2014/21 88702 k nKonw A A weldegdeg e ol n oNtoet e s eSrei r e ise s f ofro r p r&a c t hteh e nEenregryg y Etx itcrea c t i v e s G l o b a l P r a c t i c e The bottom line Scaling Up Access to Electricity: Since its inception in 2003, Bangladesh’s solar home system The Case of Bangladesh program has installed about three million electrification systems in rural households, Why is this case interesting? about 1.3 million households. Currently, the SHS program is providing two-thirds of them in the last electricity to about 50,000 new households each month, making it three years. The program is Off-grid electrification is crucial to reaching the most dynamic off-grid electrification program in the world. Solar the most dynamic off-grid universal access home systems are small, household-level electrical systems powered electrification program in the by solar energy. They consist basically of a solar panel, inverter, and Worldwide, 1.2 billion people lack access to electricity. Many live far world, benefitting more than 15 battery. Depending on their size, they can power various domestic from the existing electrical grid. To ensure them access to electricity million people and contributing appliances, including lights, radios, TVs, fans, and refrigerators. by 2030, off-grid electricity solutions will need to be scaled up. The about 130 MW in renewable This success evolved from a small pilot introduced in 2002 International Energy Agency has estimated that to achieve universal energy generation capacity. by the World Bank’s Rural Electrification and Renewable Energy access to electricity as much as two thirds of future energy invest- ments will need to go to mini-grids and stand-alone systems (IEA Development (RERED) project. RERED initially relied on subsidies, 2013). but these have been phased out over time as system prices declined Achieving universal access to modern energy services is one of thanks to economies of scale and technological advances. Today, the the three complementary objectives of the Sustainable Energy for All solar home systems are provided practically on commercial terms. Zubair Sadeque is a senior energy specialist (SE4ALL) initiative. Formally launched in the UN General Assembly in in World Bank’s South September 2012 and co-chaired by the president of the World Bank Asia Energy practice. Group and the UN Secretary-General, SE4ALL calls on governments, Box 1. Key facts Dana Rysankova is a businesses, and civil society to address urgent energy challenges, • Population: 161 million senior energy specialist including universal access, by 2030 (SE4ALL 2012). • Population density: 1,238 persons per km2 in the World Bank’s Despite significant challenges in its power sector (box 1), • GDP per capita: US$ 752 Energy Practice. Bangladesh has succeeded in developing the largest and most dynamic national off-grid electrification program in the world, yield- • Electrification rate: 55 percent Raihan Elahi is a senior energy specialist in ing lessons that may be applicable to other countries considering Bangladesh’s electrification rate is 90 percent in urban areas, but just World Bank’s Africa 43 percent in rural areas (2011), where four in five Bangladeshis live. off-grid solutions to improve access to electricity. The country’s power sector faces numerous challenges, including Energy Practice. Since its inception in 2003, Bangladesh’s solar home system inadequate generation capacity, dependence on high-cost emergency Ruchi Soni is an energy (SHS) program has installed household electrification systems power, weak financial conditions and governance structure of power specialist consultant in in three million rural households, two-thirds of them in the last sector entities, and limited technical capacity. the World Bank’s Energy three years. In the same time period, the country’s rural electricity The installed generation capacity is about 6,500 MW against a peak Practice. demand of 8,000 MW, resulting in widespread power outages. cooperatives have extended access to the national electrical grid to 2 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h A modest subsidy is available only for small systems designed for the monitored by the REB under agreements that specify performance poorest households. targets. Although rural cooperatives extended power to many rural Some aspects of the Bangladeshi SHS program may be unique to households, by the early 2000s concerns about the pace and costs Bangladesh and difficult to replicate in other countries. For example, of rural grid electrification had arisen. the program has benefitted from a strong pre-existing network of It was estimated that at the prevailing pace of grid electrification, competitive microfinance institutions (MFIs) with deep reach in rural Bangladesh would take 50 years to reach universal access. The REB “By 2002, it had become areas, including the world-known Grameen Shakti MFI. Other factors was connecting four to five hundred thousand consumers annually apparent that an off-grid contributing to the program’s success were (i) the high density of to the grid—far fewer than required to reach universal access—and approach was needed to Bangladesh’s rural population, which fostered competition and connection costs were rising. Given that rural households tended to economies of scale; (ii) rising rural incomes and remittances from use electricity primarily for lighting, the government was interested in complement efforts to abroad, which stimulated demand for the off-grid solar systems; and exploring more cost-effective solutions for remote households. The extend the grid. A pilot was (iii) the existence of entities interested in doing business with rural reliability of grid power had also been a concern, with grid-connected introduced to test whether customers and the country’s entrepreneurial culture. households facing frequent power outages because of insufficient solar home systems could But Bangladesh’s experience also conveys many lessons that generation. help reach more remote are applicable to any off-grid electrification initiative. Among those By 2002, it had become apparent that an off-grid approach lessons: was needed to complement efforts to extend the grid. A pilot was rural households.” • The presence of a competent and passionate local champion introduced to test whether solar home systems could help reach with a strong capacity to promote and manage an off-grid more remote rural households. elecrification program When the World Bank’s first RERED project was being designed in 2002, a two-pronged approach was adopted to promote the • Technical and financing solutions that match the target use of solar home systems in rural areas, thereby leveraging the population’s ability to pay country’s renewable energy potential, while continuing to help the • The quality of the solar home system and consumers’ awareness REB and rural cooperatives improve their operational and financial of its availability performance. • The patience to allow the program to evolve over time to reflect new technologies and market trends. What approach was taken? An ownership model based on microfinance What challenges were faced? proved most successful Extension of the national grid to rural areas was The first approach tested by the RERED