UNDP presentation - Zoran Morvaj at Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

1. Small hydro and rural development in Tajikistan —Energy for development and poverty reduction Zoran Morvaj Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

2. Contents Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia 2 1. Situation analysis and UNDP approach 2. Area based piloting of RES driven Integrated rural development (IRD) 3. Scaling-Up of the RES driven IRD 4. Enabling Environment for the Scaling-Up 5. Impacts of Improved Access to Electricity on Poor Households and on the Environment 6. Conclusion

3. Situation Analyses and UNDP Approach – Background 73% of population lives in rural areas -> consuming only 8.58% of electricity! 53% of population lives below the poverty line (2007); The PRS III adopted, but poverty causes still not identified; 1 million people considered to be particularly affected by lack of access to electricity; Tajikistan`s key resource – hydro potential! “Power Island” -> energy security and future energy exports are top national priorities: long term goal to finish HPP Rogun Intermediate solution needed! Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

4. Energy Poverty = Household’s inability to afford and/or to access the basic energy services, in the cases where desire to use these services exist. Situation Analyses and UNDP Approach – Understanding poverty Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

5. Urban and rural poverty Basic energy services in rural households: lighting, heating, cooking, Lack of access to reliable and affordable electricity - key poverty driver at rural communities! Situation Analyses and UNDP Approach – Understanding poverty Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

6. Poverty - Energy – a household energy balance Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

7. Poverty - Environment Reliance on firewood – environmental degradation 7 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

8. Poverty - Energy efficiency Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia 8

9. Poverty - Energy efficiency Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia 9

10. D1 D2 D…l Donors Situation Analyses and UNDP Approach – Context . . . M1 M2 M3 M13 Ministries Issues Projects: Effects? ND & PRS pop. 7M (50% poverty rate) Fragmentation! Coordination and integration!!

11. Situation Analyses and UNDP Approach – Governance Integration and coordination! 13 ministries GoT Strengthening institutional and regulatory framework for PRS implementation; Strengthening local capacities to implement and operate specific projects; Region (4) District (59) Establish vertical coordination and communication mechanisms Jamoat (ap. 406) City (ap. ….) (ap. ….) (ap. Village Mahala Mahala Mahala Mahala

12. Situation Analyses and UNDP Approach Local resources for local development and poverty reduction. 1. Every village in Tajikistan is situated on at least one water flow - Small scale hydro power plants (sHPP) 2. 280-330 sunny days with 3.5 to 5.3 kWh/m2/day on the year Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

13. Situation Analyses and UNDP Approach Local resources for local development and poverty reduction. Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

14. Situation Analyses and UNDP Approach Local resources for local development and poverty reduction. Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

15. Situation Analyses and UNDP Approach Local resources for local development and poverty reduction. Electricity powering local workshops – creation of income generation opportunities! Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

16. Situation Analyses and UNDP Approach Local resources for local development and poverty reduction. Varsob district - Roh village: ski resort and hotel ENERGY TOURISM Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

17. Situation Analyses and UNDP Approach Local resources for local development and poverty reduction. Key objectives Poverty reduction by improving access to electricity based on local resources and through that improving quality of basic social services, provision of clean water and creation of income generating opportunities – i.e. supporting integrated rural development (IRD); Provide impuls for economic development in the sectors related to RES (and EE), by devising support mechanisms for implementing rural RES (and EE) schemes; Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

18. Situation Analyses and UNDP Approach Local resources for local development and poverty reduction. Key Pillars of UNDP response: Establishing proper policy framework that will promote community based sHPP and EE projects: Intermediate Strategy for RES driven Integrated Rural Development and related regulatory framework Energy Efficiency Master Plan (EEMP) National Programme for RES driven Integrated Rural Development - National Scaling-Up Standardization guidelines for sHPP construction (30 – 500 kW); Developing local manufacturing, engineering, operation and maintenance capabilities related to RES and EE: District Development Planning Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

19. How we are doing that: Area based piloting of RES driven Integrated rural development (IRD) Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

