65692 TRANSFER OF ENVIRONMENTALLY SOUND TEchNOLOgIES: CASE STudiES FROm GEF ClimATE ChANGE PORTFOliO Foreward Monique Barbut CEO and Chairperson Global Environment Facility Since its inception in 1991, the Global We are excited to share case studies of some Environment Facility (GEF) has been facilitating of the key technologies and mechanisms that technology transfer to help developing countries the GEF has supported to date, encompassing address the global climate change challenge. the areas of renewable energy, energy The GEF has evolved into the largest public- efficiency, sustainable transport, and innovative sector funding source for the transfer of financing. The case studies on fuel cell buses, environmentally sound technologies (ESTs), and concentrating solar power (CSP), and wind has supported technology transfer activities in energy are some of the seminal examples of the almost 100 developing countries. Our current GEF support spurring innovation in developing project portfolio, upon completion, is expected countries. The brick making example highlights to eliminate more than 2.7 billion tonnes of CO2 how energy efficiency could be improved emissions. Along the way, a wealth of knowledge drastically in an industry that is ubiquitous in so on technology transfer has been generated, many developing countries, and be up-scaled which merit being harnessed and shared with a through South-South technology transfer. The wide audience. innovative financing example showcases the merits of financial instruments in promoting With this background, we are stepping up investments for technology transfer. our dissemination initiative to build a better articulated and more in-depth understanding of We hope that the following pages will help the technology transfer process and the role of readers gain a better understanding of our the GEF. The dissemination initiative enables us efforts in transferring ESTs, and will inspire to share our experiences on the ESTs that have further EST adoption around the globe. already been successfully demonstrated with GEF support to a wider range of countries and stakeholders—with a view to facilitating further adoption of these technologies. This publication is part of a series of products and activities for dissemination, developed under the Poznan Strategic Program on Technology Transfer. The Poznan Program was established in 2008 under the guidance of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) to scale up the level of investments in technology transfer in order to help developing countries address their needs for ESTs, and to enhance technology transfer activities under the Convention. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 1 Evolution of gEF Policies and Approach to Technology Transfer Introduction Technology transfer plays an increasingly critical role in the global response to the challenges of climate change. The transfer of environmentally sound technologies (ESTs) is embodied in the very fabric of the United Nations Framework Convention on Climate Change (UNFCCC).1 Since the First Session of the UNFCCC Conference of Parties (COP), the Global Environment Facility (GEF) has served as an operating entity of the financial mechanism of the Convention. It has responded to guidance by the COP on policies and program priorities, many addressing the financing of ESTs. To improve its effectiveness and scope in response to changing needs, COP guidance, and funding levels, the GEF has regularly examined and modified its strategic approach to critical technology transfer activities. gEF Pilot Phase (1991–1994) to gEF-1 (1994–1998) During the GEF’s pilot phase from 1991 to 1994, funded projects primarily aimed to demonstrate diverse technologies that would be useful in stabilizing the concentrations of greenhouse gases (GHGs) in the atmosphere. After the restructuring of GEF in 1994, the GEF Council approved a broad operational strategy and a specific climate change strategy to support “sustainable measures that minimize climate change damage by reducing the risk, or the adverse effects, of climate change.� The strategy also stated that the “GEF will finance Biomass is biological material, including wood, crops, as agreed [upon] and eligible enabling mitigation well as wastes such as agricultural and forest residues, and adaptation activities in eligible recipient that can be used to generate electricity or produce heat. countries� (GEF 1995). 2 THE GLOBAL ENVIROMENT FACILITY Further, the operational strategy identified three long-term operational programs to BOX 1: TechnOlOgy Transfer support climate change mitigation and DefiniTiOn another program for cost-effective short-term response measures Short-Term Response While there are many definitions of technology transfer, Measures (STRMs).2 The long-term programs the GEF has adopted the concept of technology transfer as facilitated technology transfer through support defined by the Intergovernmental Panel on Climate Change for less cost-effective interventions and by (IPCC) and embodied in the UNFCCC technology transfer distinguishing among technologies on the basis framework. Technology transfer is defined as: of their maturity and commercial availability. All of the programmatic long-term approaches … a broad set of processes covering the flows of and short-term projects promoted mitigation know-how, experience and equipment for mitigating through the use of commercialized or nearly and adapting to climate change amongst different commercialized technologies that were not yet stakeholders such as governments, private sector widely disseminated in developing countries or in entities, financial institutions, non-governmental countries with economies in transition. organization (NGOs) and research/education institutions… gEF-2 (1998–2002) to gEF-3 (2002–2007) …the broad and inclusive term “transfer� encompasses diffusion of technologies and technology cooperation Subsequent GEF operational programs across and within countries. It covers technology addressed technology transfer through a focus transfer processes between developed countries, on energy efficiency and renewable energy developing countries and countries with economies technologies that were mature, available in in transition, amongst developed countries, amongst international markets, and profitable, yet faced developing countries, and amongst countries with human, institutional, technological, policy, or economies in transition. It comprises the process of financial barriers to dissemination. These projects learning to understand, utilize and replicate the were termed “barrier removal� projects, as they technology, including the capacity to choose and sought to remove such barriers to accelerate adapt to local conditions and integrate it with adoption of new technologies and practices. indigenous technologies. Another operational program focused on This definition includes a wide range of activities and reducing the long-term costs of low GHGs extends to a broad array of institutions. The COP established emitting electricity generating technologies. the Expert Group on Technology Transfer (EGTT) under the The technologies included in this program Subsidiary Body for Scientific and Technological Advice (e.g., concentrating solar power (CSP) plants, (SBSTA), which defined the following five-part framework biomass-integrated combined-cycle generation, for meaningful and effective actions to enhance the stationary fuel cells, and microturbines) were implementation of technology transfer: technology needs not yet commercially available at the time and and needs assessments; technology information; enabling were very expensive relative to the baseline environment; capacity building; and mechanisms for or conventional alternatives. In these cases, technology transfer. significant incremental costs remained—the technology costs themselves formed the barrier to greater dissemination and transfer. 1 Article 4.5 of the Convention states: “The developed country Parties and other developed Parties included in Annex II shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention. 2 Short-term projects are considered extremely cost-effective, with a unit abatement cost of less than $10/ tonne of carbon avoided, or roughly $2.7/tonne of CO2 equivalent avoided. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 3 A sustainable transport program approved by the gEF-4 (2007–2010) and Poznan GEF Council in 2000 contained a combination of approaches, including one focusing on cost- Strategic Program on Technology effective yet underutilized technologies and Transfer practices, and another on technologies that were not yet fully developed. As part of the GEF-4 replenishment process, the climate change strategy for mitigation In 2004, with the benefit of several years of was revised to focus primarily on six strategic implementation and monitoring experience, the objectives, each with important technology GEF’s operational strategy for removing barriers transfer elements: to renewable energy and energy efficiency technologies was judged successful—but in 1. Energy efficiency in buildings and need of codification. Accordingly, five key appliances potential barriers to more efficient, market-driven dissemination of technologies in developing 2. Industrial energy efficiency countries were identified as follows: 3. Market-based approaches for renewable n Policy frameworks: Governments must energy play an essential role in setting policies favorable to the adoption of ESTs; 4. Sustainable energy production from biomass n Technology: Options should be robust and operational. The more mature a 5. Sustainable innovative systems for urban technology, the easier it is to transfer; transport n Awareness and information: National 6. Management of land use, Land Use, stakeholders, especially market Land-Use Change, and Forestry participants, must be aware of the (LULUCF) as a means to protect carbon technology and have information on its stocks and reduce GHG emissions. costs, uses, and markets; n Business and delivery models: Market- based approaches are preferred; businesses and institutions must be in place that can deliver to and service those markets; and n Availability of financing: Financing must be available for technology dissemination, though it is insufficient in itself to ensure uptake of ESTs. 4 THE GLOBAL ENVIROMENT FACILITY Photovoltaic panel installation in Bozcaada Island, Turkey as part of the Poznan Strategic Program on Technology Transfer pilot project, implemented by the United Nations Industrial Development Organization (UNIDO). GEF experiences leading up to GEF-4 had These observations provided important insights generated the following observations about for the Poznan Strategic Program on Technology technology transfer to inform subsequent Transfer, which was developed in response to the programming: 13th COP to the UNFCCC (Decision 4/CP.13), which requested the GEF to elaborate a strategic n Technology is transferred primarily program for scaling up investment in technology through markets, and barriers to the transfer to help developing countries address efficient operation of those markets must their needs for ESTs. The 14th COP welcomed be removed systematically; the GEF’s program in its Decision 2/CP.14. The Poznan Strategic Program on Technology Transfer n Technology transfer is not a single established the following three windows within event or activity but a long-term the GEF in support of technology transfer: engagement, during which partnerships and cooperation, often requiring 1. Conduct Technology Needs Assessments time to develop and mature, are (TNAs) mandatory for the successful development, transfer, and 2. Pilot priority technology projects linked to dissemination of technologies; and TNAs n Technology transfer requires a 3. Disseminate GEF experience and comprehensive approach, incorporating successfully demonstrated ESTs capacity building at all relevant levels. During GEF-4, the Poznan Strategic Program was provided $50 million, including $35 million from the GEF Trust Fund, and $15 million from the GEF Special Climate Change Fund (SCCF). TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 5 gEF-5 (2010–2014) Objective 5: Promote conservation and enhancement of Under GEF-5, funding pledge for the climate carbon stocks through sustainable change mitigation program has expanded to management of land use, Land-Use Change, approximately $1.4 billion, and the climate and Forestry change strategy increases the priority of technology transfer in all elements of the Objective 6: portfolio. Support enabling activities and capacity building Development of the climate change focal area strategy for GEF-5 drew on past experience and The first objective focuses on innovative was guided by three principles: (1) responsiveness technologies at the stage of market to Convention guidance; (2) consideration of demonstration