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Building a Sustainable Energy Future for India

Building a Sustainable Energy Future for India. FINANCE FOR LOCAL SUSTAINABLE ENERGY: THE ROLE OF SOCIAL INVESTING, END-USER FINANCE AND CARBON FINANCE IN SCALING UP IDEI 8 - 9 February 2010. About IDEI. Vision IDEI is a social enterprise committed to providing

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Building a Sustainable Energy Future for India

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  1. Building a Sustainable Energy Future for India FINANCE FOR LOCAL SUSTAINABLE ENERGY: THE ROLE OF SOCIAL INVESTING, END-USER FINANCE AND CARBON FINANCE IN SCALING UP IDEI 8 - 9 February 2010

  2. About IDEI Vision IDEI is a social enterprise committed to providing long term solutions to poverty, hunger and malnutrition.

  3. Context • India: 433 million rural poor living under US$2 a day, agriculture dependent, limited access to irrigation water • Diesel pumps used widely. Expensive and encourages environmental damages • Little investment in technology which can help smallholder farmers • Unable to irrigate  migrate in search of work  leave land fallow • Solution by IDEI: treadle pump

  4. Social and Economic Benefits • Cropping cycle increased from one to two or three per year. • Crop variety increased bringing more income Additionally, families with improved diet • Increased income also spent on school-going children • Convenient. In the words of a user: • ‘Difference between public transport and owning a bicycle’

  5. Emission Reduction The treadle pump has saved over 550 million litres of diesel and led to carbon reduction of 1.5 milliontonnes of CO2eq

  6. Employment Generated Million work days Monetised Value in USD Million On farm 433 541 Installation 0.61 1.06 Total supply chain =2.5 Manufacturing 0.43 1.09 Retailing 0.13 0.23

  7. Scaling up challenges • Raising investment capital • Market rates Vs MRI/ PRI • Securing End User Finance • Lacking access for smaller loan sizes • Repayment schedule not in sync with crop cycle • Agriculture: a risky investment

  8. Scaling up Challenges • Carbon Finance: An Option • 2001 • Initial efforts started with the establishment of the monitoring process • Monitoring Process initiated –usage of Treadle Pump across season & crops • 2002 • Explored the CDM methodology for obtaining credits • Approached and • received the Ministry for Host Country Approvals INITIAL ATTEMPT • Experience • Low Rates ( $2/ tn) • No takers for credits generated by IDEI

  9. Scaling up Challenges • Carbon Finance: An Option 2005 Baseline conducted by TERI • 2006 • IDEI received Ashden Awards • Dialogue with Climate Care completed for technical support (PDD) and buying of credit

  10. Scaling up Challenges • Carbon Finance: An Option JP Morgan Climate Care appointed TUV NORD as the validating /verification agency Validation/PDD stage : Identification of Methodology (Renewable energy project :AMS-I.B.: Mechanical energy for the user with or without electrical energy, Version 10) ( Small Scale Project) Baseline, tonnage calculated : 177,376 CO2 e Total no of TPs : 68,386 Verification Stage: All records are physically verified Verification at randomly selected TP sites In-depth interview with farmers , cross validation of the recorded data Short campaign vehicle in TN

  11. Scaling up Challenges • Carbon Finance: An Option • Challenges faced • a) Monitoring Sample Design • b) Dispersed nature of • installation • c) Technical Support • d) Buyer & Rates

  12. Carbon Finance: Future 2009 IDEI received Outstanding Achievement Award at Ashden Treadle Pumps VCS Gold Standards (JP Morgan Climate Care) Drip Irrigation In dialogue with The Carbon Neutral Company First Climate & JP Morgan Climate Care (TERI baseline complete)

  13. Policy Recommendations • Dedicated fund for end user financing • Credit options for the supply chain – small manufacturers and dealers

  14. “I sit on a man's back, choking him and making him carry me... I am very sorry for him and wish to ease his lot my all possible means - except by getting off his back”: Leo Tolstoy Thank you for listening

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