project was the “owner- slow and costly ship” approach that had previously been successful in Sri Lanka Bangladesh’s rural electrification program was initiated in 1977 with (Govindarajalu, Elahi, and Nagendra 2008). In that model, private the creation of the Rural Electrification Board (REB). The program was dealers in solar home systems would make agreements with MFIs to modeled after the rural cooperatives system of the United States. extend financing to eligible customers. The REB oversees rural electric cooperatives (palli bidyut samity), This model was considered in Bangladesh, but there were which are autonomous organizations that own and operate rural concerns about the ability of private dealers to gain household distribution systems in specific areas. The REB arranges financing to trust. Instead, the SHS program opted for a modified approach that build the distribution lines and hands over the finished infrastructure leveraged the strong presence of Bangladesh’s MFIs in rural areas. to the cooperatives for commercial operations (billing, collection, These MFIs (most of which are nongovernmental organizations, and regular maintenance). The performance of the cooperatives is NGOs) became dealers, responsible for all aspects of the solar home 3 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h system business (technical, commercial and financial). The Figure 1. The microfinance ownership model for solar home systems advantage of this approach was that these MFIs already had established relationships with their clients to whom Provides approval Technical Suppliers Standards they could offer yet another service. For this approach to Seek approval Committee work, however, it was necessary to ensure that the MFIs Supply equipment Pay for gained proficiency in the new market. This was addressed equipment “The partner organizations by substantial training in technology, supplier-selection, PO Apply Partner Provides grants and loans Selection IDCOL Organizations offer a buy-back guarantee and after-sales services. Committee Selects POs - Seek grants and loans n io s This unique feature of Bangladesh’s approach has at ns Sell that gives customers an er ion op olut tio SHS and Pay down- Grants and s k ds olu soft term Repayment proven difficult to replicate in other countries, where MFIs e Se late e s provide payment option to sell their system re o v i d service and credit in general have been reluctant to venture outside of their Pr installments back … if the household core role of financiers. Operations Households Donors Committee obtains a grid connection The second approach was a “fee-for-service” approach within a year. Most to be implemented by REB and the cooperatives. This Source: Presentation by IDCOL at Energy Week, 2013. customers have preferred model built on the cooperatives’ strong presence in rural SHS = solar home system(s) areas. Instead of extending the grid, the cooperatives to keep their solar system, would provide solar home systems to more remote because grid electricity All partner organizations are private (mostly NGOs with a strong households and charge a monthly fee for the use of the systems. base in microfinance), ranging from large, well-known organizations remains unreliable.” Because each approach had merits, the RERED project piloted such as Grameen Shakti to very small entities operating in specific them both. The microfinance model proved more dynamic, primarily areas. They procure solar home systems from various suppliers and because of the greater commitment and interest of the implement- sell them to households and small businesses on microcredit terms ing agency (Infrastructure Development Company Limited, IDCOL) spelled out in purchase contracts. They are expected to prefinance and MFIs to promote solar home systems as a core business line, the systems, for which they can often obtain supplier credit. They whereas for REB and the cooperatives solar home systems remained also install the systems using their own technicians. peripheral to extension of the grid. By 2009, MFIs had installed Once the systems are installed, IDCOL verifies the installations 320,000 systems, compared to just 14,000 systems installed by the and refinances a portion of the partner organizations’ credit to the cooperatives. The fee-for-service approach was then discontinued, households. It may also release a subsidy to the partner organization. and the focus shifted to fine-tuning and scaling up the ownership The refinancing and subsidies that IDCOL provides are drawn from model. its financiers—originally the World Bank but now other development IDCOL is a government-owned financial intermediary with the partners as well. mandate to provide long-term financing for private infrastructure Partner organizations remain in contact with customers during projects. Although owned by the Ministry of Finance, IDCOL is gov- the loan repayment period (typically 2–3 years), collecting payments, erned by an independent board of directors drawn from government providing maintenance, and training customers in both operation and and the private sector. maintenance. Once the loan is repaid, the partner organizations offer IDCOL works with development partners, suppliers of solar service contracts for an annual fee. They also extend a buy-back home systems, and participating MFIs, which are considered partner guarantee that gives customers an option to sell their system back to organizations. IDCOL sets technical specifications, certifies products IDCOL at a depreciated price if the household obtains a grid connec- and components, and selects partner organizations based on clear tion within a year of purchase. Most customers have preferred to eligibility criteria. keep their solar system, because grid electricity remains unreliable. 4 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h The SHS ownership program has been successful primarily The market-development approach worked in Bangladesh, as because it has provided technical and financing solutions to users economies of scale brought unit costs down. At the same time, the that matched their needs. global costs of solar home systems fell, reflecting lower prices for Financing. The program has made systems affordable through photovoltaic panels and other components, efficiency improvements, a combination of consumer credit and (declining) subsidies. The idea and the emergence of more efficient appliances, including LED lights. was to bring monthly expenditures as close as possible to existing When the SHS program started, the average subsidy was $90 “From the start, the SHS household spending on kerosene and dry cells. Subsidies were per system. By 2006 it had been halved and by 2013 eliminated program emphasized initially required to bring the overall costs of the systems down, but except for the smallest systems (table 1). The remaining $20 subsidy quality assurance in they have been gradually phased out. for systems of 30 Wp and below is to enable poorer households to Partner organizations provide microfinance loans to households. participate in the program. order to build consumer Households are required to make a downpayment equivalent to The program has also provided indirect subsidies in the form confidence in solar home 10–15 percent of the