20. 2. Area based piloting of RES driven Integrated rural development (IRD) 20 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

22. Situation Analyses and Approach Key Issues: to made the approach sustainable by involving local communities as operators of facilities, collecting payments from communities during winters, and selling electricity to the grid during summers where feasible; to support capacity strengthening at relevant institution (ministries, district, jamoat, local communities) for implementation of PRS; Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

25. 83 hospitals; Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

27. 15,000 inhabitants, 17 villages and 449 dehkan farms;The main activities are land cultivation and cattle breeding; List of Jamoat administration (salaries 467 – 92 TJS/month): Head of Jamoat - Deputy of the head of jamoat Secretary, Chief accountant, Accountant, Cashier Accountant on statistics, Land surveyor Specialist on regulating national traditions Secretary (assistant), The head of military department Deputy of the head of military department, Operator Maid (cleaner), Guard Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

28. 2. Area based piloting of RES driven Integrated rural development (IRD) The jamoat’s annual budget: 314.680 TJS, The social units in the jamoat: 3 ambulance stations, 8 medical points, 2 kindergartens, 1 polyclinic. 1 school and 1 hospital (on Vakhdat district budget) Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

29. 2. Area based piloting of RES driven Integrated rural development (IRD) Pilot project 1: Construction of sHPP for community use during winters and for selling electricity to the grid (Barki Tajik) during summers “On the Introduction of Changes and Amendments to the Law on Energy» Article 1. The following changes have to be Introduced to the law on “Law on Energy” dated November 29, 2000 Reg. # 12, Article 633): Add the following changes to the Article 15 part two and three: “In order to promote and support the development of small energy, to introduce and use alternative sources of energy, ………………..” Date: July 30, 2007 Reg. #310 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

30. 2. Area based piloting of RES driven Integrated rural development (IRD) Pilot project s: Rehablitation of hospital – Gulobad village Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

31. 2. Area based piloting of RES driven Integrated rural development (IRD) Pilot project 2: Rehablitation of hospital – Gulobad village Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

32. 2. Area based piloting of RES driven Integrated rural development (IRD) Pilot project 3: Rehabilitation of School Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

33. Pilot project 4: Water pump station repair 2. Area based piloting of RES driven Integrated rural development (IRD) Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

34. 2. Area based piloting of RES driven Integrated rural development (IRD) Pilot project 5: create income generation opportunities construction of a Mini diary 500 l/day Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

35. 2. Area based piloting of RES driven Integrated rural development (IRD) Pilot project 6: create income generation opportunities construction of a greenhouse Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

37. DDP for vahdat district developed and publicly presented,

38. Jamoat authorities actively patricide in all pilot projects

39. Local communities contribute for pilot projects with labor..Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

41. Methodology for setting tariffs

42. Conditions for connection to Barki Tajik network

43. Technical standardization

44. Financial support

46. 35 3. Scaling-Up of the RES driven IRD Excellent potential, eagerness of local people and familiarization with technology and its benefits => key to success Potential to develop local industry and supply chain- standardization Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

47. 3. Scaling-Up of the RES driven IRD Excellent potential, eagerness of local people and familiarization with technology and its benefits => key to success Potential to develop local industry and supply chain- standardization + it is here already 36 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

48. 3. Scaling-Up of the RES driven IRD mHPP enables distributed electricity generation at the point of demand RES generated electricty could replace some of the firewood used for erhatign and cooking The average rural household -40 kilos of collected fuel-wood per day – women and children Up to 6 hours of physical work daily Significant financial returns to local economy through incentives and utilisation of locally available goods and services Creation of income opportunities Overall improvement of livelihoods 37 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

49. 3. Scaling-Up of the RES driven IRD 38 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

50. 3. Scaling-Up of the RES driven IRD Energy Efficiency 39 The selected EE measures should include the following: improving building insulation by using locally available resources (straw and cane) and technologies (lathing and furring); enhancing single glazed windows with a double glazing improving cooking/heating stoves Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

51. 40 3. Scaling-Up of the RES driven IRD Energy Efficiency Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

