ESCOs is expected to lead to accelerated energy efficiency retrofit investments under the CEEP component implemented by MoIT.

The overall objectives of the GEF project are to develop and expand DSM business programs and test market transformation efforts with the national electric utility (EVN) and to develop sustainable business models and mechanisms to support energy efficiency retrofit investments in commercial and industrial facilities. The project comprises two components, the DSM Phase 2 Program implemented by EVN and the Commercial Energy Efficiency Program (CEEP) implemented by the Ministry of Industry and Trade (MoIT). Total financing for the project is US$ 18.6 million.

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ASTAE Support to Geothermal Energy Development in Indonesia 

Indonesia has over 40% of the world’s geothermal power potential. With estimated generation approximating 27,000 MW, geothermal power provides one of the best renewable options to enhance Indonesia’s energy mix, providing a balanced expansion of resource utilization that takes into account environmental considerations. Despite its potential, the level of geothermal development in Indonesia has been limited, and the Government of Indonesia (GoI) has asked the World Bank for assistance to help address barriers and scale-up development in the sector by mobilizing investments.

The World Bank has responded with an integrated assistance program that is aimed to catalyze investment in geothermal power immediately while also improving the investment climate for longer term sustainable development in the sector. In FY08 and FY09, ASTAE will provide pre-investment analysis that will serve as a basis for implementing the Government’s geothermal reform program which will lead to a scaling up of geothermal power generation in Indonesia.

It is estimated that business-as-usual will likely lead from about 1,000 MW today to only 3,200 MW being developed by 2020, whereas, with the proposed Government intervention, Indonesia could reach the full 6,000 MW of planned geothermal power generation. There will also be a significant climate change impact as a result due to the reduction in greenhouse gas emissions (GHG). During its life-cycle, the incremental geothermal capacity due to the proposed reforms is expected to reduce CO2 emissions by about 500 million tons.

GoI has developed a blueprint for geothermal development, which calls for the development of 6,000 MW by 2020, and geothermal remains the only renewable energy in Indonesia with its own law to govern and guide sector development. The GoI is now undertaking a major reform program to tackle the key barriers that have stymied development of geothermal and hope to get the blueprint back on track. Indonesia is also fast growing in terms of their carbon footprint, and geothermal is consistent with the GoI’s plan to achieve a low-carbon growth strategy. The recently approved Energy Law emphasizes both geothermal development and reduction of greenhouse gas emissions. Therefore, the proposed activities are fully consistent with Indonesia’s national development priorities.

The activities that are proposed for ASTAE support all have a strong commitment towards their follow-up in order to achieve the intended outcomes. The implementation support is intended to assist with the GoI policy reforms which will be funded by a GEF grant. The concept for a CDM Framework developed through ASTAE support will lead to the preparation and subsequent implementation of this program by the World Bank’s Carbon Business. The investment project, which ASTAE funds will help prepare, will be realized through a World Bank loan to finance its implementation.

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ASTAE Supported Activities in Mongolia

Energy Efficient and Cleaner Heating in Peri Urban Areas of Ulaanbaatar 
During FY08, ASTAE produced a comprehensive report on Energy Efficient and Cleaner Heating in Peri Urban Areas of Ulaanbaatar as a part of a World Bank response to the Government of Mongolia’s request to mobilize a wide range of resources to develop and support abatement measures for air pollution in Ulaanbaatar. Air quality in Ulaanbaatar is deteriorating very rapidly. During the past few years complaints about air pollution in the city have increased exponentially, especially during the winter months. Several causes of air pollution problems in the city have been identified. Consensus points to the use of raw coal for heating by ger districts residents as one of the main culprits. It has also been recognized that exposure to airborne pollutants, primarily fine particulates such as PM2.5 and PM10 is a health hazard for all city residents that has a serious negative impact on the economy. Coal is not only burned in the power plants but also in the ger districts, where households have to rely on small stoves to keep warm during the winter months.