or commercialization where national circumstances of recipient countries; technology push is still critical. The second to and (3) cost-effectiveness in achieving global fifth objectives focus on technologies that are environmental benefits. GEF-5 endeavors commercially available in the country but face to make a transformative impact in helping barriers and require market pull to achieve GEF-recipient countries move to a low-carbon widespread adoption and diffusion. The last development path through market transformation objective supports enabling activities and of and investment in environmentally sound, capacity building under the UNFCCC that can be climate-friendly technologies. critical to successful technology transfer. The climate change portfolio in GEF-5 will In summary, it is clear that GEF climate change continue to support the technology transfer investments have promoted technology transfer framework outlined by the COP through the six at all stages of the technology development key objectives: cycle, from demonstration of innovative, emerging low-carbon technologies to diffusion of Objective 1: commercially proven, ESTs and practices. GEF- Promote the demonstration, deployment, and 5 investments will continue this comprehensive transfer of innovative, low-carbon approach. technologies Objective 2: Promote market transformation for energy efficiency in the industrial and buildings sectors Objective 3: Promote investment in renewable energy technologies Objective 4: Promote energy-efficient, low-carbon transport and urban systems 6 THE GLOBAL ENVIROMENT FACILITY Featured EST case Studies GEF technology transfer investments have generated not only significant emissions reductions, but a body of knowledge and lessons learned that are informing today’s technology transfer activities. This publication features some of the key EST supported by the GEF to date, encompassing the areas of renewable energy, energy efficiency, sustainable transport, and innovative financing. The case studies include the following: 1. Concentrating Solar Power (CSP) 2. Energy efficient kilns for brick making 3. Wind power 4. Fuel Cell Bus (FCB) 5. Innovative financing for energy efficiency The case studies provide background information, project description, technology description, as well as results and outcomes. The common features of successful EST transfer projects are identified to inform future projects in the last section of the publication. CFE’s (Comison Federal de Electricidad) La Venta II Wind Farm in Oaxaca, Mexico. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 7 concentrating Solar Power in Egypt Introduction CSP technologies use technologies use renewable solar resources to generate electricity. In locations with plentiful sunshine, generally clear skies, and access to high voltage transmission lines, CSP, with their capacity for heat storage, can provide reliable electricity that can be dispatched when needed. These technologies are proven and commercially available in advanced economies such as the United States and Spain. GEF CSP projects have played an important role in demonstrating the viability of CSP technologies in developing countries and supporting better understanding of costs, benefits, and risks—key elements for successful technology transfer. In 1996, the GEF’s Scientific and Technical Advisory Panel (STAP) recommended CSP projects due to the technology’s readiness, potential for continuing cost reductions, and possibilities for large-scale and cost effective baseload power applications in countries with high levels of solar radiation and growing demand for electricity. Since then, the GEF has supported CSP projects in four countries: Parabolic troughs consist of a reflector that follows the sun along a single axis and concentrates light onto a tube filled with a working fluid, which is chosen for its thermal management properties. The fluid is heated to 150–400°C and flows to a heat exchanger where it is used to make steam and drive a power generation cycle. 8 THE GLOBAL ENVIROMENT FACILITY n Integrated Solar Combined Cycle System and power towers. Each of these approaches can Project in Al Kuraymat, Egypt, with the produce high temperature thermal energy. World Bank Parabolic troughs consist of a reflector n Hybrid Solar Power Plant in Agua Prieta, that follows the sun along a single axis and Mexico, with the World Bank concentrates light onto a tube filled with a working fluid, which is chosen for its thermal n Integrated Solar Combined Cycle System management properties. The fluid is heated to Project in Ain Beni Matar, Morocco, with 150–400°C and flows to a heat exchanger where the World Bank it is used to make steam and drive a power generation cycle. n Concentrating Solar Power for Electricity Generation in Namibia, with the United The integrated solar combined cycle—blending Nations Development Programme CSP with conventional power generation (UNDP). technologies—is one of the most cost effective CSP designs and is conducive to technology The GEF investment in these projects transfer. This approach offers the ability to totals about $144 million and they involve dispatch power even when the sun is not approximately $314 million in cofinancing. These available and without need of thermal storage, projects were an important component of the thus enabling operation as baseload power GEF’s portfolio of renewable energy projects and generation. when completed will deliver substantial carbon free electric capacity in the host countries. Integrated solar combined cycle power plants using parabolic troughs have reached commercial The technology transfer aspects of the GEF’s readiness and can produce electricity at costs of CSP projects have each followed a deliberative $0.20/KW-hour or less, depending on the size path as developers, suppliers, power companies, and location of the project, and the availability of lenders, and government agencies have learned financial incentives. about the costs, benefits, and risks of CSP technology. The projects also addressed key According to the United States National technology, market, and policy barriers to greater Renewable Energy Laboratory (NREL), there CSP use. The projects are supporting hybrid or are 48 CSP power plant projects worldwide at integrated systems approaches which combine various stages of construction that use parabolic solar technologies with conventional fossil fuel trough technologies.3 Most of these involve power generation, although the technology Steam Rankine Cycle systems; only a few involve for the Namibia CSP project has not yet been integrated solar combined cycle systems, which selected. have not been demonstrated to the same extent as other CSP plants (World Bank 2006). This lack Technology Description of experience poses risks for potential users in selecting among design options for both the CSP plants produce electricity by using the sun’s solar and fossil energy contributions, and for the energy to heat a working fluid to make steam role of thermal storage in the operation, cost, and that then drive engines or turbines for electric overall energy efficiency of the projects. There are power generation. CSP currently uses four also questions about business models for project different types of solar technologies for making development and the relative merits of having a heat: parabolic troughs (as at Al Kuraymat), “turnkey� supplier for the whole project versus Stirling engine dishes, linear Fresnel reflectors, separate suppliers for the solar and fossil energy systems, subsystems, and components. 3 A list of these projects can be found at http://www.nrel.gov/csp/solarpaces/parabolic_trough.cfm. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 9 Project Description The Al Kuraymat project is being carried out by the New and Renewable Energy Authority (NREA) Initial planning and feasibility studies for the in Egypt and includes cofinancing from the Japan application of CSP in Egypt began more than 10 Bank for International Cooperation. years ago and led to the eventual selection of the Al Kuraymat site for the following reasons: The project includes two parts: a combined cycle island (natural gas turbines) and a solar n Proximity to a major load center (about island. Contractors were competitively selected 90 km south of Cairo) through a request for proposal. The contract for the combined cycle island went to Iberdrola n High level of solar radiation and a flat Ingeniería y Construcción; the solar island terrain contract went to ORASCOM Construction Industries. Construction began in 2008 and the n Nearby availability of water and natural plant is expected to be commissioned in 2010. gas The project has an overall capacity of about 126 MW, with a solar contribution of about 20 MW. In n Access to the electric transmission this project the solar energy partially substitutes system at 550, 200, and 66 kilovolts. for fossil fuels, and thus reduces GHG emissions.4 The solar island at Al Kuraymat consists of a parabolic trough solar field with a total area of about 130,800m2 that is expected to deliver thermal energy at a temperature of about 390oc. 10 THE GLOBAL ENVIROMENT FACILITY The solar island at Al Kuraymat consists of a Results and Outcomes parabolic trough solar field with a total area of about 130,800m2 that is expected to deliver The expected benefits of the Al Kuraymat project thermal energy at a temperature of about 390oc. over a conventional natural gas combined cycle The combined cycle island consists of a 74 MW system include increased renewable electricity gas turbine, a 59 MW electric heat recovery production of about 80-85 GW-hours per year steam generator, and a solar heat exchanger. The and reduced carbon emissions of about 149,975 Al Kuraymat project does not use thermal storage tonnes over the life of the project (GEF 2009c). and has separate suppliers for the solar and fossil portions of the project. The technology transfer challenge for integrated solar combined cycle systems depends on a The objectives of the project are to: variety of factors, including suitable locations with access to water and natural gas, favorable n Demonstrate the cost effective government policies, proper project finance, and generation of at least 20 MW of cost effective access to electric transmission for concentrating solar power generation delivering the power to market. The Al Kuraymat from the integrated solar combined cycle project developer, NREA, has indicated long plant and realize associated reductions in term plans for the deployment of integrated GHG emissions; solar combined cycle systems elsewhere in Egypt and in other countries and regions. Those n Demonstrate the successful integration plans call for developing about 750 MW of CSP of a concentrating solar power plant in capacity by 2020 in locations worldwide based the Egyptian electric grid and the on experiences from Al Kuraymat.5 However, for delivery of the power to Egyptian load these plans to be realized, new locations need to centers; be identified, and projects need to be designed, sited, and financed properly and supported n Demonstrate successful project locally with appropriate policies, regulations, management and engineering process and incentives. Access to the electric grid and for replication in other locations in Egypt the availability of long term power purchase and elsewhere; and agreements will be important ingredients for projects successfully moving forward. n Develop CSP expertise and position Egypt as a solar energy developer for The Al Kuraymat project is providing technology transfer projects valuable information on costs, risks, technical internationally (GEF 2009c). performance, and the necessary ingredients for successful business cases for integrated solar combined cycle systems. This information is essential for government agencies, suppliers, developers, financiers, and power companies to implement new projects, assuming appropriate locations and grid access can be found. The Al Kuraymat project is confirming several key hypotheses about integrated solar combined cycle technologies for successful technology transfer: 4 See http://www.menarec.org/resources/Kuraymat-E-+Nov.2007-CU.pdf 5 For further information, see http://www.menarec.org/resources/Kuraymat-E-+Nov.2007-CU.pdf TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 11 n That they are relatively mature and n It is very helpful for projects to be that no further breakthroughs in science located in countries with supportive and engineering are needed for cost national policies such as purchase reductions to continue; requirements for renewable power generation, renewable portfolio n That they can provide power even when standards, investment tax and the sun is unavailable and thus do not production credits, or other forms of require energy storage, or special grid incentives to enhance financial integration strategies, both of