cost of the system. The remainder is repaid in of cofinancing for consumer training and awareness building. systems, which were not 2–3 years at prevailing market interest rates (typically 12–15 percent). These activities were developed on a cost-sharing basis, with the yet widespread in rural Sixty to eighty percent of the credit that the partner organization partner organizations bearing 20 percent of the cost. The partner areas.” extends to the household is eligible for refinancing from IDCOL at organizations are now responsible for most consumer training and the prevailing market interest rate of 6–9 percent, with a 5–7 year awareness building. repayment period and a 1–1.5-year grace period. After technical and In addition, the RERED project financed training for partner other verifications, IDCOL releases the credit to the partner organiza- organizations and a comprehensive media campaign to promote the tion, along with any applicable subsidy, within 21 days of the claim. use of solar home systems throughout the country. These activities Partner organizations also often receive supplier credit of up to helped build consumer confidence in solar home systems in a way three months as a sort of bridge loan while awaiting refinancing by that partner organizations could never have done on their own. IDCOL. IDCOL continues to train partner organizations on topics such as Subsidies have evolved over time with regard to both purpose cash flow management, business planning, and technical features. and amount. Originally conceived as market-development tools, Technical features. From the start, the SHS program empha- subsidies were designed to help partner organizations market the sized quality assurance in order to build consumer confidence in systems by making them more affordable, while also covering the solar home systems, which were not yet widespread in rural areas. costs that new partner organizations incurred in setting up a new IDCOL’s technical standards committee prepares specifications business line in solar home systems. and certifies products. Specifications are periodically updated to Table 1. The gradual reduction of subsidies for the installation of solar home systems, 2003–14 (in US dollars) Year 2003 2004/05 2006/07 2008/09 2010/11 2012 2013/14 Capital buy-down grant 70 55 40 40 25 25 20* Institutional development grant 20 15 10 5 3 — — Source: Authors. * Applies only to solar home systems below 30 Wp. An institutional development grant of $3 per system applies to new and smaller partner organizations only. 5 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h reflect new technical advances. Product warranties are required for the subsidy and refinancing released. IDCOL has 21 days from the all key components (panels, batteries and charge controllers). date of a partner organization’s claim to carry out the verifications. It In the program’s early stage, every installation was verified employs more than 100 technical inspectors to carry out the verifica- by IDCOL. Since the program reached the 50,000 target in 2005, tions and maintains a call center to handle customer complaints. installations have been verified on a sample basis. IDCOL verifies that Partner organizations are responsible for providing maintenance the installations are in eligible areas, that the partner organizations and customer training during the loan-repayment period. They also “When the program have used certified products, and that the installations are consistent offer after-sale service contracts to households that have repaid their started, batteries were the with technical requirements and are fully operational. Only then are loans. only component produced The SHS program has offered different system sizes to match customers’ willingness to pay. In the early years, the smallest eligible in Bangladesh. Today, all system was 40Wp, as smaller systems were considered unreliable. components (including Box 2.  World Bank support for the Rural Electrification and The best-selling system was 50Wp. Over time, technical improve- Renewable Energy Development (RERED) program solar panels on a limited ments have driven system sizes down. Today, the program offers scale) are produced Preparation of the Bank’s first RERED project was supported through systems as small as 10Wp. The best-selling system is 30Wp, reflecting locally.” various grants, including a grant of $340,000 from the Global the fact that a 30Wp system today can offer more end uses (includ- Environment Facility to IDCOL to test the proposed microfinance ing powering a color TV) than a 50Wp system could in 2003. approach. IDCOL bought 250 solar home systems and provided 50 Since the first RERED project was approved in 2002, the World systems each to 5 selected partner organizations. The performance of these partner organizations in installation, loan collection, and other Bank has provided continuous support (box 2). Funding has been challenges was tracked to hone the project design and selection used to provide (i) a credit line to IDCOL to refinance microfinance criteria for partner organizations. loans made by partner organizations; (ii) an output-based subsidy, RERED 2002. About $16 million from a larger credit from the and (iii) technical assistance, including for training and implementa- International Development Association was allocated for the solar tion of a consumer-awareness campaign. home system program, complemented by an $8.2 million grant from GEF. The original credit supported 650,000 grid connections and In addition to providing financing, the Bank has offered critical 236,000 solar home systems. advisory services and helped the government to obtain funding RERED 2009. Additional financing of $130 million supported sale of from other development partners. The SHS program is now also another 300,000 solar home systems, in addition to other support supported by the Global Partnership for Output-Based Aid, the for lighting and generation of electricity (including from renewable Asian Development Bank, the Islamic Development Bank, the sources). Japan International Cooperation Agency, KfW, GIZ (German Federal RERED 2011. Additional financing of $172 million supported installation of about 630,000 solar home systems. Development Corporation), and the U.S. Agency for International Development. RERED II (2012). Beyond supporting additional 550,000 solar home systems, the project (valued at $155 million) is also extending the IFC is also contributing to the development of the off-grid elec- solar home system model to additional areas, including (i) solar trification market in Bangladesh. Grameen Shakti was first exposed irrigation pumps, (ii) renewable mini-and micro-grids), and (iii) cleaner to solar home systems in 1998 through an IFC-financed program cookstoves, including biogas digesters for cooking. for small and medium-sized enterprises. Today, IFC’s Lighting Asia RERED II (2014). Additional financing of $78.4 million is supporting program is testing an introduction of solar lanterns (smaller than sale and installation of another 480,000 solar home systems. 10Wp) to further enhance the affordability of good-quality lighting The program has also received funding from GPOBA, a World Bank– for the poorest of the poor, and to develop micro-grids for more administered trust fund, for output-based subsidies ($7.2 in original funding in 2010 and $6.75 in additional funding in 2011). concentrated populations. 