People’s Republic of Bangladesh Infrastructure Development Company Limited (IDCOL) People’s Republic of Bangladesh Preparatory Survey on Renewable Energy Development Project Final Report November 2012 Japan International Cooperation Agency Mitsubishi Research Institute, Inc. 4R JR（先） 12-039 “PREPARATORY SURVEY ON RENEWABLE ENERGY DEVELOPMENT PROJECT” <Final Report> Prepared for: JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) INFRASTRUCTURE DEVELOPMENT COMPANY LIMITED (IDCOL) Prepared by: MITSUBISHI RESEARH INSTITUTE, INC. Submitted to JICA November 2012 Table of Contents 1. Overview of JICA-REDP ...................................................................................................... 1 1.1. Background ...................................................................................................................... 1 1.2. Features of JICA-REDP ................................................................................................... 2 2. Deployment Status of Renewable Energy (RE) and Energy Efficiency and Conservation (EE&C) Technologies in Bangladesh.................................................................................... 5 2.1. Overview of Energy Sector in Bangladesh ...................................................................... 5 2.1.1. Energy Balance....................................................................................................... 5 2.1.2. Power Generation ................................................................................................... 6 2.1.3. Renewable Energy and Energy Efficiency & Conservation Promotion Policies . 10 2.1.4. Interventions by Other Development Partners ..................................................... 12 2.2. Solar PV ......................................................................................................................... 13 2.2.1. Environment for Penetration of Solar PV Technologies ...................................... 13 2.2.2. Solar Home System (SHS) ................................................................................... 16 2.2.3. Solar Irrigation Pump Project ............................................................................... 24 2.2.4. Mini-Grid ............................................................................................................. 31 2.2.5. Grid Connected Solar PVs ................................................................................... 34 2.2.6. Summary of Expected Effects from Existing Solar PV Programs and Projects... 35 2.2.7. Other Components Candidates ............................................................................. 36 2.2.8. Comparison between the Solar PV Technologies ................................................ 38 2.2.9. Selection of Solar PV RE Components ................................................................ 40 2.3. Biomass Derived RE ...................................................................................................... 43 2.3.1. Overview of Biomass Derived Renewable Energy in Bangladesh ...................... 43 2.3.2. Domestic Biodigesters .......................................................................................... 47 2.3.3. Gasification of Biomass ....................................................................................... 55 2.3.4. Biogas Power Generation Component ................................................................. 62 2.3.5. Other Biomass Derived RE Potential Projects ..................................................... 71 2.3.6. Comparison between the Biomass derived RE Technologies .............................. 73 2.3.7. Issues for Further Deployment of Biomass Derived RE ...................................... 74 2.3.8. Selection of Biomass Derived RE Components ................................................... 75 2.4. Energy Efficiency and Conservation (EE&C) ............................................................... 79 2.4.1. Overview of EE&C Measures in Bangladesh ...................................................... 79 2.4.2. EE&C Measures for the Industry Sector .............................................................. 81 2.4.3. EE&C Measures in Commercial and Residential Sectors .................................... 82 2.4.4. Consumer Electricity / Gas Savings ..................................................................... 85 2.4.5. Issues and Future Directions for Promotion of EE&C Measures ......................... 86 2.4.6. Selection of EE&C Sub-Projects .......................................................................... 89 3. Institutional Arrangements for Project Implementation ...................................................... 93 3.1. Project Executing Agency .............................................................................................. 93 3.1.1. Status of IDCOL ................................................................................................... 93 3.1.2. Organization ......................................................................................................... 94 3.1.3. Governance Structure of IDCOL.......................................................................... 95 3.1.4. Financial Status of IDCOL ................................................................................... 98 3.1.5. Products and Services provided by IDCOL ....................................................... 103 3.1.6. IDCOL’s Renewable Energy Initiatives ............................................................. 105 3.1.7. IDCOL’s Component Management Structure (SHS Program) .......................... 106 3.1.8. IDCOL’s Component Management Structure (RE Projects) ............................. 115 3.2. Financial Arrangements for IDCOL’s Programs and Projects ..................................... 118 3.2.1. Outline of the Whole Financial Arrangement .................................................... 118 3.2.2. Lending Terms ................................................................................................... 120 3.2.3. IDCOL’s Lending Terms compared with Other Financial Institutions .............. 123 3.3. Risk Mitigation for IDCOL’s Programs and Projects .................................................. 125 3.3.1. Risk Identification .............................................................................................. 125 3.3.2. Credit Risk Management .................................................................................... 125 3.3.3. Security for Lending to the Sponsors ................................................................. 126 3.4. IDCOL’s Capacity to Execute RE Programs and RE Projects .................................... 127 3.4.1. Financial Resources for RE Programs and Projects ........................................... 127 3.4.2. Support by External Resources .......................................................................... 128 3.4.3. Assessment of IDCOL’s Capacity to Conduct RE Programs and RE Projects .. 132 3.5. Overall Evaluation Criteria for the Selection of Appropriate Components for IDCOL135 4. Components of Renewable Energy Development Project and Programs of EE&C Technologies...................................................................................................................... 136 4.1. SHS Program Component ............................................................................................ 136 4.1.1. Expected Effect from the Component ................................................................ 136 4.1.2. Implementation Structure ................................................................................... 137 4.1.3. Business Plan ...................................................................................................... 139 4.2. Solar Irrigation Pump Component ............................................................................... 142 4.2.1. Expected Effect from the Component ................................................................ 143 4.2.2. Implementation Structure ................................................................................... 143 4.2.3. Business Plan ...................................................................................................... 145 4.3. Solar Mini-Grid Component ........................................................................................ 147 4.3.1. Expected Effect from the Component ................................................................ 147 4.3.2. Implementation Structure ................................................................................... 148 4.3.3. Business Plan ...................................................................................................... 150 4.4. Gasification of Biomass Component ........................................................................... 151 4.4.1. Expected Effect from the Component ................................................................ 152 4.4.2. Implementation Structure ................................................................................... 152 4.4.3. Business Plan ...................................................................................................... 154 4.5. Biogas Power Generation Component ......................................................................... 155 4.5.1. Expected Effect from the Component ................................................................ 156 4.5.2. Implementation Structure ..................................................................................