The findings of the ASTAE report lead to the conclusion that it is possible to develop a program aiming to provide clean, affordable heating to ger areas in Ulaanbaatar, but that there remain significant technical and financial barriers to a successful roll-out. There has been much debate on where to place emphasis – on more efficient stoves or cleaner fuels. Several pilots and small commercial ventures in both have taken place in the past with limited success. Currently, the focus is on development of cleaner fuels. The findings of the ASTAE activities conclude that both are equally important: it is the combination of the stove and the fuel that will determine the impact of such program. Essentially, before recommendations about endorsing or supporting new fuels or particular stoves can be made, better testing is needed to identify combinations with good potential to reduce emissions.

The ASTAE report outlines a program to replace stoves and introduce new fuels. Setting of technical standards and testing compliance of emissions will be an important part of this program. Providing assistance to Mongolian stove producers and linking them up to international counterparts should be part of the action. Finally, convincing households to switch to better fuel-stove combinations – once these have been identified – will be the ultimate goal, and aside from organizing a large-scale publicity and awareness campaign, a support mechanism should be put in place to assist poor households in quickly adopting the measures to clean up the air they breathe. This report suggests using a subsidy voucher system based on the Output-Based Aid approach that earlier showed promising results in Ulaanbaatar under a previous demonstration project.

ASTAE support to Energy Access in Peri-urban Areas and to Developing Social Pricing Policies
ASTAE carried over into FY08 its support to a World Bank non-lending Analytical and Advisory Activity on Mongolia Heat Pricing and Regulation by procuring expertise to assess different financial, technical and institutional mechanisms to facilitate electricity access to peri-urban consumers. In addition, ASTAE is providing support to bring together national and regional urban stakeholders including policy makers, utilities, local consulting companies and local Governments, to develop consensus for policy improvements and best practices models. ASTAE support is also being used to propose alternative technology options to increase electricity access in peri-urban areas.

The Renewable Energy and Rural Electricity Access Project
In FY08 ASTAE also continued providing assistance to the Renewable Energy and Rural Electricity Project, that will support rural electrification by assisting in the development of institutions and delivery mechanisms based on public-private partnerships and community participation, it will facilitate herders’ investments in solar home systems (SHS) and small wind turbine systems (WTS), and it will rehabilitate mini-grids in selected soum centers by improving their operation and management practices. The project also aims to strengthen the institutional and regulatory capacity at the national level to develop grid-connected and off-grid renewable energy generation.

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Thailand: support to energy efficiency and renewable energy development 

Thailand has relatively high energy intensities across sectors, high Energy-GDP elasticity, low share of renewable energy sources in its energy mix, and very high dependence on oil. While several initiatives and policies, especially in the area of promoting demand side energy efficiency measures (e.g., refrigerator labeling program, Energy Efficiency Revolving Fund, Thai DSM Program, etc.) and Renewable Portfolio Standards are innovative, their actual success in terms of catalyzing overall improvements in the share of renewable energy and energy efficiency or in transforming these markets in a sustainable manner has been quite limited. Commercially financed investments in the sustainable energy sector remain low as institutional, regulatory, financial barriers and lack of capacity, particularly in the financial sector, continue to prevail.

The targets set up by the Government of Thailand under its National Energy Policy are ambitious: reduce total energy consumption by 20% by 2009; increase share of renewable energy to 8% of total energy consumption; reduce energy-GDP elasticity from 1.4 to 1.0 by 2011; reduce oil use in transportation by 25% by 2009; reduce oil consumption in industrial sector by 25% by 2008; reduce energy consumption in household sector by 10%, starting June 2005; and reduce energy consumption in public offices and buildings by 10-15% immediately.

It is unclear as to how these targets will be achieved, and there is a need to develop a mechanism for systematic collection, analysis, and dissemination of information to support the decision makers in preparation, review, and implementation of energy efficiency strategies to ensure their effectiveness.

ASTAE is supporting the development of Sustainable Energy Indicators covering both renewable energy and energy efficiency. For the energy efficiency indicators, the suggested framework will cover different supply (energy/fuel) sources, consumption sectors and end-use levels. They will move beyond macro-level analyses to the end-use level - such as buildings, industry, and transport sectors.

The World Bank through its dialog with the Thai Government under the Country Development Partnership on Infrastructure, has been working very closely already on these issues with the National Economic and Social Development Board (NESDB). Two workshops supported by ASTAE were held at the end of August 2006 and end of March 2007. The workshop output provided clear guidance to the government and the Bank as to the measures needed to promote further investment in this sector.