6 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h Figure 2. Solar home systems installed each year, 2003–14 900000 852,388 Smaller LED Subsidy eliminated 800000 systems except for systems introduced under 30 Wp 700000 Buy-back 643,812 “Overcoming the scheme 600000 introduced 1 million affordability barrier for solar home systems installed by Bangladeshi households 500000 First target: mid-2011 469,572 Start of 50,000 reached through a combination 400000 IDCOL program 324,775 of consumer credit, 300000 subsidies, and product 200000 169,916 172761 choice opened the way 103,301 100000 69,562 to widespread adoption 11,697 20,635 27,579 37,151 of solar home systems. 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (through March) Rural households will pay Systems installed each year for a solar home system Source: IDCOL. if monthly payments are commensurate with their What was the outcome? and fine-tuning approaches. That focus pays off in later stages, as current expenditures for evidenced by the exponential market growth in Bangladesh from alternative energy sources.” Installations of solar home systems have 2006 onward. mushroomed When the SHS program started, it had five partner organizations, Household access. In 2003, when the SHS program started, no with Grameen Shakti holding a dominant market share. At present, more than 12,000 solar home systems had been installed throughout the program works with 49 organizations, contributing to the creation Bangladesh. The original target of the program was to install 50,000 of a vibrant renewable energy sector, although Grameen Shakti still systems by 2008. That target was achieved three years earlier than accounts for the majority of sales (figure 3). anticipated at a cost that was $2 million less than anticipated. By Initially, batteries were the only component produced in mid-2011, the program had installed a million systems, and as of Bangladesh. Today, all components (including solar panels on March 2014, that figure had risen to 2.9 million, benefitting more a limited scale) are produced locally. In 2013, the International than 15 million people and contributing about 130 MW in renewable Renewable Energy Agency (IRENA) ranked Bangladesh as having the energy generation capacity. The program is currently installing more sixth-largest renewable energy–related workforce in the world—with than 50,000 systems per month. IDCOL’s target is to reach a total of 6 114,000 jobs. million solar home systems by 2016. An impact evaluation study (Samad and others 2013) confirmed Off-grid electrification programs typically have an “S” shape a variety of benefits from solar home systems. It estimated that (figure 2). In the initial phases, the pace of connections tends to be household access to the systems increases per capita food slow, as the program concentrates on building enabling conditions expenditure by 9.3 percent, per capita nonfood expenditure by 4.7 7 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h Figure 3. Market share of partner organizations, 2013 What have we learned? Others, 14% Some conditions are unique to Bangladesh but BRIDGE, 1% Grameen Shaktki, 56% many key lessons are transferable UBOMUS, 2% Hilful Fazal, 3% Some program features may be unique to Bangladesh. “The program’s final design Srizony, 4% Strong microfinance support from established grassroots MFIs/ is a good example of how NGOs helped penetrate rural markets. The SHS program leveraged BRAC, 5% international experience an extensive MFI network that has historically provided microfinance for income-generating activities in rural areas. Early on, the program and local know-how can benefitted from the extended network and reputation of Grameen come together to yield RSF, 15% Shakti, but as it evolved, additional MFIs have become solar home an innovative design system dealers, deepening penetration in rural areas. that suits the country’s Source: Samad and others 2013. Rising rural incomes helped reduce the need for subsidies. Improved agricultural productivity and the huge influx of remittances circumstances.” from Bangladeshi workers abroad have made solar home systems more affordable than they were a few years ago, a factor that has percent, and total per capita expenditure by 5.1 percent, because made it possible to reduce subsidies almost to the vanishing point. of savings derived from the solar home system or time freed up for The feasibility of phasing out subsidies, of course, depends on what productive activity. The study also found that evening study hours is happening with household income levels. for both boys and girls have increased thanks to the installation of High population density has enabled economies of scale, contrib- solar home systems. Solar power was also found to have a positive uting to the price reductions. As one of the most densely populated health impact, especially for women, partly owing to avoidance of countries in the world, Bangladesh was able to leverage economies kerosene fumes. Adopting a solar home system reduced respiratory of scale. The average cost of a 40 Wp solar home system, which is disease in women by aged 16 and above by 1.2 percent. Separately, enough to run a few lights, a mobile phone charger, and a TV, is about a gender-responsive social assessment of RERED carried out in 2012 $300. This is less than half the cost of a similar system in Uganda, for found that owning a solar home system increased mobility and example. High population density also promotes competition in the entrepreneurial ambitions among women. market, as dealers compete vigorously to provide attractive credit In many places around the world, the sustainability of the owner- packages to consumers. While economies of scale can be achieved ship approach has been questioned due to the difficulties to ensure in less densely populated countries, the approach to achieving the after sales services. This has not been the case in Bangladesh. scale may need to be different (competition for customers is likely to Optional after-sale services are provided by partner organizations be more limited). that have a strong local presence and are both willing and able to Many of the program’s lessons may be applicable in provide such services to their customers. other countries. Finding a competent and passionate local Financial sustainability has also been strengthened through the champion is important. One of the early challenges that the program presence of MFIs with strong financial track records. Partner orga- encountered in Bangladesh was that the traditional financiers of nizations have an average loan-collection efficiency of more than the partner organizations were unwilling to finance “nonproductive 90 percent while servicing their debts to IDCOL on time. Meanwhile, loans” such as those for solar home systems. An alternative source dependence on subsidies has been significantly reduced. of funding was found in IDCOL, which at the time was facing a 8 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h slowdown in its core financing activities and was looking for a households hesitated to buy a solar home