which can attractiveness of the project. add cost and complexity to a project; n It is important to involve local or national n That they can be operated as baseload power companies to lower the technical power plants in large arrays for bulk risk, boost financial attractiveness, ensure power markets or in smaller units for grid access and integration and for there distributed energy applications; and to be a long term power purchase agreement in place. n There are many potential sites in developing countries and regions around Going forward, the GEF will continue to be the world that provide favorable interested in supporting cost effective projects conditions such as high levels of solar that build on the lessons learned from Al radiation, relatively flat terrain, and access Kuraymat and the other CSP projects. GEF to water and natural gas supplies. assistance will be particularly important in those countries that are experiencing growth in In pursuing technology transfer opportunities electricity demand and are interested in adding several key lessons should be addressed to new power supply technologies that have lower ensure best practices are replicated properly. For GHG emissions than conventional fossil energy example: plants. n It is important for the project’s business model to be clear from the outset to avoid delay. Specifically, if the projects are not government-led and involve primarily private financing, then national and local government participation and support must be included from the outset of the projects. n The competitive bidding process for design and construction contractors should be designed to ensure that there will be quality offers from reputable firms and also allow for flexible exit strategies should milestones not be met. 12 THE GLOBAL ENVIROMENT FACILITY Energy Efficient Kilns— Brick Making in Bangladesh Introduction The GEF has become one of the world’s largest public sector funders of energy efficiency, having invested $1.1 billion in approximately 200 projects in 90 countries. These investments have attracted an additional $7.1 billion in cofinancing. The GEF has focused its investments on projects that tackle technology, policy, and market barriers, including more favorable policies and regulations such as appliance labeling and standards, market conditioning such as financial instruments, and technology transfer such as demonstration of appliances and equipment. Table 1 summarizes the history of GEF investments in energy efficiency and a project portfolio that has increased steadily over each GEF replenishment phase. Energy efficiency projects are expected to be a significant part of the GEF-5 replenishment phase (2010–2014). Brick making is a common sight in rural areas in Asia as the raw materials are readily available and the demand for building materials continues to grow. After mixing with water, the clay is shaped into bricks, dried and fired. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 13 TaBle 1 leVel Of gef financing in energy efficiency Phase Number of Projects GEF Financing Cofinancing ($million) ($million) GEF Pilot (1991–1994) 11 67.6 347.4 GEF 1 (1994–1998) 19 164.4 626.1 GEF 2 (1998–2002) 35 207.1 1,407.0 GEF 3 (2002–2006) 37 273.1 1,509.2 GEF 4 (2006–2010) 101 473.4 3,201.8 Total 203 1,185.8 7,091.5 The GEF’s investments in energy efficiency To address these needs, the GEF has projects include both urban and rural areas. spearheaded a global effort to improve the As a result, the GEF has been able to address energy efficiency of kilns for brick making urbanization pressures by investing in local and has invested in projects in China, India, projects which provide both energy savings and Vietnam, and Bangladesh. These projects have incomes for rural populations. One important been mutually supportive—sharing lessons target for rural energy efficiency improvements is learned on technologies, capacity building, and brick making. The economies of many developing commercialization strategies. The project in countries have growing building construction Bangladesh is the most recent example of this sectors so the demand for bricks and other successful “South-South� effort in technology building materials is on the rise. Traditional brick transfer. making industries have trouble keeping pace with the demand. For example, some of the key technical performance issues for rural brick makers include: n Product quality. Improving thermal and moisture properties so that products can satisfy building codes and standards that are being improved worldwide for energy efficiency, fire, flood, and earthquake protection; and n Energy and costs. Traditional brick making consumes at least 3 to 5 times more energy than advanced industrial brick making—improving energy efficiency is critical to cost- competitiveness. 14 THE GLOBAL ENVIROMENT FACILITY Project Description The project aims to transform the brick kiln industry by demonstrating the superior The period of performance of the GEF project performance of the more energy-efficient in Bangladesh is 2009–2014. The GEF is Hybrid Hoffman Kiln (HHK) technology—the investing $3 million and is leveraging $11.1 same technology demonstrated in China by a million in cofinancing. In partnership with GEF-supported project. Removal of barriers UNDP, the project aims to remove barriers to and successful adoption of the HHK technology the widespread adoption of energy efficient will lead to a decline in the emissions of not kilns and energy efficient practices by the brick only GHGs but also other pollutants and at the making industry, lower consumption of fossil and same time markedly improve the profitability of biomass fuels in Bangladesh, and reduce GHG the small and medium enterprises (SMEs) that emissions and local air pollution. The project will comprise Bangladesh’s brick making industry. use the results of the pilot phase, during which a demonstration energy efficient kiln will be In 2005, a team from the Bangladesh University installed, and apply these to implement another of Engineering and Technology (BUET) and the 15 demonstrations over a 5-year period. Bangladesh Brick Manufacturers and Owners Association visited with the Research and Design The project is supporting an integrated set of Institute of Wall and Roof Materials in Xian, components: (1) re-confirmation of all technology China. The purpose of the trip was to evaluate options; (2) establishing demonstration Chinese brick making technologies and make projects; (3) technical and managerial capacity site visits to operating brick fields. This mission development; (4) communications and awareness; determined that Chinese techniques and HHK (5) financing support; (6) policy and institutional designs could be adapted and deployed in support; and (7) project management support. Bangladesh. Bricks brought back from China were tested at BUET and were found to be of superior quality than those produced in Bangladesh from higher quality clay. With GEF support. Liucun Hollow Brick Plant in Shaanxi Province, China, as shown here and in the next page, constructed this energy-efficient brick kiln. This technology has been diffused to many villages in Shaanxi, and is being adopted by brick plants in Bangladesh.� TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 15 Technology Description SMEs dominate brick making in Bangladesh and there are few, if any, cooperative or large-scale Total brick production in Bangladesh is estimated operations. Most brickfields are on leased land to be over 12 billion bricks annually with an and have no permanent facilities. This, along with estimated sales value of around $450 million, the seasonal nature of production, contributes to almost 1% of Bangladesh’s gross domestic the itinerant nature of the industry. The average product. In the last decade, demand has risen brickfield employs about 120 skilled and unskilled steadily and annual growth rates have ranged workers. Apart from six to ten permanent from 8.1% to 8.9%. Brick making is the largest employees, most are employed for only six stationary source of local air pollution and GHG months during the production season. emissions because brick kilns inefficiently burn large quantities of coal and biomass. According The basic ingredient of bricks is clay. After mixing to a BUET study, the brick making industry is with water, the clay is shaped into bricks, dried, the largest consumer of coal in the country, and fired. The firing fuses the clay particles to using about 2.2 million tons every year, along form a ceramic bond. Depending on the type with about 1.2 million tons of biomass. Carbon of clay, bonding happens at temperatures emissions are estimated to be about 3 million between 900 and 1,200°C. The bond gives bricks tonnes annually. Brick Making in Bangladesh is strength and resistance to erosion by water. The locally described as a seasonal industry with old temperature at which bricks are fired is critical. technologies, low labor productivity, non-existent If it is too low, the bond is poor, resulting in a capitalization, and with informal management. weak product. If it is too high, the brick slumps or melts. As fuel is a major cost, using it efficiently is essential. 16 THE GLOBAL ENVIROMENT FACILITY Bangladeshi researchers and industry representatives visited Chinese brickfields to evaluate Chinese brick making technologies. Three types of brick making technologies taller chimneys and underground piping dominate the traditional Bangladeshi brick necessary to divert the flue gas to the fixed making industry. Of these, the Fixed Chimney chimney. This required extending the width of Kiln (FCK) is the most common, followed by the the base. The taller chimney creates a stronger Bull’s Trench Kiln (BTK), the Zigzag Kiln and the draft, which improves combustion to some Gas Hoffman Kiln. A 2006 study by BUET for extent and enables flue gas to be released at UNDP found that there were approximately 4,140 a higher elevation, dispersing the pollution licensed kilns in the country with FCKs (actually over a wider area. This “new� kiln was the FCK, modified BTKs, as discussed below) holding the which is essentially a BTK with a fixed chimney largest market share at 76%. superimposed on it and slightly improved energy efficiency. Brick making in Bangladesh is a highly energy intensive and carbon emitting activity. Prior to The HHK involves a permanent structure and is a 2004, about 95% of kilns in Bangladesh were hybrid version of the less-used Gas Hoffman Kiln based on the 150 year-old BTK technology. As (GHK). Structurally, it is built like the GHK except the name implies, the kiln is essentially a trench that the fuel used is coal. The inner kiln lining is in the ground with a crude structure built over made from refractory bricks and then plastered it that serves as an enclosure in which the bricks over by refractory cement. The firing chamber are fired. Heat loss to the surrounding air through can be filled manually or automatically with green the kiln walls is excessive and the uncontrolled bricks, usually about five to six thousand bricks burning of coal in the kiln creates a high level of at a time, in line stacks of around one thousand local emissions. In 2004, following a government each. The firing time for each line stack is about order to raise smokestacks to approximately 36.6 half an hour. The fuel, granulated coal, is fed into meters, BTKs were modified to accommodate the firing zone in the kiln through stoke holes on TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 17 the roof. Air required for the combustion process Results and Outcomes is forced from behind. As it reaches the line to be fired, the air is already preheated from the Successful implementation of the 16 previous firing zone thus reducing firing time and demonstration kilns in Bangladesh is expected to energy usage. The temperature in the firing zone result in energy savings of about 15,415 terajoules can reach as high as 1,800oc. of energy, which is the equivalent of about 525 kilotons of coal. This reduction in energy use will In addition to improved kiln efficiency, a result in reductions of about 1.32 million tonnes technique commonly used in the HHK model in of CO2 emissions during the 15-year expected China is to inject coal into the green bricks. This service life of the kilns. technique enables better thermal bonding and reduces fuel usage, and hence carbon dioxide The GEF project is expected to strengthen and other emissions. Clay is premixed with management and technical capacity of SMEs granulated coal and then extruded to produce in Bangladesh to manage energy efficient kiln the green bricks. This is a unique process and is operations, and to provide for a pool of technical fundamental to the energy efficiency achieved support consultants and services companies, as in brick making in China. Almost 80% of the well as technical institutes and local equipment