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ASTAE Activities in Cambodia 

Support to a National Bio-digester Private Sector Development Project 
An ASTAE activity approved in FY08 is providing support to develop an effective Cambodian private sector that supports the National Bio-digester Program with the objective of providing maximum value to rural households that install bio-digesters. The Cambodia National Biodigester Program built the first biodigesters in March 2006 and now the Program has installed 750 digesters in five provinces of Cambodia: Kampong Cham, Kandal, Kampong Speu, Takeo and Svay Rieng. The target number of bio-digesters to be installed in these five provinces is 17,500 by 2009.

The Program financed an independent private sector study that found that although the plants were built of good quality, the implementation strategy would need adjustment in order to achieve the target number by 2009. The study recommends that private construction companies would need to be established and be responsible for direct marketing and construction of the bio-digesters. A business structure to achieve the greatest value to the customer will need to be developed. Training will also be necessary of all parties in this value chain on business and finance together with control of product quality. The present subsidy structure of the different parties in the value chain would also be examined to maximize the support to the business value chain. All these aspects are being tackled by the ongoing ASTAE analysis that was initiated towards the end of FY08.

ASTAE Support to and Improved Cook Stoves Project
In FY 08 ASTAE has supported efforts to scale-up the development of a commercial, market oriented, improved cook-stove sector in selected provinces of Cambodia. Activities are implemented in partnership with the Ministry of Industry, Mines, and Energy (MIME) and the Groupe Energies Renouvelables et Environnement (GERES) and aim to increase the percentage of households using improved cook stoves, strengthen the institutional development of the sector, and develop technical and market capacity to further deploy this technology in Cambodia.

The ASTAE supported project was managed at national level by the Ministry of Industry, Mining and Energy, with the advisory support of GERES, an organization specialized in improved cook stove dissemination. A national awareness campaign was undertaken to organize media programs on local radio, village information workshops, and technical training programs. Provincial departments of the MIME helped coordinate the program in the different regions of Cambodia, involving NGOs, stove producers and retailers, households and financial intermediaries.

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Solomon Islands: ASTAE Support to a Pilot Sustainable Energy Financing Project 

Under the same regional Pacific Islands Sustainable Energy Financing Project (SEFP) described above, ASTAE is supporting the development of another pilot in the Solomon Islands. As in Fiji, the ANZ Bank will extend loans with the partial support of a guarantee fund established with ASTAE support, on similar terms to the ones proposed under the SEFP guarantee. ASTAE support will help set up a 50% guarantee scheme for commercial bank financing to be provided for a) a retailer of solar PV equipment to purchase fixed assets, b) a new coconut growing cooperative to purchase coconut drying equipment, a converted diesel generator to run on coconut oil and a village lighting system.

This project will lay the foundation for increasing access to modern energy services for the approximately 70,000 households who don’t have access today; and it will assist in the development of renewable energy generation capacity to replace the existing diesel powered generation and by doing so reduced the very high current tariff of US$0.35/kWh. The proposed project will develop a long-term strategy for electrifying (and expanding existing networks) of all communities and economic centers on each of the six main islands that make up Solomon Islands.

Estimates of the extent of access to electricity in Solomon Islands suggest that approximately 18,000 households have access to electricity, implying an electrification ratio of 20 percent. Roughly 60% of the electrified households are located in Honiara and the immediate surrounding area. Recent impact studies in Timor Leste estimate that providing electricity to most of the households in the country would reduce the incidence of poverty by 26% and increase consumption among the affected households by more than 20%. The overall project objective of this activity is to increase access to electricity in rural areas through, as appropriate, development of renewable energy to help alleviate rural poverty in the overall context of power sector development in the country.

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Strategic Master Plan for Biomass and Bio-fuel Development in Fiji 

Fiji’s renewable energy generation portfolio includes hydro, wind, biomass, waste, geothermal and other sources such as solar and gasification, it is currently overly reliant on small hydro power representing 43% of installed capacity. The remaining 57% of installed capacity come from diesel fuel, and the Fiji Energy Authority (FEA) has made a commitment to reduce the share of diesel to less than 10% of total energy by 2011. In order to reach this target and to diversify the country’s renewable energy generation portfolio the FEA was prompted to conduct an in-depth review of biomass opportunities for power generation in Fiji and to carry out tests to determine bio-fuel suitability for its existing diesel generators.