system if they new area in which to expand. IDCOL has turned out to be both an believed that they would soon be connected to the grid. To enthusiastic promoter of off-grid solutions and an extremely effective deal with this twin challenge, dealers introduced a guarantee to implementer. Its professional management is overseen by a qualified repurchase the solar home system within a year if the household board. obtained a grid connection. The buy-back scheme has proved “Scalability is more The program must take into account the target population’s very persuasive. In reality, the guarantee has rarely been called important than scale. ability and willingness to pay. Overcoming the affordability barrier upon, as grid electrification has been slow and even most for Bangladeshi households through a combination of consumer electrified households elect to keep their solar systems due to In other words, it is less credit, subsidies, and product choice (different system sizes to match the unreliability of the grid. important to aim at varying consumer needs) opened the way to widespread adoption Successful programs must evolve over time to reflect new developing a “a large-scale of solar home systems. Rural households will pay for a solar home technologies and market trends. The Bangladeshi SHS program program” than to focus system if monthly payments are commensurate with their current adapted its technical specifications over time to take advantage of expenditures for alternative energy sources. Although microfinancing new technology developments. The program often faced trade-offs on developing scalable hinges on having institutions willing to lend for solar home systems between the desire to bring new technologies to customers quickly solutions.” (which is not the case in all countries), alternative payment methods and the need to maintain the reputation for reliability of solar home are possible, such as pay-as-you-go schemes. systems—it has typically chosen the cautious approach. For exam- Even with affordable financing, actions to foster consumer trust ple, the program initially offered only systems of 40Wp and larger, in the new technology are needed. If consumers are expected to owing to the reliability problems of the smaller systems then avail- invest a significant share of their income in a solar home system, able. Over time, however, the program introduced smaller systems they have to know that the system will work. That confidence has that increased affordability, while updating technical specifications to been built in Bangladesh through a combination of several parallel allow new components, such as LED lighting. efforts: Operational lessons from the World Bank’s RERED I and II • Ensuring technical quality. The need to set standards and provide projects. RERED took about two years to prepare. Time was needed quality assurance for solar home systems was recognized early. to adapt the model the Bank had used in other countries, to find Stringent quality standards were set, including a 20-year warranty implementing agencies and develop institutional arrangements in for the solar panel and a 5-year warranty for batteries, and the a country in which solar home systems were not widespread, and standards were strongly enforced. Optional after-sale services to test the new approaches. Ultimately, the time spent in project have helped keep customers satisfied with the systems. preparation hastened implementation. The SHS program reached its initial target three years ahead of schedule. • Consumer awareness and training. Consumer awareness The program’s final design is a good example of how interna- and training in the use of new solar home systems promote tional experience and local know-how can come together to yield an sustainability. Fostering a sense of ownership helps ensure innovative design that suits the country’s circumstances. The Bank’s proper maintenance and upkeep. Consumer awareness has initial design ideas were similar to the approach applied in the earlier included a broad set of activities from face-to-face interactions to Sri Lanka project, but insights from IDCOL and partner organizations media campaigns, particularly in the early stages of the program. produced the microfinance ownership approach, which leveraged • Risk perception. Initially, the partner organizations followed the the country’s unique strengths. REB’s electrification plans to avoid areas that were scheduled The project’s design was flexible (with a range of subsidies and to be electrified, but they soon found that they were missing system sizes, for example), allowing for quick adaptation to evolving customers that they could have served. Conversely, many technology and market conditions—and to consumer feedback. 9 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f B a n g l a d e s h Details of the pilot implementation were left flexible, which made it Kumar, Geeta, and Zubair Sadeque. 2012. Output-Based Aid in Make further possible to adapt quickly to experience without resorting to restruc- Bangladesh: Solar Home Systems for Rural Households, 2012, connections turing or other lengthy administrative processes. OBApproaches 42, Global Partnership on Output-Based Aid, Scalability is more important than scale. The Bangladesh SHS World Bank, Washington, DC. https://www.gpoba.org/node/648. Live Wire 2014/9. “Tracking program, the largest off-grid electrification program ever supported Samad, Hussain A., Shahidur R. Khandker, M. Asaduzzaman, Access to Electricity,” by by the World Bank, began as a modest pilot aimed at reaching 50,000 and Mohammad Yunus. 2013. “The Benefits of Solar Home Sudeshna Ghosh Banerjee and connections over a five-year period. This experience shows that it is Systems: An Analysis from Bangladesh.” Policy Research Elisa Portale. less important to aim at developing a “a large-scale program” than to Working Paper 6724, World Bank, Washington, DC. http:// focus on developing scalable solutions. The approach was devel- documents.worldbank.org/curated/en/2013/11/18640651/ Live Wire 2014/20. “Scaling Up oped in several phases, as detailed in box 2. The SHS program was benefits-solar-home-systems-analysis-bangladesh Access to Electricity: The Case scalable because its design leveraged Bangladesh’s strengths while SE4ALL (Sustainable Energy for All Initiative). 2012. In Support of the of Lighting Africa,” by Daniel effectively addressing the identified barriers and allowing for careful Objective to Achieve Universal Access to Modern Energy Services Murphy and Arsh Sharma. and timely adjustments to insights gained during implementation. by 2030. Technical Report of Task Force 1: New York. http://www. sustainableenergyforall.org/about-us. Live Wire 2014/22. “Scaling Sharif, Islam, and Marufa Mithila. 2013. “Rural Electrification Using Up Access to Electricity: The Case of Rwanda,” by Paul References PV: The Success Story of Bangladesh.” Energy Procedia 33: 343–54. http://www.sciencedirect.com/science/article/pii/ Baringanire, Kabir Malik, and Govindarajalu, Chandra, Raihan Elahi, and Jayantha Nagendra. 2008. S1876610213000854. Sudeshna Ghosh Banerjee. “Electricity Beyond the Grid: Innovative Programs in Bangladesh and Sri Lanka.” Energy Sector Management Assistance Program, World Bank, Washington, DC. The peer reviewers for this note were Migara Jayawardena (senior energy IEA (International Energy Agency). 