total energy required is injected into the bricks suppliers of affordable technologies. This will and only about 20% is fed externally into the be accomplished through enhanced training firing chamber. Over 95% of the fuel mixed into programs, application of standardized and the brick undergoes combustion during firing. comprehensive training materials, mobilization This technique, which has not been used in of local manufacturing investment to produce Bangladesh, will be implemented as part of the higher energy efficiency equipment, and creation demonstration project. of new and stronger industry support groups. Considering that one HHK is roughly equivalent Each HHK facility involves a kiln that is to 7.5 FCKs based on the annual brick production approximately 18 meters long, 15 meters wide of each kiln type (15 million for HHKs versus 2 and 4 meters high, 18 doors, and no chimney. It million for FCKs), the 16 demonstration HHKs is built on four to five acres of land, requires 88 would be the equivalent of 120 FCKs, which workers, and can produce about 15 million bricks represents a 2.1% market share of the forecasted annually. installations of 5,454 FCKs in Bangladesh by year 2014. The key technology transferred, HHKs, offers a number of measurable benefits. Each HHK is more energy efficient through better kiln insulation that reduce heat losses, use of waste heat for drying green bricks, and the improved controls of air flows in the kiln. This results in several environmental advantages including reductions in smoke, soot, and other forms of air pollution, reduced land degradation by enabling use of river and lower quality clay, lower water use, reduced use of wood and other forms of biomass for fuel, and lower GHG emissions. Reductions in the use of energy and coal also 18 THE GLOBAL ENVIROMENT FACILITY A brickyard in Bangladesh. mean reductions in brick production costs. In These advantages present opportunities addition, the improvements in mechanization in for expansion of market share over time as the energy efficient kilns also mean higher labor experience is gained with the HHK technology. productivity, which enables business operators There are common problems with brick making to afford higher wage levels. Mechanization across South and Southeast Asia for which HHK also improves working conditions and improves and other energy efficient kilns offer significant worker safety through reductions in amount advantages. However, HHKs and other energy of manual labor where worker safety is at risk. efficient models are relatively more expensive Other labor benefits include more opportunities to construct and operate than traditional kilns. for year round employment, which contributes Like Bangladesh, India, Vietnam, and China, to family stability and improved standards of other countries in these regions need to address living. Another important result is the production the energy and environmental problems from of stronger and higher quality bricks, including inefficient and polluting brick kilns. Continued improvements in strength and consistency in technology transfer of efficient brick making shape and size. technologies, such as HHK, is likely with continued lowering of market and non-market barriers, increased awareness of local brick makers, and recognition by local and national governments on the full range of societal benefits. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 19 Wind Power—Development and Deployment in Mexico Introduction Wind turbines are market-ready renewable power plants in many countries, and are among the fastest growing forms of electric generation in the world. In the last 25 years, wind power capacity has grown annually by about 40%, with more than 98% of this capacity located in industrialized countries. One reason for this growth has been steady improvements in technology leading to decreases in wind power costs. However, technical and institutional barriers remain with integrating wind, and its intermittent output, into traditional practices for electric grid system planning and operations. In parts of the world where wind power adoption has been relatively strong, it has been demonstrated that solutions to these barriers can be found, and that grid integration of wind power becomes easier and less costly as the level of experience with this renewable resource increases. A key focus of the GEF’s wind power investments is to help countries understand the planning and operational requirements of wind power, gain experience with installation and grid integration issues, and employ policy options that promote wind energy development. Policy options can include incentives for electric transmission lines to facilitate delivery of electricity from wind facilities, renewable energy portfolio standards, capital subsidies, tax incentives, tradable energy certificates, feed-in tariffs, and grid access guarantees. The GEF has invested in 40 wind power projects in 38 countries by the end of 2009. After completion, Oaxaca, Mexico. these projects will result in the installation of almost 1 GW of wind power capacity (Figure 1). The GEF has invested $252 million and leveraged $1.9 billion of cofinancing for wind power projects. 20 THE GLOBAL ENVIROMENT FACILITY Project Description and establish a green development fund. These initiatives were the result of the country’s “Action GEF investments in wind power in Mexico Plan for Removing Barriers to the Full-Scale involve a number of projects including the Implementation of Wind Power in Mexico.� construction of a 103 MW wind farm at La Venta III on the Isthmus of Tehuantepec in Oaxaca. Also launched following the Action Plan was This region possesses some of the best wind the Regional Wind Technology Centre (Centro energy resources in Mexico. Average annual wind Regional de Tecnología Eólica) which was created speeds range from 7 meters per second to 10 to support wind turbine manufacturers, train local meters per second, measured 30 meters above technicians, and facilitate cooperation between the ground. Overall, Mexico is one of the most wind turbine manufacturers and other Mexican promising areas for wind energy development industries. The reduction of barriers and creation in Latin America and possesses an estimated of incentives from the Action Plan led to the 40 GW in untapped potential. Approximately construction of the La Venta II wind project which 10% of this potential comes from the Isthmus of became operational in 2007 with an installed Tehuantepec, where the quality of the renewable capacity of 83.5 MW. resource is expected to result in capacity factors of at least 40% for wind power facilities. Such Also in 2007, a second GEF wind power project factors are 10 to 20% higher than typical values got underway. The World Bank used $24.4 million from other facilities. in GEF funding and leveraged $247.5 million from the Government of Mexico to support a Despite the significant potential for wind tariff structure for a major new wind installation, power development, progress has been slow La Venta III. Construction on La Venta III began in Mexico by global standards. This is due both in 2009 and will have an installed capacity of to lack of adequate financial incentives for about 103 MW when completed. This project will private development and investment, as well as generate local expertise in commercially-based, issues with the existing policies and regulations grid-connected renewable energy applications, affecting wind power. The GEF wind projects enhance experience with independent power in Mexico have been successful in stimulating production, and build institutional capacity to development and showing consistent progress value, acquire, and manage such resources on a starting with policies for capacity building replicable basis. and creation of a more favorable climate for development, continuing with innovative A third GEF wind power project is getting initiatives for local manufacturing of wind underway in 2010 to build on previous turbines, systems, and components, and resulting experiences and provide support for expanded in the construction of wind power facilities. This wind power development in Mexico. This progress provides lessons learned about best technology transfer project will support the practices that can be replicated elsewhere in production of wind power goods and services at Mexico and other countries in the developing the national level, and build human and technical world. capabilities for the manufacturing, testing and certification of wind turbines. This project GEF efforts began in 2004 to 2009 when Mexico’s will be implemented by the Inter-American Electrical Research Institute and UNDP applied Development Bank (IDB) and includes $5.5 $4.7 million in GEF funds and $7.1 million million of GEF financing leveraged with $18.6 cofinancing to accelerate the depreciation of million in cofinancing. This project is expected to investments in renewable energy; assess wind run until 2014. resources; initiate proposals on more favorable legal, regulatory, and institutional frameworks; TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 21 FIGUrE 1: GEF rENEWABLE ENErGy PrOjECTS, INCLUDING WIND ENErGy, ArOUND THE WOrLD Need a caption here. Technology Description The estimated installed costs for wind power projects on the Isthmus of Tehuantepec is La Venta III involves the first independent power estimated to be about $2,000 per KW and the production contract for wind power in Mexico. levelized cost of electricity over a 20-year period To deliver power from La Venta III to market, the is estimated to be about $0.065 per KW-hour. Mexican Federal Electricity Commission (CFE) is constructing a 400 kilovolt, 300 kilometer Wind power is market ready for application electrical transmission line. in other locations in Mexico. The successful performance of the La Venta III project will CFE issued a competitive request-for-proposals reduce technical and financial risks for project to supply the wind turbines for the La Venta III developers and enable other independent power project. Iberdrola Renovables was awarded a production projects for wind power to move 20-year power supply contract. La Venta III will forward in Mexico and in other countries around use 121 wind turbines manufactured by Gamesa the world. Eólica, each measuring about 44 meters high and 0.85 MW in nameplate capacity. The capacity factors for these turbines are expected to be about 42% on average over the 20-year contract. 22 THE GLOBAL ENVIROMENT FACILITY Results and Outcomes market. There are other projects planned which could bring Mexico’s total wind power capacity to The GEF wind power projects in Mexico have about 2.5 GW by the end of 2012. produced concrete results. The projects have followed a logical progression from support If these plans come to fruition, the GEF support for building favorable policies and market will have made a significant contribution in the environments to construction and operation of 25-fold increase in wind power in Mexico over the major facilities. While getting underway now, last 10 years. This level of technology transfer can the independent power contract for La venta be replicated in other countries if similar projects III with Iberdrola Renovables will soon provide can be identified and financed. Key factors 103 MW of wind power capacity, generate up to for replicating the Mexican success include 370 GW-hours of electricity annually, and result availability of high quality wind resources, and in GHG reductions of about 247,000 tonnes of the commitment of the local or national power CO2 annually, which equates to about five million company to the construction of high voltage tonnes CO2 over the 20-year term length of the power transmission lines to deliver electricity contract. from where the wind power projects are located to the load centers where the power is needed. The GEF projects have contributed to building confidence in wind power in Mexico—resulting in It is expected that continuing experience with other wind project development. For example, a wind power systems will reduce barriers to grid total of five major wind power projects providing integration and that manufacturing scale up about 207 MW of capacity may be commissioned will continue to result in reductions in installed in 2010, including locations in Baja California costs of wind power plants and in the cost of and Tamaulipas. In addition, another five wind electricity from those plants, depending on projects totaling about 500 MW are expected the quality of the wind resources and resulting to begin construction in 2011. When complete, capacity factors. Coupled with policies favorable these projects along with the GEF and non-GEF to wind under consideration in many countries, projects at La Venta will bring Mexico’s total wind projects are expected to become more wind power capacity to more than one GW. financially attractive to the financial community CFE is planning other electric transmission line and continue rapid growth. construction projects to bring the wind power to A key focus of the GEF’s wind power investments is to help countries understand the planning and operational requirements of wind power, gain experience with installation and grid integration issues, and employ policy options that promote wind energy development. