Energy Development Solutions
Our country has been facing acute power crisis for quite some time now and is in dire need of building the capacities in terms of finance and technologies for the required development; as such, CEDB is playing a proactive role by finding the following solutions that have come in the way of our development process:
- Early stage development support:
Although the govt. issued many licenses for the development of hydropower, the desired level of progress could not be made due to the lack of financing and technical expertise of the license holders, so much so that the license holders were unable to even carry out the initial feasibility of the project. To address the situation, CEDB with the help of USAID came up with an innovative product, i.e. the CEDB Hydro Fund (CHF). This product raised NPR 230 Million from the general public and as of today it stands extremely successful with a total 100 MW worth of projects under various stages of development. CEDB believes that this endeavor will go a long way in the development of hydel power and will be a major mile stone for such progress in Nepal.
- Technological Support:
CEDB has been actively utilizing its in-house capability brought in by its energy experts for the Due diligence and feasibility studies of medium and small hydel power projects. In addition CEDB also has a strategic alliance agreement with DFCC Bank and DFCC Consulting Private Limited of Sri Lanka. Under this alliance, CEDB and DFCC Group are working jointly towards identifying, analyzing and exploring prospective hydel projects in Nepal. In addition, CEDB formed a Strategic Partnership Agreement with Northwest Hydro Consulting Engineers (NWH) - one of the world’s leading hydropower consulting companies from China. The agreement envisions fulfilling techno-financial analysis and a transfer of cost effective technology for medium and large size hydropower projects bringing together the Bank’s in-house expertise and the vast knowledge of NWH in this domain.
- Equity Support:
CEDB has inked an agreement with the renowned Dragon Capital Limited, a company based in Vietnam, for Mekong Brahmaputra Clean Development Fund (USD 100 million) for equity investment in hydropower projects. The agreement envisions to Identify, assess and finance quality hydropower projects in Nepal and Bhutan.
- Debt Financing:
CEDB has attempted to resolve the underlying constraints in funding options for hydel projects through local financial intermediaries in Nepal, limited to investment capabilities of a single 50 MW project or a total setup of 100 MW- by gaining access to debt financing support for large hydel projects through the international financial community.
- Early stage development support:
Carbon Emission Reduction Financing
CEDB has been working closely with GTZ-SHPP, AEPC and SNV for Clean Development Mechanism (CDM). It is also exploring the options of linking carbon revenues with its energy products and has partnered with Germany based KFW carbon fund and South Pole Carbon Assets Management, in the development of CDM-PIN (Project Identification Note) and PDD (Project Design Document). CEDB’s CDM project aims to encourage small and medium scale enterprises to adopt technologies that make a substantial contribution towards reducing fossil-fuel usage.
Energy Efficiency Cooperation
Energy Saved is Energy Generated. In line with this vision CEDB has taken an initiative to build awareness, identify technologies and arrange resources in this direction, whereby a position is created to save huge wastage of precious energy. To support this initiative, CEDB has signed an agreement with International Finance Corporation (IFC), a member of the World Bank Group, which promotes sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets and providing advisory services to businesses and governments.
The agreement includes training staff members to improve their skills when evaluating proposals on energy efficiency and renewable energy financing, as well as product development and marketing. It also involves engineering due diligence for energy efficient projects, benefits from IFC’s initiatives in Nepal on energy auditor development, market potential studies and targeted awareness with training activities related to sustainable energy finance.
Research and Usage of Energy Efficiency Technologies
- Electric Vehicle Financing
The story of the Nepalese SAFA (clean) Tempo – a three-wheel public transport, powered by electricity, also known as Electric Vehicle or the EV – began a decade ago. EVs were brought to replace the diesel powered three-wheelers from operating in the Kathmandu Valley. The US Asia Environmental Partnership (US-AEP) and Global Resources Institute (GRI), a US-based NGO, showed interest and successfully converted one diesel tempo to run on electric power. At the end of the pilot project in early 1996, a group of Nepali entrepreneurs bought the 7 EVs and started the first EV Company, Nepal Electrical Vehicle Industry (NEVI), in Kathmandu which is now one of the business partners of CEDB.
Today, with the expansion of the market for clean energy transportation, electric tempos have become a thriving business. There are currently 300-400 owners for more than 600 vehicles plying on the streets of the Kathmandu valley and 37 charging stations and five EV manufactures. The successful commercial operation of SAFA tempos and the financing by CEDB has made it economically viable to apply these cleaner technologies in Kathmandu and other parts of the country.