Preliminary resource assessments suggested that biomass resources are predominantly exploitable from crushed sugar cane and forestry waste, while bio-fuels suited for the transport industry are ethanol blends for petrol engines and coconut methyl ester for diesel engines. In order to optimize the development of these important resources, the FEA has elected to produce a national Strategic Master Plan for Biomass and Bio-fuel development.

With the support of ASTAE, a team of international consultants/experts on woody biomass, sugar/bagasse, and bio-fuel worked closely with the FEA to cover resource assessment, biomass technical and financial analysis, bio-fuel evaluation, and policy aspects of this study.

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ASTAE Supported Projects approved by the World Bank Board of Executive Directors in FY07

In FY07 the World Bank Board of Executive Directors has approved several projects that have received ASTAE support. These projects illustrate ASTAE’s work in renewable energy development, rural electrification and innovative financing for alternative energy development.

In Mongolia, the Renewable Energy and Rural Electricity Project focuses on increasing access to electricity and improving reliability of service among the herder population and in off-grid soum centers across the country. The project is financed by a Technical Assistance Grant provided under IDA 14 (US$3.5m), a GEF grant contribution (US$3.5m), grant support of the Government of The Netherlands (US$6m), and budgetary in-kind support of the Government of Mongolia (US$10m).

In Timor Leste, the Gas Seep Harvesting Project is assessing the technical and economic viability of harvesting gas seeps to produce efficient, reliable and affordable power for isolated rural communities. The project will be financed by a grant from the Trust Fund for East Timor (TFET) administered by IDA (0.85m), and co-financed by a proposed Medium Sized Project (MSP) GEF grant (0.6m).

In Timor Leste also an Energy Services Delivery Project was approved by the Board in FY07, the project aims: to improve the performance and financial viability of the national electricity utility, and to restore sustainable electricity supply in selected rural communities. The project is financed by IDA (US$4.5m) with GEF (US$2m) and GoTL’s Consolidated Trust Fund for East Timor (CFET) (US$2m) co-financing.

In the Pacific Islands, a Sustainable Energy Financing Project financed by a GEF grant (US$9.48m) aims to increase the adoption of renewable energy technologies in participating Pacific Island states (Fiji, Marshall Islands, Papua New Guinea, Solomon Islands and Vanuatu). Using a market-driven approach, the project is developing a package of incentives to encourage local financial institutions to make credit available on longer terms to facilitate participation by a large group of consumers.

An Emissions Reduction Purchase Agreement (ERPA) was signed by the World Bank in FY07 for a Carbon Finance project associated with the CRESP lending operation in China, for a 100 MW Wind Farm Development at Huitengxile, Inner Mongolia Autonomous Region.

Projects Added to the Pipeline in FY06
Six projects were added to the pipeline in FY06, bringing the total to ten projects:

  1. The Regional Sustainable Energy Finance Pacific Project
    Project Documents :P098423
  2. Financing of Two Biomass Projects in Inner Mongoliaas part of the CRESPproject;
    Project Documents :P067625
  3. Fiji Electricity Authority (FEA) Renewable Energy Power Project
    Project Documents :P099308
  4. Indonesia Energy Efficiency Finance Project
    Project Documents :P095746
  5. Mongolia Renewable Energy and Rural Electricity Access Project
    Project Documents :P099321/P084766
  6. China Energy Efficiency Financing Project
    Project Documents :P084874

Selected Ongoing Non-lending and Knowledge Management Activities
In addition to the support to project and program identification, development, and implementation, ASTAE provides support to non-lending and knowledge management activities that it believes to be beneficial to meeting its objectives. Click the links below for a description of the most notable activities that took place this year.