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 23 Fuel cell buses provided services in the 2008 Beijing Olympics as part of the GEF technology demonstration project. 24 THE GLOBAL ENVIROMENT FACILITY Fuel cell Buses in china Introduction Urbanization is an important global trend with significant implications for energy and GHG emissions. According to the IPCC Fourth Assessment Report, about 75% of people in the industrialized world and about 40% of the people in the developing world now live in cities. In addition, the cities themselves are growing larger with at least 19 having more than 10 million people (IPCC 2007). Urbanization trends typically hit developing countries hardest and exacerbate on-going problems with air pollution, oil consumption and reliance on imports, and GHG emissions. In addition, urbanization will continue to be a primary driver for local investment in mass transportation and other infrastructure projects including roads, bridges, tunnels, garages, and pollution abatement equipment. The GEF has supported sustainable urban transport projects since 1999, including investments in 45 projects world by the end of GEF-4 in June 2010. These projects received $249 million from the GEF and approximately $2.5 billion in cofinancing. GEF efforts currently reach over 70 cities with a combined population of more than 250 million people. The project portfolio includes both technology development and transportation strategies such as “stand alone� investments in public transportation infrastructures, or comprehensive urban transportation plans (Figure 2). For example, in technology development, the GEF has invested in FCB projects in China and Brazil and hybrid bus and three-wheeler projects in India and Egypt (GEF 2009d). TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 25 figure 2: gef susTainaBle Project Description urBan TransPOrT FCBs are important clean energy technologies inVesTMenTs By PrOJecT that are nearing commercial readiness but TyPe that need demonstration projects to verify performance, assess potential, and determine needs for co-located hydrogen supplies and fueling infrastructure. FCBs are considered to be 120 more feasible near term than other types of fuel 100 cell vehicles because buses normally operate 80 on fixed routes with fixed schedules, and rely on $ Millions centralized infrastructure, including the provision 60 of training for engineering, maintenance, and 40 support personnel. 20 0 With a national vision and roadmap for hydrogen GEF - 2 GEF - 3 GEF - 4 energy development, and major problems in urbanization and mass transportation, Technological options China provides an important opportunity for Stand-alone investments demonstrating FCBs. The FCB projects in Beijing Comprehensive strategy and Shanghai aim to provide early adopters of FCBs with important information on technology performance and costs, as well as maintenance issues and consumer acceptance. The projects involve $11.6 million of GEF funds and $23 The GEF’s urban transport project portfolio million in cofinancing. UNDP is assisting with the grew from $30 million in GEF-2 to almost $120 implementation of the projects. million in GEF-4, constituting the world’s largest investment in environmentally sound urban China’s commitment to these projects stems transportation. While significant, these funds from the growing sustainability challenges faced represent a relatively small down payment by the country. For example, China’s economic on the global investment that is needed for growth has sparked an increase in automotive cleaner and more modern and sustainable fleets. Vehicle sales in China grew from 2.1 urban transportation systems. As a result, urban million units in 2000 to 5.8 million in 2005 and transport is expected to play an important role in 13.6 million in 2009 (Sullivan 2010). In Beijing and the GEF-5 portfolio of climate change projects. Shanghai, public buses are major contributors to air pollution due to the large fleets, high engine To leverage the GEF investments effectively, power, large fuel consumption, long daily running technology transfer efforts need to encompass distances, and congested roads. For example, projects that lead to stronger urban transport in Beijing in 2005 there were more than 18,000 plans as well as projects that involve new buses in service, of which 8,026 were diesel- technologies that may not be market-ready but fueled. In Shanghai in 2005 there were also more need to be demonstrated to verify performance than 18,000 buses in service, of which more than and attract private investment. 10,000 operated on diesel(Ministry of Finance 2010). 26 THE GLOBAL ENVIROMENT FACILITY Since the project’s inception, Chinese officials Technology Description from the Ministry of Science and Technology (MOST), Beijing and Shanghai local governments, The technologies for the projects include both Tsinghua University, and domestic and the FCB and the hydrogen fueling infrastructure. international private companies participated These systems are not generally commercially as key stakeholders in the projects. The overall available except for limited deployment in objectives of the project are to: demonstration projects. There is still a high level of risk related to the costs and performance n Begin the process of demonstrating the of fuel cell vehicles particularly under the feasibility and effectiveness of FCBs in rigorous conditions presented by large buses urban transport applications in China; serving urban mass transportation markets. While a proven technology, fuel cell costs are n Verify reductions in air pollution and GHG still prohibitive compared to other vehicle emissions that result from the operation propulsion systems, including non-traditional of the FCBs, alternatives such as compressed natural gas and hybrid electric buses. In addition, the fueling n Demonstrate the operational infrastructure for supplying hydrogen requires its performance of FCBs and their refueling own production, storage, and dispensing facilities infrastructure under Chinese conditions; and these costs need to be factored into the and overall effort. n Stimulate manufacturers to scale-up The manufacturers, demonstration schedules, production and bring down costs and locations for the FCBs projects are shown in the table on the next page. Planning was conducted prior to project inception and identified four phases: (1) The Citaro, manufactured by Daimler-Chrysler Feasibility Studies, (2) Demonstrations, (3) uses a proton-exchange-membrane (PEM) Expanded Demonstrations, and (4) Mass- fuel cell involving a 205 KW fuel cell stack production. The first phase, which took place manufactured by Ballard Power Systems, Inc., and from 1998 to 2001, involved research, data an alternative current induction motor. The Citaro collection, and analysis by Chinese experts to uses nine hydrogen storage tanks manufactured provide a basis for the design of the overall by Dynetek Industries, Ltd. Each tank can hold up project. The feasibility studies showed that since to 40 kilograms of hydrogen at a storage pressure the 1990s significant progress had been made of 350 bars. in hydrogen energy production and storage and fuel cell vehicle technologies in many countries The next batch of three FCBs was manufactured including China. The second phase began in 2002 by China’s Beiqi Foton Motor Company with and is expected to be completed in 2011. As funding from MOST and technical assistance part of this phase, the public transport companies provided by the GEF. During this part of the of Beijing and Shanghai each obtained and put projects, these FCBs provided service in the 2008 into operation six FCBs. This phase also includes Beijing Olympic Games as one of the technology capacity building activities to strengthen the showcase projects. The final six FCBs used hybrid basis for proceeding to the third phase, which is fuel cell systems, manufactured by Shanghai expected to take place from 2012 to 2020 and Automotive Industry Corporation (SAIC). They involve a larger FCB demonstration effort in other have been purchased for demonstration and Chinese cities.6 operation at the World Expo in Shanghai in 2010. These six FCBs provided true zero-emission service for visitors shuttled along the main bus route at the World Expo. 6 The third and fourth phases have not begun and are not expected to involve GEF. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 27 TaBle 2: fcB PrOJecT infOrMaTiOn Manufacturer Number of FCBs Schedule Location DaimlerChrysler-Citaro 3 June 2006–October 2007 Beijing Beiqi Foton Motor Company 3 August 2008–July 2009 Beijing Shanghai Automotive Industry Association 6 February 2010–present Shanghai (SAIC) Hydrogen fueling infrastructure is a key aspect The Foton FCBs operated in Beijing from August of this project, resulting in construction and 2008 to July 2009, traveled 75,460 kilometers, and operation of China’s first hydrogen fueling carried 60,198 passengers. These FCBs operated station. With the cooperation of SinoHytec, for 3,646 hours and consumed 5,753 kilograms BP, and Tsinghua Tong Fang Corp., the Beijing of hydrogen at a consumption rate of about 9.56 hydrogen fueling station was built inside Beijing kilograms per 100 kilometers traveled. Operating New Energy Vehicle Demonstration Park, statistics on the SAIC FCBs are not available as of located in Yongfeng High Technology Economic November 2010. Development Zone approximately 10 kilometers west of the Olympic Stadium. The station began Operation of all 12 FCBs is expected to avoid service in November 2006 with hydrogen supplies about 1,010 tonnes of CO2 emissions. If the from an external natural gas reformer. FCBs are adopted by 30% of China’s municipal The facility has the capacity to fuel eight to ten bus fleet by 2030, then 9.3 million tonnes of CO2 buses with hydrogen at a time, three to four times emissions can be avoided annually. per week. This fueling station served the three Citaro FCBs demonstrated in the Beijing project Going forward, the GEF will continue to look and provided valuable data for the construction for opportunities to support cost effective FCB and operation of a fueling station in Shanghai. projects that build on the lessons learned from Beijing and Shanghai, and other fuel cell and Expected Results and Outcomes hydrogen demonstrations worldwide. Research and development remains an important part of Data collected to date demonstrates that the the strategy for driving down costs and improving FCBs and fueling infrastructure have performed performance for fuel cells, and hydrogen successfully. For example, the three Citaro FCBs production, storage, delivery, and fueling operated in Beijing from June 2006 to October infrastructure. Demonstration projects are also 2007 as public buses running standard routes important to provide technology developers with with zero emissions and low levels of noise. The information on technology deployment problems FCBs traveled a total of 92,116 kilometers with and to inform research and development an 88% operation rate, operated for 5,699 hours, directions and priorities. and carried 56,973 passengers. The FCBs were not involved in any accidents or emergencies, and received favorable reviews from passengers and operators. 