52. 4. Enabling eenvironment for the Scaling-Up 41 Technology Transfer Know how for O&M Manufacturing capacity Engineering services Training and education Public awareness and information Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

53. 4. Enabling eenvironment for the Scaling-Up National Trust Fund for RES and EE To provide organizational and financial support for development of RES and EE in Tajikistan through: Provision of institutional support for electricity producers from RES, particularly to the local communities , i.e. managing the scheme of guaranteed RES electricity buy-back Incentives for electricity buy-back for grid connected mHPPs Financial aid for preparation of RES/EE project (up to 40%) Financial aid for thermal and for off-grid RES installations (up to 40%; up to 100%) 42 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

55. Government Regulation on establishment of “National Trust Fund for RES and EE” (drafted)

56. Establishment pursuant to the implementation of articles 14-16 of the Law “On the use of RES” and also on the basis of article 132 of the Civil Code

57. Main characteristics of the Fund:

58. Independent , non-commercial organization created by the Government

59. Funded by the Government wholly, or at least partially

60. Established for coordination and management of financial means targeted for development and implementation of RES and EE programs and projects

61. Projects of local communities for development of small scale energy supply systems have the priority in awarding financing from the Fund43 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

63. 0.7% of the annual lump sum cost of electricity supplied to the consumers through distribution grids as well of oil products imported by economic agents

64. 100% of the means collected from the environmental (ecology) tax paid by all vehicle drivers

65. Other sources:

66. means from the republic and local budgets, non budgeted means designated to the Fund at the order of the legislation of RT;

67. International and national (financial) institutions’ credits, grants and donations

68. Financial and material resources, allocated in compliance with multilateral and bilateral cooperation programs of the Fund;

69. Incomes from the own activities, i.e. incomes from the interest rates on preferential credits

70. Other sources not forbidden by effective legislations44 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

72. Allocated to physical and legal entities on the basis of open competition and inquiry

73. Priorities to be given to community based projects and realization of programs envisaged in strategic documents -> systematic approach

74. Conditions for obtaining financial assistance from the Fund shall be determined by the Rules of the Fund:

75. up to 50% of total costs for construction of community based RES power plants with condition that that 50% of power plant value is supplied by local sources in equipment and works -> resource based & development driven approach

76. up to 100% of total costs for national public promotional campaigns, educational and training programs on RES and EE -> human resources development

77. up to 40% of total costs for preparing project documentation

78. up to 40% of total costs for installation of RES systems for production of heat and implementation of EE improvement projects

79. up to 100% of total costs for RES and EE projects in remote rural regions and in the public sector45 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

80. Awarding financial support from the Fund ( 4. Enabling eenvironment for the Scaling-Up Scheme for guaranteed buy-back of RES electricity 46 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

82. Demonstrates the Government commitment

83. Attracts international financial institutions!

84. How to make the Fund fully operational?

85. Systematic approach – operation based on national strategies and scaling-up plan for RES based IRD

86. Resource-based and development driven – support primarily mHPP and demonstrate inclusion of domestic materials, products and work force

87. Human resources development – support educational and training programs to build national capacities for implementation ofRES and EE projects47 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

88. 5. Impacts of Improved Access to Electricity on Poor Households and on the Environment 48 Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

89. 6. Conclusions 49 Scaling-up impacts: Decreased indoor pollution 6 hours of saved time (women and children) -> possibility to acquire jobs and to study Thousands of jobs and money making opportunities created Millions of US$ to go back to local communities Tons CO2 preserved in carbon sinks Biodiversity preservation (decreased deforestation, soil erosion, desertification, salinization) Overall improvement of the social services and quality of life Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

90. 6. Conclusions 50 Addressing poverty by implementing sHPPs accelerates progress to MDGs achievement Pilot projects proved successful => the way forward is to SCALE UP Scaling up requires functional Trust Fund and Technology Transfer The only available short-term solution for poverty reduction is to implement integrated rural development projects based on RES and EE. Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

91. Thank you for your attention! zoran.morvaj@undp.org