  1. China, Jade Electricity: Developing a Green Electricity Scheme for Shanghai
    (Click here for further information)
  2. Philippines, Wind Power Training Program
  3. China, Shanghai Energy Resource Center
  4. China, Wind Resource Assessment Handbook
  5. China, Building a Resource Efficient Society Conference
  6. Outreach and Promotion: ASTAE and REDP Exhibitions at Energy Week 2006


Selected Ongoing Non-lending and Knowledge Management Activities:

China, Jade Electricity: Developing a Green Electricity Scheme for Shanghai
The Green Electricity Scheme for Shanghai was started during FY04 as an ASTAE flagship project and was declared “best practice.” Its report describing the project became available in2006. Green electricity is a product that consumers pay on a voluntary basis, usually at a premium, if part or all of the electricity is produced from renewable resources, such as wind and solar. The program will initially support wind and photovoltaic electricity only. Green electricity will be available to households, industries, and commercial customers, although initially the focus will be on large non-household consumers. The approach adopted by Shanghai was to start small and to let the scheme develop and grow with increasing demand and increasing availability of renewable electricity. This means that the scheme will remain small for some time to come, but that it can become very substantial over time.

To qualify as a green electricity user, consumers must buy yearly blocks of green electricity delivery. The size and number of blocks is set depending on each customer’s total electricity consumption. For example, households must buy blocks of 12kWh per year with a minimum of 10 blocks, and larger customers must buy blocks of 6 MWh with a number of blocks depending on their relative sizes. The incremental cost of green electricity has initially been set at Y >0.53/kWh (about6.5 U.S. cents/kWh in 2005). Shanghai’s annual electricity consumption will soon surpass 100 TWh per year, which can be compared with the current green electricity consumption of6.54 GWh per year (less than 0.01 percent). This nonetheless covers the entire electricity generated by the existing 3.4 MW Feng Xian wind farm and its 10 kWp grid-connected photovoltaic system which, until 2005, were the only renewable electricity resources available to the Shanghai municipality.

ASTAE took the lead to provide World Bank support, together with the Energy Sector Management Assistance Programme (ESMAP) and later joined by the World Wildlife Fund and the Energy Foundation. Resources were used to provide access to international expertise and experience. International experts reports on specific issues. A policy study tour to Finland, Germany, and Sweden for senior Shanghai officials provided information on issues and options for designing and introducing a green electricity scheme, and helped them make an informed decision on whether to adopt this approach in Shanghai. Implementation Training in Canada, Finland, and the Netherlands helped with the actual design of the scheme. ASTAE resources were also used to organize the marketing campaign, prepare promotion materials, and establish and operate the Shanghai Green Electricity website. In addition, ASTAE provided overall support through the ASTAE program-based consultant and a national renewable energy policy expert.(More on China)

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Philippines, Wind Power Training Program
This program provided local technical, financial, and economic analysis training for stakeholders in the field of wind power development in the Philippines. The principal recipient was the Philippine National Oil Company — Energy Development Corporation (PNOC-EDC) which has applied for carbon financing from the World Bank for a 40 MW wind farm planned to be established in Burgos, Ilocos Norte, a project that also receives separate support from ASTAE.

A group of 15 pa Table 1: Changes in FY06 and Status at the End of FY06 other organizations followed a training program designed and delivered by international consultant specialists in the field. The first part of the training of the program provided the fundamental tools and information for stakeholders who lack basic knowledge in wind power development related to wind turbine techniques, environment assessments, financial analysis, procurement and construction issues, and contracting and operation basics. The second part of the training focused on a smaller group of eight players, already involved in wind projects in the Philippines, to improve their capabilities through advanced training modules on technical and financial analysis.(More on Philippines)

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China, Shanghai Energy Resource Center
The Shanghai Energy Conservation Supervision Center, which also participated in the design of the green electricity scheme described above, will renovate three floors in their building to create a living exhibition on energy improvements that local citizens can make in their houses and offices. ASTAE supported the design and plans for the renovation, including an evaluation of the actual energy savings the proposed modifications will generate. In order to make these energy improvements attractive to the general public, the Shanghai EnergyConservation Supervision Center was advised on both energy efficiency measures and on the most efficient communication methods. The center was opened in June 2006 and is attracting a large number of visitors everyday.(More on China)

China, Wind Resource Assessment Handbook
At the International Conference for Renewable Energy in Bonn, the Chinese government announced a target of 20 GW of wind installed capacity by 2020, and its plan to conduct 30 wind concessions (each of 100 MW), in addition to the two pilot wind concessions that have been done. Wind resource measurement and assessment are important steps for wind concession schemes and for scaling up wind power. Existing Chinese practices for wind measurement and assessment are not yet up to international standards. This ASTAE project provided a translation of the Wind Resource Assessment Handbook written by the U.S. National Renewable Energy Laboratory into Chinese to provide guidelines for international standards on wind resource measurement and assessment in China. Three cases studies were also developed as an illustration using the handbook. This package is now an important sourcebook used by local developers of wind farms in China.(More on China)