2013. World Energy Outlook 2013. specialist, Latin American and Carribean Energy Practice, World Bank), Monali Paris. Ranade (senior environmental specialist, Climate Change Policy and Finance IFC (International Finance Corporation). Lighting Asia: Solar Off- Group, World Bank, and Chandrasekar Govindarajalu (senior energy specialist, Grid Lighting—Market Analysis of India, Bangladesh, Nepal, Sustainable Business Advisory Practice, IFC). Pakistan, Indonesia, Cambodia, and Philippines. New Delhi. http://www.ifc.org/wps/wcm/connect/topics_ext_content/ ifc_external_corporate_site/ifc+sustainability/publications/ publications_report_lightingasia. Get Connected to Live Wire Live Wires are designed for easy reading on the screen and for downloading The Live Wire series of online knowledge notes is an initiative of the World Bank Group’s Energy and self-printing in color or “Live Wire is designed and Extractives Global Practice, reflecting the emphasis on knowledge management and solu- black and white. tions-oriented knowledge that is emerging from the ongoing change process within the Bank for practitioners inside Group. For World Bank employees: and outside the Bank. Professional printing can Each Live Wire delivers, in 3–6 attractive, highly readable pages, knowledge that is immediately It is a resource to relevant to front-line practitioners. also be undertaken on a customized basis for share with clients and specific events or occasions Live Wires take a variety of forms: counterparts.” • Topic briefs offer technical knowledge on key issues in energy and extractives by contacting GSDPM Customer Service Center at • Case studies highlight lessons from experiences in implementation (202) 458-7479, or sending a • Global trends provide analytical overviews of key energy and extractives data written request to cgsdpm@ • Bank views portray the Bank Group’s activities in the energy and extractives sectors worldbank.org. • Private eyes present a private sector perspective on topical issues in the field Each Live Wire will be peer-reviewed by seasoned practitioners in the Bank. Once a year, the Energy and Extractives Global Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. Please visit our Live Wire web page for updates: http://www.worldbank.org/energy/livewire e Pa c i f i c 2014/28 ainable energy for all in easT asia and Th 1 Tracking Progress Toward Providing susT TIVES GLOBAL PRACTICE A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRAC THE BOTTOM LINE Tracking Progress Toward Providing Sustainable Energy where does the region stand on the quest for sustainable for All in East Asia and the Pacific 2014/29 and cenTral asia energy for all? in 2010, eaP easTern euroPe sT ainable en ergy for all in databases—technical measures. This note is based on that frame- g su v i d i n had an electrification rate of Why is this important? ess Toward Pro work (World Bank 2014). SE4ALL will publish an updated version of 1 Tracking Progr 95 percent, and 52 percent of the population had access Tracking regional trends is critical to monitoring the GTF in 2015. to nonsolid fuel for cooking. the progress of the Sustainable Energy for All The primary indicators and data sources that the GTF uses to track progress toward the three SE4ALL goals are summarized below. consumption of renewable (SE4ALL) initiative C T I V E S G L O B A L P R A C T I C E ENERGY & EXTRA • Energy access. Access to modern energy services is measured T E S E R I E S F O R T H EIn declaring 2012 the “International Year of Sustainable Energy for energy decreased overall A KNO W L E D G E N Oand 2010, though by the percentage of the population with an electricity between 1990 All,” the UN General Assembly established three objectives to be connection and the percentage of the population with access Energy modern forms grew rapidly. d Providing Sustainable accomplished by 2030: to ensure universal access to modern energy energy intensity levels are high to nonsolid fuels.2 These data are collected using household Tracking Progress Towar services,1 to double the 2010 share of renewable energy in the global surveys and reported in the World Bank’s Global Electrification but declining rapidly. overall THE BOTTOM LINE energy mix, and to double the global rate of improvement in energy e and Central Asia trends are positive, but bold Database and the World Health Organization’s Household Energy for All in Eastern Europ efficiency relative to the period 1990–2010 (SE4ALL 2012). stand policy measures will be required where does the region setting Database. The SE4ALL objectives are global, with individual countries on that frame- on the quest for sustainable to sustain progress. is based share of renewable energy in the their own national targets databases— technical in a measures. way that is Thisconsistent with the overall of • Renewable energy. The note version energy for all? The region SE4ALL will publish an updated their ability energy mix is measured by the percentage of total final energy to Why is this important ? spirit of the work initiative. (World Bank Because2014). countries differ greatly in has near-universal access consumption that is derived from renewable energy resources. of trends is critical to monitoring to pursue thetheGTF in 2015. three objectives, some will make more rapid progress GTF uses to Data used to calculate this indicator are obtained from energy electricity, and 93 percent Tracking regional othersindicators primary will excel and data sources that elsewhere, depending on their the while the population has access le Energy for All in one areaThe goals are summarized below. balances published by the International Energy Agency and the the progress of the Sustainab respective track starting progress pointstowardand the three SE4ALL comparative advantages as well as on services is measured to nonsolid fuel for cooking. access. Accessthat they modern to are able to energy marshal. United Nations. despite relatively abundant (SE4ALL) initiative the resources and support Energy with an electricity connection Elisa Portale is an l Year of Sustainable Energy for To sustain percentage of by the momentum forthe the population achievement of the SE4ALL 2• Energy efficiency. The rate of improvement of energy efficiency hydropower, the share In declaring 2012 the “Internationa energy economist in with access to nonsolid fuels. three global objectives objectives, andathe means of charting percentage of the population global progress to 2030 is needed. is approximated by the compound annual growth rate (CAGR) of renewables in energy All,” the UN General Assembly established the Energy Sector surveys and reported access to modern universalAssistance The World TheseBank and data are the collected International using household Energy Agency led a consor- of energy intensity, where energy intensity is the ratio of total consumption has remained to be accomplished by 2030: to ensure Management Database and the World of theenergy intium of 15 renewable international in the World Bank’s Global agencies toElectrification establish the SE4ALL Global primary energy consumption to gross domestic product (GDP) energy the 2010 share of Program (ESMAP) relatively