- Solar Financing
CEDB has been providing Solar Loan to different Solar Companies working under "Solar Energy Support Program" initiated by the Government of Nepal and supported by different donor agencies. CEDB has also entered into the rural solar energy market by using its wide network of Solar Companies and Micro Finance Institutions to facilitate rural electrification in remote parts of the country.
Nepal has been facing substantial energy deficit despite its abundance potential for renewable energy potential. Over the last 7 years power cuts have averaged 10 hours per day during winter/spring months. The Government has confirmed that this large energy deficit will continue for the foreseeable future. CEDB is devoted to countering load shedding by introducing the latest solar platforms and affordable financing solutions to empower the country.
- Biogas Financing
CEDB has been providing Biogas Loan to different Biogas Construction Companies working under "Biogas Support Program" initiated by the Government of Nepal and supported by different donor agencies. CEDB has been financing small scale biogas plant by using the wide networks of Biogas Construction Companies through vendor financing models.
- Micro Hydropower Projects
Nepal has over 6,000 rivers of length over 2 km. Therefore Mini and micro- hydro technology has enormous potential to promote environmentally sound sustainable development of Nepal. At present about 16 companies manufacture and install micro-hydro plants in Nepal. So far about 17.6 MW of power has been generated from about 3,000 micro-hydro plants including peltric sets. Most of these turbines are installed solely for agro- processing. Some of the units are also coupled with electric generators. CEDB has been providing affordable and flexible financing solutions to exploit this potential into the future.
- Husk Power Project
Nepal has immense potential for rice husk energy. The need of capitalizing this energy potential into electricity generation is more pressing at this time given the country's huge power deficit. Rice husk systems have been successfully demonstrated to be a clean form of technology, in India. CEDB is exploring the possibility of generating electricity using rice husk and has already signed an agreement with Husk Power Systems Pvt. Ltd., India - a company that has successfully implemented several Husk Power Projects in India. CEDB believes that this agreement will facilitate a convenient and lower cost rice husk technology to be made available to the people of Nepal; furthermore, the main advantage of the system is using rice husk which majority of the farmers consider as waste.
- Electric Vehicle Financing
In addition, CEDB is also committed to:
- Public awareness building
CEDB is principally focusing on the production and usage of clean energy from the country’s abundant natural resources. As a result, the bank has been creating awareness through its CSR program, the “Clean Circle”. This initiative has been established to make our societies cleaner, greener and more eco-friendly through conservation, minimization of waste and efficient usage of energy resources to curb global warming and climate change, while also advocating the multiple benefits of using our own natural resources over imported fossil fuel.
- Linkage between stakeholders
CEDB, with its various activities, is able to create linkage between government authorities, investors and technocrats, which is giving impetus to come to one forum for sustainable development of energy sector mainly hydro and solar power.
- International networking
CEDB, through its international association and its own effort, is playing a key role in creating positive awareness for the country’s energy sector for foreign investment. This has been possible due the bank being recognized in the international community - as a prominent Nepalese financial institution that specializes in facilitating the commercial use, of renewable energy and energy efficiency technologies within Nepal.
- Policy advocacy
CEDB has successfully been influencing, supporting and recommending the development of policies in establishments associated with energy such as the government, the central bank, the Nepal Electricity Authority and other developmental bodies - while trying to replicate the success of innovative technologies by assessing them in the Nepalese context. The bank has also been successful in persuading policy makers to incorporate various suggestions to mitigate financial hunches and technical difficulties on numerous fronts.
- Rural approach
CEDB has extended its services to various rural areas through its branch networking in Phidim (Panchthar), Katari (Udayapur) and Taplejung. The rural activity of the bank has also been extended through partnering with local financial institutions to provide services to the grass root levels of economy. CEDB has been in the forefront of combining microfinance activities with Renewable Energy Technologies (RETs) financing. CEDB has been providing microfinance loans to individual customers in rural areas for the installation of biogas plants, solar home system loans and financing micro hydro projects in association with the local community.
CEDB is also in the process of establishing a subsidiary - microfinance development bank that will focus on empowering the deprived population in the remote mountainous regions of Nepal. This institution will aim to facilitate economic capacity building in people who lack financial collateral through innovative microfinance products and access to affordable renewable energy technologies while socially mobilizing the communities in conjunction with various developmental intermediaries.
All of these activities have not only supported CEDB to become a devoted national level bank but have also made CEDB dedicate micro loans worth 100MW to rural activities, in the process.
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