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China, Building a Resource Efficient Society Conference
If the current modes of production and trends in consumption continue, China will face a severe shortage of natural resources, making sustainable development of the economy and society an impossible mission. The government has realized this and is determined to transfer the current modality of economic growth and build a resource-efficient society. To achieve this goal, the government has shown strong interest in learning from the successful experiences of both developed and developing countries, and working with international organizations and multinational companies to create the right institutional, regulatory, and policy environment for building a resource-efficient society.

The objective of the ASTAE activity was to conduct a high-level international conference to facilitate in-depth discussion of the international experiences and practices, and to discuss the policy recommendations for China and the action plans the Chinese government needs to take in order to move toward a resource-efficient society. The main output was the delivery of the conference, with the following outcomes: (a) increased awareness of the Chinese decision makers and general public about the importance and urgency of resource conservation; (b) broadened knowledge on the part of the Chinese decision makers of successful international experiences and practices; (c) a roadmap consisting of principles; (d) the policies and modalities to be applied to build a resource-efficient society in China; and (e) follow-up actions by the government, international organizations, and business community. Presentations were posted on websites and are available in Chinese language.
(More on China)

Outreach and Promotion: ASTAE and REDP Exhibitions at Energy Week 2006
ASTAE and the Renewable Energy Development Project (REDP) had exhibitions at the 2006 edition of Energy Week. The exhibit stands were seen by numerous visitors, including the World Bank President, Paul Wolfowitz, and the Dutch Minister of Development Cooperation, Agnes van Aardenne. The ASTAE stand was organized on the theme of the ASTAE atlas, Sustainable Energy: Less Poverty, More Profits, and offered copies of the atlas, its accompanying video, and a series of ASTAE funded reports and publications printed for the occasion. The ASTAE stand remains available for future exhibitions.
(More onEnergy Week 2006)

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Projects FY06 : 

Regional, Sustainable Energy Finance Pacific Project (P098423)
In the Pacific Islands, particularly in rural areas, renewable energy (and energy efficiency interventions) offers cheaper options and increased access to modern energy services for households and micro and small enterprises. For households and small and micro enterprises to switch from traditional fuel options (kerosene and dry cell batteries) to renewable energy options (solar PV, pico-hydro, and coconut oil), three important barriers exist. The relatively high initial investment is a big obstacle. Second, financial institutions in the region have mixed experiences lending to this target group, and they have no experience lending for energy services. Third, the relatively simple technical knowledge required to operate and maintain renewable energy solutions is not readily available. The proposed regional project will remove the above-mentioned three barriers by creating a Trust Fund that would provide for a menu of sustainable financial intermediation solutions, tailor-made for target groups in each of the Pacific countries in which the project will operate. The project will also provide technical assistance and training for financial institutions participating in the project. The renewable energy options to be supported under this project are solar PV, pico-hydro, and locally produced bio fuels (coconut oil) to be used in generator systems. In exceptional circumstances, based on market demand, other solutions might be financed. The project consists of four components: (a) sustainable energy finance; (b) creation of a sustainable energy finance fund; (c) local knowledge development and mastering of renewable energy and energy efficiency technologies; and (d) incentive- or output based participant monitoring.

The total project cost, based on project activities starting in Fiji, Papua New Guinea, Solomon Islands, is estimated to be about US$30 million. GEF is expected to financeUS$10 million, with the rest of the funds coming from a variety of sources, including private equity, commercial funds, and other donors, such as the European Union Energy Facility.