low. very high energy services, to double Database. measured in purchasing power parity (PPP) terms. Data used to 1 t ’s Household provides Energy a system for regular World Bank’s Energy the global rate of improvemen and Extractives Tracking Framework Health (GTF), which Organization in the energy intensity levels have come and to double the global energy mix, Global Practice. (SE4ALL 2012). based on energy. of renewable The sharepractical, rigorous—yet energy given available calculate energy intensity are obtained from energy balances to the period 1990–2010 global reporting, Renewable down rapidly. The big questions in energy efficiency relative setting by the percentage of total final energy consumption published by the International Energy Agency and the United evolve Joeri withde Wit is an countries individual mix is measured Data used to are how renewables will The SE4ALL objectives are global, economist in with the overall from renewable energy when every resources. person on the planet has access Nations. picks up a way energy that is consistent 1 The universal derived that isaccess goal will be achieved balances published when energy demand in from energy their own national targets through electricity, clean cooking fuels, clean heating fuels, rates the Bank’s Energy and countries differ greatly in their ability calculate this indicator are obtained to modern energy services provided productive use and community services. The term “modern solutions” cookingNations. again and whether recent spirit of the initiative. Because Extractives Global rapid progress and energy for Energy Agency and the United liquefied petroleum gas), 2 Solid fuels are defined to include both traditional biomass (wood, charcoal, agricultural will make more by the refers to solutions International that involve electricity or gaseous fuels (including is pellets and briquettes), and of decline in energy intensity some t of those of efficiency energy and forest residues, dung, and so on), processed biomass (such as to pursue the three objectives, Practice. depending on their or solid/liquid fuels paired with Energy efficiency. The rate stoves exhibiting of overall improvemen emissions rates at or near other solid fuels (such as coal and lignite). will excel elsewhere, rate (CAGR) of energy will continue. in one area while others liquefied petroleum gas (www.sustainableenergyforall.org). annual growth as well as on approximated by the compound and comparative advantages is the ratio of total primary energy respective starting points marshal. where energy intensity that they are able to intensity, measured in purchas- the resources and support domestic product (GDP) for the achievement of the SE4ALL consumption to gross calculate energy intensity Elisa Portale is an To sustain momentum terms. Data used to charting global progress to 2030 is needed. ing power parity (PPP) the International energy economist in objectives, a means of balances published by the Energy Sector International Energy Agency led a consor- are obtained from energy The World Bank and the SE4ALL Global Energy Agency and the United Nations. Management Assistance agencies to establish the the GTF to provide a regional and tium of 15 international for regular This note uses data from Program (ESMAP) of the which provides a system for Eastern Tracking Framework (GTF), the three pillars of SE4ALL World Bank’s Energy and Extractives on rigorous—yet practical, given available country perspective on Global Practice. global reporting, based has access Joeri de Wit is an will be achieved when every person on the planet The universal access goal heating fuels, clean cooking fuels, clean energy economist in 1 agricultural provided through electricity, biomass (wood, charcoal, to modern energy services The term “modern cooking solutions” to include both traditional and briquettes), and Solid fuels are defined the Bank’s Energy and use and community services. biomass (such as pellets 2 and energy for productive petroleum gas), and so on), processed fuels (including liquefied and forest residues, dung, involve electricity or gaseous at or near those of Extractives Global refers to solutions that overall emissions rates other solid fuels (such as coal and lignite). with stoves exhibiting Practice. or solid/liquid fuels paired (www.sustainableenergyforall.org). liquefied petroleum gas Contribute to If you can’t spare the time to contribute to Live Wire, but have an idea for a topic, or case we should cover, let us know! Do you have something to say? We welcome your ideas through any of the following Say it in Live Wire! channels: Via the Communities of Those working on the front lines of energy and extractives development in emerging economies Practice in which you are have a wealth of technical knowledge and case experience to share with their colleagues but active seldom have the time to write for publication. By participating in the Energy Live Wire offers prospective authors a support system to make sharing your knowledge as easy as and Extractives Global possible: Practice’s annual Live Wire • Trained writers among our staff will be assigned upon request to draft Live Wire stories with series review meeting staff active in operations. By communicating directly • A professional series editor ensures that the writing is punchy and accessible. with the team (contact • A professional graphic designer assures that the final product looks great—a feather in your cap! Morgan Bazilian, mbazilian@ worldbank.org) Live Wire aims to raise the profile of operational staff wherever they are based; those with hands-on knowledge to share. That’s your payoff! It’s a chance to model good uroPe and cenT ral asia 2014/29 all in easTern e ble energy for “knowledge citizenship” and participate in the ongoing change process at the Bank, v i d i n g s u s Ta i n a ess Toward Pro 1 Tracking Progr where knowledge management is becoming everybody’s business. A KNOWLEDGE NOT E SERIES FOR THE ENERGY & EXTRACT IVES GLOBAL PRAC TICE rgy Providing Sustainable Ene Tracking Progress Toward Or 2014/5 1 U n d e r s ta n d i n g C O 2 emissiOns frOm the glObal energy seCt THE BOTTOM LINE pe and Cen tral Asia for All in Eastern Euro stand where does the region on the quest for sustaina ble based on that frame- measures. This note is databases—technical updated version of energy for all? The region SE4ALL will publish an has near-universal access to WhyD is this important? ERGY PRACTICE work (World Bank 2014). E G E N O T E S E R I E S F O R T H E E N to electricity, and 93 percent of A K N O W L g regiona l trends is critical monitoring the GTF in 2015. data sources that the GTF uses to Trackin The primary indicator s and the population has access s of the Sustain able Energy for All the three SE4ALL goals are summari zed below. the progres track progress toward Understanding CO Emissions from the Global Energy Sector nonsolid fuel for cooking. is measured to modern energy services THE BOTTOM LINE to Your Name Here t (SE4ALL) initiativ e Energy access. Access connection despite relatively abundan 2 population with an electricity ional Year of Sustainab le Energy for by the percentage of the access to nonsolid fuels. 