Access to Energy for the Base of the - Ashoka

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80 Carbon credits is a challenging but significant funding opportunity Clean energy finance offers great possibilities … � Clean Development Mechanisms (CDM) credits – called “Certified Emission Reduction” credits, can be sold in global markets � This provides a clean energy project with an additional source of revenue � The revenue might be significant – incremental IRR of biogas projects is 25 - 60% Typical IRR increase on CDM financed projects % IRR with CDM revenue IRR without CDM revenue * Experts interviews, various projects Source: Hystra analysis; Alexandre Kossoy, World Bank Carbon Finance Unit, 2006; Quotes from Glenn S. Hodes , November 2007 CDM has also been credited with making viable entire new classes of projects, such as Waste Concern’s urban composting plant in Dhaka, which will reduce 89,000 tCO2e. 20 -15 Carbon finance value chain Revenue from sales of carbon credits Source: Hystra analysis; interviews 20 Figure 20 Explanation of carbon credits market Global carbon markets EcoSecurities aggregates credits and sells on carbon markets MicroEnergy Credits helps MFIs start and certify clean energy program Microfinance Institution finances customer purchase Clean energy customers …but implementation is a challenge � Largest challenge is political uncertainty: Copenhagen negotiations are one year away, and current protocol expires in 2012 � High transaction cost: $70k - $110k upfront, not smaller for smaller projects � Time consuming process � Hard to model: volatile prices over time, different prices based on technology, type of contract, etc. Figure 21 EcoSecurities / MicroEnergy Credits example Carbon markets are still under construction, and have been criticized for being difficult to access. Transaction costs are high, it is a time consuming process, and the price per ton fluctuates on the global markets, making it Reduced emissions due to clean energy purchase
difficult to predict revenue streams. However, the greatest challenge to this financing mechanism is political uncertainty. The current protocol expires in 2012, and energy entrepreneurs are waiting to see the outcomes of upcoming negotiations. Although the CDM system is inconvenient in some respects, financial intermediaries exist to match energy entrepreneurs and global markets, thereby helping to realize the market potential. For example, EcoSecurities is a company which sources, develops and trades emission reduction credits. It buys credits sourced from MicroEnergy Credits, a company which helps microfinance institutions move into the clean energy microfinance field using revenue from emission reduction credits. 21 The presence of specialized intermediaries all along the value chain indicates the maturity of the clean energy finance market. See the following pages for detailed cases: CASE STUDY PRODUCT PAGE 21 Source: interview with April Allderdice, MEC founder: http://microenergycredits.com African Rural Energy Enterprise Development Clean Energy Finance 82 E + Co Clean Energy Finance 84 81
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Access to Energy for the Base of th
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FOREWORD 1.6 billion people do not
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INTRODUCTION The opportunity to wri
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The projects discussed reflect mark
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Despite its size, the BOP energy ma
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3. STATEMENT OF THE PROBLEM Energy
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electricity generating targets over
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4.1 GRID CONNECTIONS Transforming s
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connections will provide safe, reli
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Before 1999, LYDEC experienced a lo
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LYDEC Legal slum grid connection in
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FUNDACION PRO VIVIENDA SOCIAL Natur
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SLUM ELECTRICITY COOPERATIVE Slums
Page 31 and 32: CONLOG Grid electricity with pre-pa
Page 33 and 34: CODENSA Slum Electricity grid conne
Page 35 and 36: 4.2 DEVICES Providing mass-market d
Page 37 and 38: A Mightylight, Cosmos pioneering so
Page 39 and 40: Enterprises on the way to being pro
Page 41 and 42: BSH PROTOS Plant Oil Stove Indonesi
Page 43 and 44: BP INDIA Mass-market bio-fuel pelle
Page 45 and 46: ENVIROFIT INTERNATIONAL Mass-market
Page 47 and 48: COSMOS IGNITE INNOVATIONS Solar LED
Page 49 and 50: D.LIGHT DESIGN LED-solar devices In
Page 51 and 52: TOTAL LPG Mobile Retail Dealers Ban
Page 53 and 54: VIDAGAS LGP for vaccines cold-chain
Page 55 and 56: 4.3 SOLAR HOME SYSTEMS Lighting, co
Page 57 and 58: Interview Solar Home Systems basic
Page 59 and 60: Finally, SHS have traditionally bee
Page 61 and 62: expects that the growing force of t
Page 63 and 64: Grameen Shakti has already built up
Page 65 and 66: Ability to solve the problem Econom
Page 67 and 68: � Financials: Solar technicians i
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Page 72 and 73: 70 A rural cooperative is an enterp
Page 74 and 75: 72 Additional investment is often r
Page 76 and 77: 74 � Financials: Hari Sharan, Fou
Page 78 and 79: 76 � Financials: Tri Mumpuni, Fou
Page 80 and 81: 78 The four groups of business mode
Page 84 and 85: 82 AFRICAN RURAL ENERGY ENTERPRISE
Page 86 and 87: 84 E+CO Clean Energy Finance Global
Page 89 and 90: 5 Recommendations
Page 91 and 92: 5. Support favourable energy regula
Page 93 and 94: such as charging mobiles for a smal
Page 95 and 96: 6 Appendix
Page 97: which corresponds to a daily income
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