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China, Financing of Two Biomass Projects in Inner Mongolia as Part of the CRESP Project
The authorities of the Xin’an Meng, Inner Mongolia, are planning to develop, with the support of the Inner Mongolian government, a biomass-based power generation program to replace small-fired and heavily polluting power plants and sell electricity to the grid. Initial plans call for 10 MW of biomass fired power generation and cogeneration units of 100 MW to replace all small coal power plants in the short term, and more in the future. This project, financed two of the potential biomass plants, follows on an ASTAE-funded activity that provided a scoping study report, including: (a) resource assessment; (b) regional potential for biomass power; (c) regional market evaluation; and (d) project identification, a pre-feasibility study, and other preparation activities. (More on China)

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Fiji Electricity Authority Renewable Power Development (RDP) Project (P099308)
The development objective of this project is to assist the Government of Fiji in meeting the current and future demand for electricity with a continuous and reliable power supply at the lowest possible cost. In particular, the Bank will assist the FEA in diversifying its energy portfolio to reduce its dependency on diesel oil. Key indicators include: (a) the energy capacity added to the grid; (b) the amount of actual generation added to the grid (GWh); (c) the resulting reduction in the cost of generating electricity (U.S. dollars per kWh), against a2006 base price and confirmation by a recent power sector analysis that renewable energy is indeed the least-cost solution; and (d) the reduction in greenhouse gas emissions.(More on Fiji)

Indonesia, Energy Efficiency Finance Project (P095746)
Under the Integrated Resource Planning Program, the Indonesian State Electricity Corporation (PLN) started to implement a DSM Program. The DSM program includes the introduction of energy-efficient lamps, energy labeling for household appliances, and some financial incentive schemes for consumers to shift peak demand and/or to improve efficiency, as well as energy audit services. It has three subprograms, namely, DSM Peduli (DSM for awareness of energy efficiency to household consumers at capacity below 900 VA), DSM PJU (DSM for Public Street Lighting), and DSM Terang (DSM for poor household consumers at capacity up to 450VA). The implementation of the program went well. A preliminary survey, done in 2002, shows that about 78 percent of targeted residential customers under the program have shifted to energy-efficient lamps. PLN has now requested Bank support to focus on improving its energy efficiency in the industrial and commercial sector.
(More on Indonesia)

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Mongolia, Renewable Energy and Rural Electricity Access Project (P099321/P084766)
This activity stems from an earlier and broader Mongolia project: Delivery of Infrastructure Services.

The development objective of the proposed project is to increase the access to and the reliability of electricity in rural Mongolia, so as to enhance the living standards of rural communities in off-grid soums (villages) and individual herders. This objective will be achieved by: (a) assisting the development of institutions and delivery mechanisms based on a partnership between the public and private sectors for rural electrification; (b) facilitating herders’ investments in solar home systems and small wind turbine systems; and (c) rehabilitating isolated soum center minigrids by improving their operations and management practices, followed by introducing renewable-diesel hybrid generation systems. The project also will help strengthen the institutional and regulatory capacity at the national level to develop grid-connected and off-grid renewable energy supplies.

The key development indicators include: (a) the percentage of the herder population with access to reliable electricity services provided by solar home systems and small wind turbine systems; and (b) the number of off-grid soum centers (and corresponding population) with improved reliability and affordability of electricity services supported by renewable-diesel hybrid systems.

ASTAE provided project identification and implementation support to increase access to electricity and improve reliability of electricity service among the herder population and in off-grid soum centers. The project was approved in December 2006. (More on Mongolia)

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China, Energy Efficiency Financing Project(P084874)
This project’s objective is to improve energy efficiency in medium-and large-scale Chinese industries by developing lending programs for sustainable, energy efficiency projects in selected banks to support energy-efficiency investments in these industries. The key performance indicators of the project will be energy savings achieved in medium- and large-scale industries, and associated emission reductions of greenhouse gases and other pollutants. Increases in the level of energy-efficiency project lending in participating banks will also be a key output indicator. Five commercial banks and two policy banks have shown strong interest in participating in the project and in becoming financial intermediaries, four of which (two commercial banks and two policy banks) have already formally submitted project applications to the government of China.

The proposed outcome of the project is to finance a line of credit to the selected domestic banks with an IBRD loan ofUS$200 million. Under the project, the selected banks will establish their energy-efficiency lending business with the support of the proposed technical assistance (up to US$15 million, including proposed GEF financing), and will utilize their own financial resources in addition to the Bank loan proceeds to increase the impact of the project. A proposed technical assistance may also support additional domestic commercial banks that are committed to energy-efficiency financing, but that are not participating in the IBRD on-lending support to further amplify the impact of the proposed project.(More on China)

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