2 hydropower, the share the energy sector contributes In declaring 2012 the “Internat objectives percenta ge of the population with establish ed three global and the and reported about 40 percent of global of renewables in energy All,” the UN General Assembly using household surveys Why is this issue important? access to modern These data are collected 2030: to ensure universal and the World Become an author has remained emissions of CO2. three- consumption to be accomplished by of renewable energy in in the World Bank’s Global Electrification Database high energy knowledge the share of the 2010 . energy requires very relatively low. Mitigating climate change services, to 1 double ld Energy Database quarters of those emissions rate of improvement Organization’s Househo CO2 intensity levels have come and to double the global Figure 1. CO2 emissions Health Figure 2. energy-related The share of renewable energy in the energy come from six major the global energy mix, sources of CO question s2 emissions to the period 1990–201 0 (SE4ALL 2012). by sector Renewab le energy. emissions by country consumption down rapidly. The big economies. although coal-fired in energy efficiency relative countries setting percenta ge of total final energy mix is measured by the of Live Wire and global, with individual LICs evolve les will opportunities to cut emissions of greenhouse aregases used to plants account for just are how renewab Identifying The SE4ALL objectives le energy resources. Data 0.5% picks upunderstanding of the main sources ofin those a way that is consistent with emis- the overall that is derived from renewab energy balances published 40 percent of world energy when energy demand requires a clear their own national targets in their ability are obtained from calculate this indicator Other Carbonrates for more than 80 percent of differ greatly countries Residential production, they were again and whethersions.recent dioxide (CO2) accounts spirit of the initiative. Because 6% sectors progress Other MICs nal Energy Agency and the United Nations. will make more rapid 15% intensity gas emissions globally, 1 primarily from the burning s, some 10% by the Internatio China improvement of energy efficiency is contribute to your responsible for more than of decline in energytotal greenhouse to pursue the three objective on their Other HICs . The rate of energy sector—defined include toexcel elsewhere, depending Energy efficiency 30% growth rate (CAGR) of energy will continue. of fossil fuels (IFCC 2007). The will 8% in one area while others by the compound annual Energy 70 percent of energy-sector as well as on 41% approxim and heat generation—contributed and compara tive advantages 41 ated Japan 4% energy the ratio of total primary Industry emissions in 2010. despite fuels consumed for electricity respective starting points 20% Russia energy intensity is that they are able to marshal. in 2010 (figure 1). Energy-related intensity, where USA product (GDP) measured in purchas- improvements in some percent of global CO2 emissions the resources and support 7% gross domestic practice and career! up the bulk of such ent of the SE4ALL Other consump tion to India 19% intensity is an at the point of combustion make for the achievem calculate energy countries, the global CO2 Elisa 2 emissions COPortale To sustain momentum transport Road 7% EU terms. Data used to andinare generated by the burning of fossil is needed. global progress to 2030 6% transport fuels, industrial ing power parity (PPP) the International economist objectives, a means of charting balances published by emissions 11% emission factor for energy energy 16% EnergyandSector nonrenewable municipal waste to generate nal Energy Agency led electricity Internatio a consor- are obtained from energy The World Bank and the thewaste, generation has hardly changed United Nations. ent Assistance venting and leakage to establish the emissions SE4ALL Global Energy Agency and the sector at the point and over the last 20 years. and heat. Black carbon and methane Managem tium of 15 international agencies Notes: Energy-related CO2 emissions are CO2 emissions from the energy from the GTF to provide a regional of the for regular This note usesanddata domestic Program (ESMAP) are not included in the analysis presented in this rk note. which provides a system (GTF), of combustion. Other Transport includes international marine aviation bunkers, of SE4ALL for Eastern Extractives Tracking Framewo available Other Sectors rail and pipeline transport; perspect ive on the three include pillars commercial/public World Bank’s Energy and given aviation and navigation, country on rigorous—yet practical, services, agriculture/forestry, fishing, energy industries other than electricity and heat genera- Global Practice. global reporting, based elsewhere; Energy = fuels consumed for electricity and Where do emissions come from? tion, and other emissions not specified as has in the opening paragraph. HIC, MIC, and LIC refer to high-, middle-, access Joeri de Wit is an will be achieved when on the planet heat generation, every person defined The universal access goal of countries heating fuels, energy economistare Emissions concentrated in 1 in a handful to modern energy services provided through electricity, fuels, clean and low-income clean cooking countries. cooking solutions” to include both traditional biomass (wood, charcoal, agricultural The term “modern Source: IEA 2012a. Solid fuels are defined and briquettes), and the Bank’s Energy and use and community services. biomass (such as pellets 2 and come primarily from burning and energy coal for productive electricity or gaseous fuels involve (including liquefied petroleum gas), of and forest residues, dung, and so on), processed Vivien Foster is sector Extractives Global refers to solutions that overall emissions rates at or near those other solid fuels (such as coal and lignite). with stoves exhibiting or solid/liquid fuels paired emissions closely manager for the Sus- The geographical pattern of energy-related CO Practice. gas 2 (www.sustainableenergy forall.org). liquefied petroleum middle-income countries, and only 0.5 percent by all low-income tainable Energy Depart- mirrors the distribution of energy consumption (figure 2). In 2010, ment at the World Bank countries put together. almost half of all such emissions were associated with the two (vfoster@worldbank.org). Coal is, by far, the largest source of energy-related CO2 emissions largest global energy consumers, and more than three-quarters globally, accounting for more than 70 percent of the total (figure 3). Daron Bedrosyan were associated with the top six emitting countries. Of the remaining works for London This reflects both the widespread use of coal to generate electrical energy-related CO2 emissions, about 8 percent were contributed Economics in Toronto. power, as well as the exceptionally high CO2 intensity of coal-fired by other high-income countries, another 15 percent by other Previously, he was an power (figure 4). Per unit of energy produced, coal emits significantly energy analyst with the more CO emissions than oil and more than twice as much as natural 2 World Bank’s Energy Practice. Gas Inventory 1 United Nations Framework Convention on Climate Change, Greenhouse 0.php gas. Data—Comparisons By Gas (database). http://unfccc.int/ghg_data/items/380