28 THE GLOBAL ENVIROMENT FACILITY A Hydrogen Fuel Cell shown here. Hydrogen fueling infrastructure is a key aspect of this project, resulting in construction and operation of China’s first hydrogen fueling station. The GEF FCB projects have contributed useful n Assess alternatives: Many types of information about the costs and performance clean energy systems are being of hydrogen fuel cells and fueling infrastructure demonstrated for sustainable urban in urban mass transportation applications. transport. The relative merits of FCBs and Through these demonstrations hundreds of these other systems need to be fully thousands of passengers have traveled on fuel assessed so that sustainable urban cell buses, thus introducing the technologies to transport projects meet the full needs of the public and raising awareness. The projects the urban community and the host have also supported China’s commitment to the country. development of hydrogen and fuel cell vehicles and their program to expand deployment of n Secure commitment: The level of FCBs. commitment by the Chinese government to hydrogen energy development In pursuing technology transfer opportunities has been a key factor. The level of for FCBs, several key lessons have emerged to national commitment will be an inform future efforts. For example: important consideration in identifying additional FCB projects in other n Understand investment needs: The countries. amount of investment needed to purchase FCBs, and to construct and operate the supporting hydrogen fueling infrastructure is substantial and a primary TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 29 Innovative Financing— hungary Energy Efficiency cofinancing Program Budapest, Hungary Introduction The GEF has been at the forefront of efforts to advance innovative financial instruments Energy efficiency is among the lowest cost that promote energy efficiency in developing approaches for saving energy and reducing GHG countries and economies in transition. emissions. The widespread adoption of financial Development, implementation, and evaluation of instruments for energy efficiency is essential these instruments address a major global need for expanding the adoption of energy efficient to stimulate their replication and sharing lessons technologies, tools, and techniques. GEF projects learned. to develop and transfer financial instruments for energy efficiency have been successfully Financial instrument projects represent implemented in many countries worldwide about 22% of the value of the GEF’s energy including Hungary, Bulgaria, Slovakia, Thailand, efficiency portfolio. Through these projects and China. These projects have resulted in the GEF provides essential financial tools and significant reductions in energy consumption and techniques—along with technical assistance and GHG emissions. training—for expanding deployment of energy efficient appliances and equipment in residential There are several general types of financial and commercial buildings and manufacturing and instruments that the GEF and others have used process industries worldwide. worldwide for energy efficiency investments. As was the case in Hungary, it is common to GEF efforts with financial instrument projects combine these instruments in various ways to suit are part of a portfolio that includes technology local conditions and needs. The types include: demonstrations and diffusion, standards and labeling, market-based approaches, and policy n Loans or loan guarantees through and regulatory development. commercial banks, special development agencies, or government funds; n Energy savings performance contracts through third party businesses known as energy services companies (ESCOs); and n Demand-side management programs through energy distribution companies that provide financing, incentives, and technical assistance. 30 THE GLOBAL ENVIROMENT FACILITY GEF has supported small and medium-sized enterprises in China and other developing countries to improve their energy efficiency and reduce GHG emissions. Project Description This project started in 1997 when Hungary’s financial sector was beginning to change, The Hungarian Energy Efficiency Cofinancing operate on a commercial basis, and able to begin Project (HEECP) built a sustainable commercial financing energy efficiency projects, particularly in lending sector in Hungary—in partnership with the SME sector. However, there were significant local financial institutions—for energy efficiency hurdles and the GEF project was essential for investments across a range of technologies, building basic capabilities, knowledge, and applications, and sectors. The project is a know-how. The GEF provided $5.7 million for useful example of GEF efforts to develop and this project with $113.2 million in cofinancing. transform project financing and markets for Project implementation was supported by the energy efficiency investments in countries and International Finance Corporation (IFC). economies in transition. Like other countries The HEECP was designed in two phases: in Eastern Europe, and the newly independent states of the former Soviet Union, Hungary n HEECP I: A $5 million pilot project operated under a centrally planned economy that that generated considerable interest a was shielded for decades from market forces and mong Hungarian financial institutions in thus developed institutions and infrastructure this market; and that were based on relatively low and subsidized energy prices. Without adequate market n HEECP II: Expansion of guarantees and signals, there were no economic incentives for technical assistance to support the energy efficiency and Hungarian lenders had financing of energy efficiency-related no experience offering and servicing energy projects. efficiency loans. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 31 Financed projects included investments in energy Under the GFAs, the lenders are responsible for efficient lighting, district heating, boiler and originating and structuring all of the transactions building control systems, motors, and industrial as well as performing the appropriate due process improvements. The program continues diligence and credit analysis. They are also today in a third phase, which started in 2005, responsible for managing the loans from start which is now merged with the Commercializing to finish and for pursuing collection remedies in Energy Efficiency Finance Program. the event of default. As the financial instrument provides for only partial guarantees, there was an The financial mechanism developed for HEECP incentive for the lenders to identify and originate involved two strategies for strengthening financially sound loans and pursue the most cost Hungarian commercial lending for energy effective energy efficiency project investments efficiency: (Taylor et al. 2008). Figure 3 provides a diagram which shows how the GFAs and TGAs were n Offering and servicing specialized organized through the lenders to loan recipients, financial products, and and how the financing was complemented by appropriate technical assistance and training. n Building local expertise in energy efficiency technologies, tools, and Initially, when the Hungarian energy efficiency techniques. financing market was in its early stages, the The main financial product included a partial loan HEECP partial loan guarantees were open to guarantee provided by the IFC to participating many different companies and organizations that Hungarian financial institutions. Capacity building might be able to use them to implement energy included technical assistance and training. efficiency projects. However, as experience was HEECP marked the first time that a partial loan gained, the preferred loan recipients were project guarantee financial instrument was used to developers (e.g., vendors, leasing companies, facilitate commercial energy efficiency lending, a ESCOs, and SMEs) as these were the entities in strategy that has since been refined and applied the best position to aggregate small projects into in other GEF and IFC projects worldwide (Taylor larger ones, and most able to use the technical et al. 2008). assistance and training that was provided. Implementation of the financial instrument involved development of specialized institutions, contract mechanisms, and agreements in a unique configuration. Under HEECP, the GEF and IFC issued Guarantee Facility Agreements (GFAs) for energy efficiency investments with Hungarian lenders. As each investment transaction was initiated by the lender with a loan recipient, the GEF and IFC issued a Transaction Guarantee Agreement (TGA) for each eligible transaction undertaken whether the recipient was an end user, vendor, ESCO, or teams involving all three. 32 THE GLOBAL ENVIROMENT FACILITY Experts meet to discuss innovative carbon financing options with the GEF. figure 3: heecP PrOgraM sTrucTure Investment $ Grant $ IFC IFC IFC/GEF IFC/GEF GEF GEF Guarantee Facility Transaction Agreement Guarantees LOCAL Technical FINANCIAL Assistance INSTITUTION EE Project Loans Vendor End User ESCO Lease Energy Service Agreements End User End User Source: Taylor et al. 2008 TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 33 Results and Outcomes Reductions in GHG emissions from HEECP were estimated to be about 2.6 million tonnes of CO2 The expected outcomes of HEECP included: equivalent over the lifetime of the project. Analysis shows that HEECP’s initial six years n Reductions in capital costs for new (1997–2003) involved a relatively slow start-up as electric transmission and distribution lenders, loan recipients, and services providers systems due to reductions in demand; absorbed the provided technical assistance, gained familiarity with the new financial n Decreases in the country’s reliance on instruments, and learned how to conduct imported energy due to reduction in the feasibility studies/audits cost-effectively to use of oil and natural gas; and identify the most promising and profitable energy efficiency projects. n Improvements in living standards, the competitiveness of the SME sector, From 2003 to 2006, HEECP entered a period municipal budgets due to reductions in where the level of loans and projects expanded energy costs. rapidly. Figure 4 shows these results, illustrating a significant change towards self-sustaining energy efficiency markets in Hungary (Taylor et al. 2008). As time went on, increasingly fewer of the figure 4: heecP resulTs frOM 1997 TO 2006 60,000 50,000 US$ Thousands 40,000 30,000 20,000 10,000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 EE investment triggered Loans with IFC guarantees IFC guarantees committed Source: Taylor et al. 2008 34 THE GLOBAL ENVIROMENT FACILITY With GEF support, this cement company con- structed the first of its kind fuel-free power plant in China using waste heat from cement kilns. energy efficiency loans relied on the partial loan n If a nation or region does not have well guarantees. In fact, as greater experience was developed financial institutions or gained among lenders and recipients regarding technical capabilities and energy the terms, risks, and cost/revenue streams from efficiency expertise, it will take time energy efficiency investments, opportunities and patience to build the capacity for financing projects based on cash-flow alone needed for a robust market to emerge. increased. This enabled financing through the Lead times on the order of 6 months to partial loan guarantees to focus on potentially 2 years should be expected for viable profitable market opportunities that might financial instruments to be developed otherwise have been ignored. Beneficiaries of and deployed. this trend included block-house renovation, combined heat and power, district heating, and n For loan guarantee mechanisms to have street lighting projects (Taylor et al. 2008). their greatest chance for success, they In transferring financial instruments for energy need to be implemented in commercial efficiency to other nations and regions, key banking sectors that have adequate lessons should be addressed to ensure best liquidity, attractive interest rates, practices are replicated. For example: competition, and reasonably mature financial institutions that are willing to n Loan guarantees alone cannot solve take risks. systemic banking or credit problems but together with technical assistance and Going forward, the GEF will continue to invest training they can successfully mobilize in projects that create new financial instruments local lenders and private developers such for energy efficiency. GEF assistance will be as leasing agents and ESCOs. particularly important in those countries that lack both well-developed commercial lending sectors and companies with experience with energy efficiency projects. