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Increasing access to energy services in rural areas - REEEP ...

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SUSTAINABLE ENERGY REGULATION AND POLICYMAKING TRAINING MANUAL<br />

page 10.36<br />

• Direct cost for R&D: There are some subsidies for <strong>rural</strong> <strong>energy</strong> research and<br />

development <strong>in</strong> many develop<strong>in</strong>g countries. Aga<strong>in</strong>, tak<strong>in</strong>g Ch<strong>in</strong>a as an example,<br />

the annual budget for biogas, small hydropower and improved s<strong>to</strong>ves is<br />

about RMB 100 million RMB (13 million $US, 2007 April exchange rate).<br />

• Projects subsidies: In some cases, special f<strong>in</strong>ancial agencies have been set up<br />

for <strong>rural</strong> <strong>energy</strong> project f<strong>in</strong>anc<strong>in</strong>g, such as IREDA <strong>in</strong> India, which offers softterm<br />

loans vary<strong>in</strong>g at present from 2.5–14 per cent. S<strong>in</strong>ce 1987, IREDA secured<br />

<strong>in</strong>ternational fund<strong>in</strong>g for the solar pho<strong>to</strong>voltaic and thermal, small hydro and<br />

w<strong>in</strong>d sec<strong>to</strong>rs through the World Bank and the Asian Development Bank. As a<br />

government agency, IREDA started cautiously, tak<strong>in</strong>g bank guarantees from the<br />

beneficiary for releas<strong>in</strong>g credits <strong>in</strong> any of the modes available with them. By<br />

mid 1998, IREDA had sanctioned 963 projects cover<strong>in</strong>g over 300 million $US<br />

and the loan recovery rate has been as high as 99 per cent.

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