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 35 Advising communities on sustainable livestock and rangeland management practices that will be readily replicated elsewhere is a priority portfolio project. BOX 2: aDaPTiOn acTiOns—A TOP GEF PrIOrITy Since the creation of the Strategic Priority on Adaptation in the GEF Trust Fund, and the establishment of the Least Developed Countries Fund (LDCF) and the Special Climate Change Fund (SCCF), GEF investments in adaptation projects have totaled about $313 million. While technology transfer has been a major component in most adaptation projects, there is less experience with successful cases compared to other GEF projects in ESTs as the adaptation portfolio is relatively new. The portfolio of projects includes investments in a variety of adaptation technologies, tools, and techniques. For example, there have been projects for wetland and/or mangrove restoration, beach nourishment, innovative irrigation systems, drought-resistant crops, enhancing climate resilient infrastructure, and the physical transfer of high-tech electronics for data logging and alert systems. In addition, many of the adaptation projects have included techniques for the improved management of local practices. As a result, capacity building, public awareness, and support for “mainstreaming� adaptation strategies in local economic development, land-use, and environmental planning have been important components of many projects. Some technology transfer examples from the adaptation portfolio include the following: n In Sierra Leone, 15 automatic weather stations and 20 regional rain gauges are being installed to revitalize the meteorological system which was severely damaged during the civil war. To operate these systems, post-graduate training will be provided for two senior meteorologists and several supporting technical staff. Weather analysis and forecasting is an essential tool for supporting local climate change adaptation decision making for projects in agriculture and water resource management. n In Colombia, advanced climate and statistical models allow continuous evaluation of the effects of global climate change on dengue and malaria transmission. With technical assistance the models can be customized for other nations to help guide appropriate preventive actions. n In Cape Verde, a country expected to experience severe climate change-related water stress, demonstration of climate- resilient techniques for harvesting, storing, conserving, and distributing water is being implemented. The technologies for this project include wind traps, underground screens that prevent groundwater seepage, and new water treatment techniques that will be applicable in other locations. n In West Africa, use of alternative fuels in communities that previously collected firewood from sensitive coastal mangrove forests is underway. Use of fuels other than firewood reduces human pressure on the mangrove forests, which serve as a natural buffer against the effects of rising sea levels and storm surges, and can be an appropriate remedy in other places. n In Bhutan, measures to reduce the risks of glacial lake outburst floods created by receding glaciers are underway. This project involves installing pumps to artificially lower lake levels below dangerous thresholds, and installing automated monitoring and alarm systems which will be applied for similar purposes in other regions. n In Eritrea, agricultural extension personnel are being trained in climate-resilient rangeland management techniques. This project provides expertise and capabilities for advising communities on sustainable livestock and rangeland management practices that will be readily replicated elsewhere. Effective technology transfer relies on the open exchange of information about projects such as these to help build awareness and experience for successful scale-up of activities to national and regional levels (GEF 2008, GEF 2009a). 36 THE GLOBAL ENVIROMENT FACILITY TaBle 3 . eleMenTs Of aDaPTaTiOn TechnOlOgy Transfer in ecOsysTeMs, agriculTure, waTer ManageMenT, cOasTal zOne ManageMenT, DisasTer risk ManageMenT, anD huMan healTh Ecosystems Agriculture Water Coastal Zone Disaster Risk Health Management Management Management Technology Pest management Improved seasonal Demonstration of Planting / Improvement of Climate and information technologies forecasts and small-scale conservation of drought early statistical transfer introduced into improved access innovative protective warning models sustainable forest to seasonal climate techniques for mangroves (Sri systems and developed to management to information for climate-resilient Lanka) coordination of monitor and combat severe farmers through harvest, storage, food and forage track the effects pest problems extension services conservation, banks (Burkina of climate caused by (Niger) and distribution Faso) on malaria decreasing rainfall of water (Cape and dengue. (Armenia) Verde) (Colombia) Infrastructure Dissemination of Promotion and Upgrade of Installation of Reduced risks and hard alternative energy dissemination of irrigation breakwater/ of glacial lake technologies technology to drought-tolerant facilities to sea walls at key outburst reduce human crop varieties promote efficient vulnerable floods (GLOFs) stresses on and technology; usage of coastal locations through artificial important knowledge for available (Pacific Islands) lowering of mangrove improved dry- land water resources lake levels and ecosystems, farming (such (Malawi) automated previously used as dry seeding, monitoring/ for firewood minimum tillage, warning system collection (West etc.) (China) (Bhutan) Africa) Capacity Updating of Training of Development and Improvements Increased Increased building, coastal adaptation implementation in human and coverage of capacity and coordination, zoning and experts for of integrated technical existing understanding and policy fisheries agricultural water capacity early warning among local management extension services management (such as GIS system and health based on detailed (Eritrea) frameworks technology) improved flow professionals analysis of saline for rational for monitoring of early warning through pilot front changes prioritization of and responding information to implementation induced by climate limited resources to coastal vulnerable of preventive and change (Uruguay) (Ecuador) erosion (West coastal responsive public Africa) communities health programs (Bangladesh) specifically targeting climate change- induced illnesses (Samoa) TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 37 With GEF support, Xinggao Coking Group in Shanxi, China has successfully demonstrated the state-of-the-art clean cok- ing technology, while recover- ing waste heat from the coke ovens for power generation. gEF’S Role in Technology Transfer common Features and Lessons n Understand and address barriers: Pilot projects and demonstrations could Learned of Successful EST Transfer be one of the most tangible ways The case studies analyzed in this document to address barriers to technology articulate the process of technology transfer for transfer, by showing how and where ESTs each EST, and highlighted the crucial role the could be implemented. The Bangladesh GEF has played at different stages. Some of the brick making project addresses some common features of successful EST transfer and of the common technical, capacity, and lessons learned include the following: commercialization barriers to brick making, by replicating activities that n Target the GEF support for have been successfully demonstrated in transformational effects: The case other Asian countries with GEF support. studies demonstrate that GEF financing The innovative Hungarian financial for technical assistance and for project addressed institutional and investment support is a crucial tool to economic barriers associated with limited enable counties to try innovative pilot economic incentives for energy efficiency project designs and to partially off-set the and lack of experiences in offering and high initial transaction costs of activities, servicing energy efficiency loans. There and to defray initial risks (Taylor et al. is also a need for realistic baseline 2008). Such targeted support is consistent assessments and identification of options with the principle of incremental cost, to address barriers that could be in which the GEF support is used to reasonably implemented within the transform a project with national benefits project timeframe. into one with global environmental benefits, by providing targeted financing to cover the cost differential to make a project more environmentally sound. 38 THE GLOBAL ENVIROMENT FACILITY n Obtain the commitment and sustained technology system may require long- buy-in of partners: All case studies term, capital-intensive commitments, featured a strong and sustained with path dependency. For instance, commitment of local and national it is necessary to assess multiple clean partners to plan, implement, and manage energy systems available for sustainable various activity components. The urban transport before making the featured case studies were implemented decision to commit to one type. in multiple phases or over a long period of time, underscoring the n Sustain a comprehensive approach: importance of sustained buy-in of Technology transfer does not happen in a the partners. The level of commitment vacuum, by just making the equipment is an important criterion in identifying available. Similarly, financing alone additional projects to replicate successful cannot solve systemic problems that EST transfer. impact access to technologies. Successful projects featured multiple n Engage the private sector: Each reinforcing components to support case study featured diverse styles of viability of EST transfer under local private sector engagement, as conditions. These components included: manufacturers of technologies being policy support, such as standards for piloted, as design and construction renewable energy portfolio and grid contractors, as EST adopters in the access guarantees; incentives such as manufacturing process, and as providers investment support, tradable energy of financial services. Each project also certificates, production credits, and assessed and improved policy-relevant feed-in tariffs; market environment and technical conditions to enable building; and capacity and institutional private sector engagement. Successful building at the national, sectoral, and projects also had a clear business model firm levels. from the outset. The above findings are consistent with a n Understand the relative merits of recent independent evaluation of low carbon technology options: The projects development projects by the World Bank, which featured in the case studies provided found that the GEF support has been crucial in extensive data and a wealth of piloting technology transfer to mitigate clients’ experience needed to better- perceived risks (World Bank 2010). The evaluation define the advantages and disadvantages also found that successful projects have of demonstrated ESTs. In order to make supported the transfer and adaptation to local the case for EST replication and conditions of existing technologies, policies, and investments, the relative merits of financial practices. available options need to be further assessed. They may have different financial, environmental, socio-economic, geographical, and infrastructure-related attributes, capacity needs, and policy- and institutional requirements for their successful transfer. Decisions to replicate/mainstream a particular TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 39 With GEF support, Xinggao Coking Group in Shanxi, China has success- fully demonstrated the state-of-the-art clean coking technology, while Need a caption from recovering waste heat here. the coke ovens for power generation. gEF-5 Outlook The GEF strategy enables the recipient countries to access the GEF support on a wide range The GEF-5 climate change mitigation charts of areas, including energy efficiency in the a course to promote a broad portfolio of industrial and building sectors, renewable energy environmentally sound, climate-friendly technologies, low-carbon transport and urban technologies with potential to achieve significant systems, and innovation support. In addition, GHG reductions in GEF-recipient countries GEF-5 includes the promotion of conservation in accordance with national circumstances, as and enhancement of carbon stocks through introduced earlier in this document. The GEF sustainable management of LULUCF as well and promotes technology transfer at various stages of carbon finance, as well as carbon finance (Boxes technology development in the innovation chain, 3 and 4). from demonstration of innovative, emerging, low- carbon technologies to diffusion of commercially The GEF stands ready to facilitate the transfer proven, ESTs and practices. of a wide range of ESTs to a larger number of countries and stakeholders, by catalyzing additional investments, in order to achieve its overall goal to support developing countries and economies as they transition towards a low-carbon development path. It is hoped that the case studies featured in this publication will inspire additional countries to move toward enhanced use of these low-carbon technologies. 40 THE GLOBAL ENVIROMENT FACILITY BOX 3: enhanceD lanD ManageMenT anD use fOr cliMaTe MiTigaTiOn On a global scale, deforestation contributes 15-20% of GHG emissions, more than the world’s entire transport sector. GEF-5 features a program to reduce GHG emissions across the LULUCF landscape. Land uses can be broadly categorized such as those for reporting national inventories under UNFCCC: forest land, cropland, grassland, wetlands (peat lands), settlements, and other lands. Land use changes and land use can emit greenhouse gases or sequester carbon, and management can reduce expected emissions or increase sequestration which contributed to climate change mitigation. Reducing deforestation and wetland degradation are especially effective approaches for reducing GHG emissions. LULUCF objectives are to: (1) conserve, restore, enhance, and manage the carbon stocks in forest and non-forest lands, and, (2) prevent emissions of the carbon stocks to the atmosphere through the reduction of the pressure on these lands in the wider landscape. Success will be measured by the number of hectares of forest and non-forest lands restored and enhanced, tonnes of CO2 equivalent avoided and sequestered, and number of countries adopting good management practices. Carbon stock monitoring systems are also critical for measuring progress. Enhanced carbon stocks and sequestration across the landscape, and decreased deforestation due to LULUCF projects creates synergies that result in climate change mitigation, as well as other global environmental benefits including the protection of biodiversity, and combating land degradation to improve people’s lives. The LULUCF program supports the GEF-5 Sustainable Forest Management/Reducing Emissions from Deforestation and Degradation plus (SFM/REDD plus) incentive mechanism which allows GEF projects to access additional funds for forest management to be fully responsive to the guidance provided by the UNFCCC, Convention on Biological Diversity, and the United Nations Convention to Combat Desertification. Because forests can be a source of biomass for energy production, LULUCF activities can result in additional synergies within the GEF climate change focal area including management to enhance forest carbon stocks made possible by reducing forest use through renewable energy technology investments and market transformations for energy efficiency such as more efficient cook stoves. Potential innovative technology transfer activities in LULUCF include improvements in charcoal production technologies and reduction in charcoal use. Charcoal is one of the most important energy resources in Africa and is a major source of pollution and greenhouse gas emissions in cities where urbanization pressures are a growing problem. Charcoal production is not very efficient; about 90% of the carbon is emitted before the remaining 10% is delivered as charcoal. Wood production by afforestation and improved forest management techniques, coupled with improvements in charcoal production efficiency, would have significant global impact. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 41 BOX 4: carBOn finance–new OPTiOns TO eXPlOre The GEF is uniquely positioned to play a role in carbon markets given its extensive network of partner institutions, its rich experience in financing and facilitating the transfer of environmentally sound technologies, and its strong track record in reducing GHG emissions cost-effectively from its investments. In fact, GEF’s early intervention in many cases—be it demonstrating technologies for landfill gas and coal bed methane utilization or putting policy and regulatory frameworks in place to stimulate investment in renewable energy—has laid the foundation for carbon markets to function and replicate subsequently. In fact, the GEF has supported several, innovative projects promoting carbon finance. For example, a project in India for the deployment of more energy efficient chillers has just been started with the World Bank and showcases an innovative financial mechanism that could be applied in other countries. The objective of this project is to accelerate the replacement of traditional centrifugal chillers with energy efficient, non-chlorofluorocarbon (CFC)-based centrifugal chillers through the provision of financial incentives. This project has mobilized cofinancing of approximately $77 million with GEF support of $6.3 million. The project’s financial incentive consists of an upfront payment (about 20% of the equipment standardized cost) to subsidize the cost of the replacement of the centrifugal chillers before the end of their useful lives. Carbon credits from the 215 chillers that will receive incentive payments under this project will then be transferred to provide additional resources to support replacement of an additional 155 chillers. This concept works like a revolving fund where carbon emission reduction revenue streams from initial replaced units are used to replace additional units. The goal is to replace 370 chillers, with expected greenhouse gas reductions of about four million tonnes CO2 equivalent, including global warming potential of CFCs. The cost-effectiveness of the GEF contribution comes to approximately $1.6/tonne of CO2 equivalent. Without GEF’s assistance to address the barriers for chiller replacement and allowing up-front financing arrangements, this project could have been a non-starter, given that the Clean Development Mechanism by itself will not be able to overcome the barriers due to: (1) high opportunity costs; (2) perceived technology risks regarding energy efficiency permanency under the environment conditions prevailing in India; (3) lack of awareness of potential savings that could be rendered by the new technology; and (4) competing investment priorities. Without the GEF funds to accelerate chiller replacement, CFC demand would have continued in the domestic market and thereby potentially triggering an illegal market for CFCs. The Chiller Energy Efficiency Program supported by the GEF involves the use of a financial intermediary (Industrial Development bank of India) to aggregate eligible chiller replacements and reduce transaction costs for chiller owners which enables small projects to more easily participate in carbon finance markets. This methodology has been approved by the Clean Development Mechanism Executive Board and represents one of the first examples worldwide of a programmatic, rather than a case-by-case, approach to carbon finance markets. Taking advantage of carbon finance market opportunities will be an important target for GEF-5 projects. Options to be explored include: n Capacity building to help create enabling legal and regulatory frameworks; n Support for programmatic carbon finance and other activities under the post-2012 climate regime; n Demonstration of technical and financial viabilities of technologies; n Provision of partial risk guarantees and contingent financing for carbon finance projects; and n Cofinancing of innovative projects, with credits to be retained in the recipient country for further project replication. 42 THE GLOBAL ENVIROMENT FACILITY Without GEF’s funds to accelerate chiller replacement, CFC demand would have continued in the domestic market and thereby potentially triggering an illegal market for CFCs in India. These children above make charcoal illegally, using trees from protected area systems of rwanda. Charoal production is not very efficient: about 90% of the carbon is emitted before the remaining 10% is delivered as charcoal. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 43 ABBREVIATIONS AND AcRONYMS BTK Bull’s Trench Kiln BUET Bangladesh University of Engineering and Technology CFC Chlorofluorocarbon CFE Federal Electricity Commission (Mexico) COP Conference of the Parties CSP Concentrating Solar Power EGTT Expert Group on Technology Transfer ESCO Energy Services Company EST Environmentally Sound Technology FCB Fuel Cell Bus FCK Fixed Chimney Kiln GEF Global Environment Facility GFA Guarantee Facility Agreement GHG Greenhouse Gas GHK Gas Hoffman Kiln HEECP Hungarian Energy Efficiency Cofinancing Project HHK Hybrid Hoffman Kiln IDB Inter-American Development Bank IFC International Finance Corporation IPCC Intergovernmental Panel on Climate Change LDCF Least Developed Countries Fund LULUCF Land Use, Land Use Change, Forestry MOST Ministry of Science and Technology (China) NGO Non-Governmental Organization NREA National Renewable Energy Agency (Egypt) NREL National Renewable Energy Laboratory (United States of America) PEM Proton Exchange Membrane SAIC Shanghai Automotive Industry Association SBSTA Subsidiary Body for Scientific and Technological Advice SCCF Special Climate Change Fund SFM/REDD Sustainable Forest Management/Reducing Emissions from Deforestation and Degradation SME Small and Medium Enterprise STRM Short Term Response Measures TNA Technology Needs Assessment TGA Transaction Guarantee Agreement UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change UNIDO United Nations Industrial Development Organization Units of Measure Acre 4,047 m2 GW Gigawatt MW Megawatt KW Kilowatt 44 THE GLOBAL ENVIROMENT FACILITY REFERENcES Global Environment Facility (GEF). 1995. “GEF Operational Strategy.� Washington, DC: GEF. Global Environment Facility (GEF). 2008. “Transfer of Environmentally Sound Technologies – The GEF Experience.� Washington, DC: GEF. Global Environment Facility (GEF). 2009a. “Financing Adaptation Action.� Washington, DC: GEF. Global Environment Facility (GEF). 2009b. “Investing in Energy Efficiency – The GEF Experience� Washington, DC: GEF. Global Environment Facility (GEF). 2009c. “Investing in Renewable Energy – The GEF experience.� Washington, DC: GEF. Global Environment Facility (GEF). 2009d. “Investing in Sustainable Urban Transport – The GEF Experience.� Washington, DC: GEF. Global Environment Facility (GEF). 2010. “Greening Opportunities at World Events – The GEF Experiences.� Washington, DC: GEF. Intergovernmental Panel on Climate Change (IPCC). 2007. Fourth Assessment Report. Working Group III Report “Mitigation of Climate Change� Ministry of Finance. 2010. “GEF in China.� People’s Republic of China Sullivan, K. 2010. China’s Retail Auto Market. “China Business Review July-August 2010.� Taylor, R. Govindaraji, C., Levin, J., Meyer, A., and Ward, W. 2008. “Financing Energy Efficiency.� Washington, DC: World Bank. World Bank. 2010. “Phase II: The Challenge of Low-Carbon Development. Climate Change and the World Bank Group.� Independent Evaluation Group Study Series. Washington, DC: World Bank World Bank. 2006. “Assessment of the World bank/GEF Strategy for the Market Development of Concentrating Solar Thermal Power.� Washington, DC: World Bank. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 45 PhOTOgRAPhY cREDITS PhOTOgRAPhY cREDITS Cover Danielo victoriano, Page 30 Top photo Istockphoto GEF photo contest 2009 Page 30 Bottom: Global Environment Inside Cover Chinese Ministry of Agriculture Facility Page 2 Istockphoto Page 31 Global Environment Facility Page 5 UNIDO Page 33 Global Environment Facility Page 7 World Bank Photo Library Page 35 Global Environment Facility Page 8 Istockphoto Page 33 Chinese Ministry of Agriculture Page 10 Istockphoto Page 35 Chinese Ministry of Agriculture Page 13 McKay Savage Page 37 Top: World Bank Photo Library Page 15 Chinese Ministry of Agriculture Page 37 Bottom: Page 16 Chinese Ministry of Agriculture Chinese Ministry of Agriculture Page 17 Chinese Ministry of Agriculture Page 38 Chinese Ministry of Agriculture Page 19 McKay Savage Page 40 World Bank Photo Library Page 20 Istockphoto Page 41 Chinese Ministry of Agriculture Page 22 Global Environment Facility Page 43 Insert photo John & Mel Kots Page 23 Istockphoto Large photo Istockphoto Page 24-25 Chinese Ministry of Science Page 46 Chinese Ministry of Science and and Technology Technology Page 29 Istockphoto 46 THE GLOBAL ENVIROMENT FACILITY PRODUcTION cREDITS ABOUT ThE gEF Text: Robert Dixon, Chizuru Aoki, Linda Heath, The Global Environmental Facility unites 182 Alexis Mariani, Henan Xu, Zhihong Zhang, member governments—in partnership with Rich Scheer international institutions, nongovernmental organizations, and the private sector—to address Review and Edits: Bonizella Biagini, Josef global environmental issues. An independent Buchinger, Lars Christiansen, Elisabeth Collins, financial organization, the GEF provides grants Saliha Dobardzic, Osamu Mizuno, David to developing countries and countries with Rodgers, Xi Wang, Dimitrios Zevgolis economies in transition for projects related to biodiversity, climate change, international waters, Publication Date: November 2010 land degradation, the ozone layer, and persistent organic pollutants. These projects benefit the global environment, linking local, national, and global environmental challenges and promoting sustainable livelihoods. Established in 1991, the GEF is today the largest funder of projects to improve the global environment. The GEF has allocated $9.2 billion, supplemented by more than $40 billion in cofinancing, for more than 2,700 projects in more than 165 developing countries and countries with economies in transition. Through its Small Grants Programme, the GEF has also made more than 12,000 small grants directly to nongovernmental and community organizations. The GEF partnership includes 10 Agencies: the UN Development Programme, the UN Environment Programme, the World Bank, the UN Food and Agriculture Organization, the UN Industrial Development Organization, the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the International Fund for Agricultural Development. The Scientific and Technical Advisory Panel provides technical and scientific advice on the GEF’s policies and projects. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES: 47 www.theGEF.org