UNDP and Renewable Energy

UNDP and Renewable Energy

UNDP’s focus areas in development assistance as agreed with the Executive Board, is described in the Multi Year Funding Framework (MYFF) 2004-2007 which covers all funded programmes from regular and other resources. The MYFF is divided into 30 services lines which span five “Goals”. These are:

1. Achieving the MDGs and reducing human poverty

2. Fostering democratic governance

3. Energy and environment for sustainable development

4. Crises prevention and recovery

5. Responding to HIV/AIDs

Within Goal 3, the third of six services line is 3.3 “Access to sustainable energy services” in the MYFF. Goal 3 is entitled “Energy and Environment for Sustainable Development” to communicate UNDP’s clear position that energy is not a sub-element of environmental programming and that energy is linked to all three aspects of sustainable development (economic, social and environmental outcomes). Energy priorities are further sub-divided into four categories, or outcomes (known as “core results”) that form the basis for country, regional and global programme development organization-wide. The four Core Results within Service Line 3.3 “Access to Sustainable Energy” are:

Core Result 1:            National policy frameworks that reflect the role of energy in poverty reduction and sustainable development established

Core Result 2:            Access to energy services, electricity or cleaner fuels in rural areas increased

Core Result 3:            Low emissions energy technologies including renewable energy, energy efficiency and/or advanced fossil fuel technologies introduced

Core Result 4:            Access to energy investment financing through the CDM or public private partnerships expanded

In our year 2004 reporting on country level outcomes and results, 70 countries reported results in the service line of access to sustainable energy services. Over 90% of country programme operations have energy and/or climate related projects in the current programming cycle. UNDP regular resources, cost sharing and the Thematic Trust Fund on Energy account for 40% of programme funding for energy while 60%, the largest share, is funding by the Global Environment Facility (GEF) and its associated cost sharing. There are a total of 217 active energy projects in UNDP, excluding the GEF Small Grants Programme. UNDP regular resources devoted to energy total $49 million while those from the GEF provide an additional $270 million. Including GEF leveraged co-financing, the total UNDP energy portfolio amounts to $1.36 billion in project assistance to developing countries. There are currently 153 full scale projects in renewable energy implemented by UNDP with a total programme value of $556 million including funding from all sources.

UNDP has a global network of over 400 professionals working in the energy and environment field at the New York, regional center and country level who are all connected through an electronic global knowledge network which can be used to field project specific questions or share experiences across regions.

The greatest area of concentration in the portfolio is for renewable energy and energy efficiency with core result area 3 representing about 40% of the total portfolio. The GEF funds the largest share of the renewable energy portfolio which leverages significant bilateral and government cost sharing. There are currently 153 full scale projects in this category implemented by UNDP with a total programme value of $556 million (including associated cost sharing), the largest portfolios in Asia ($201 million) and Latin America ($106 million) respectively. There were 33 projects funded by the GEF that were operational in 2004. In the MYFF 2004 report 41 of the 93 total results were reported in this category. Support for developing national renewable energy strategies was provided in Bolivia, Chile, Peru, Philippines, Syria, Thailand and Uzbekistan in this reporting year. UNDP programme activities in this area are addressed at reducing the negative environmental impacts associated with conventional fossil fueled electricity generation with the objective of mitigating greenhouse gas emissions. In many cases, UNDP renewable energy interventions also provide improved access to energy services. The GEF supported renewable energy projects also increasingly have a strong link with energy for productive uses, a further link to the poverty reduction agenda. Due to the strong link with the GEF in this programme area, baseline funding for related energy interventions from domestic resources are a significant additional component of all the projects supported.

Some examples of full scale GEF projects in the area of renewable energy include the support for a Biomass Energy Fund in Slovenia to replace fossil fuels through leveraging private sector investment in municipal energy projects ($12 million); support for commercial biomass generation and co-generation in Thailand ($6.8 million), the Bolivia Rural Electrification with Renewable Energy Project ($8.2 million), support for commercial wind energy market development in Mexico ($4.7 million) to install 2000 MW of additional capacity up to 2015 and support for grid connected wind energy in Tunisia. All of these projects include elements of resources assessment, pre-investment feasibility studies, technical assistance for energy planning and investment strategy development, and engagement with local financing institutions and government policy setters to address the legal and regulatory barriers related to renewable energy expansion, especially for power applications. For more information on the UNDP GEF portfolio see www.undp.org/GEF

In addition the UNDP led GEF Small Grants Programme (SGP) provides grants not exceeding $50,000 directly to communities through civil society organizations has an  energy portfolio of approximately 820 projects with a total disbursement to date of over $18 million spread across 50 countries. The largest concentration is in Africa ($5.4 million), followed by Asia Pacific ($4.1 million), Latin America ($4 million) Arab States ($3 million) and Eastern Europe ($1.7 million). Examples of GEF SGP projects include support for solar energy for crop drying and medicinal herbs processing in the Occupied Palestinian Territories, electrification and micro irrigation in Bolivia,, using PV to pump water to rural areas in Albania, solar powered water desalination in Mauritius, small hydro power in the mountains of Mindanao, Philippines, micro-hydro in the Dominican Republic to expand electricity for homes and school, and wind energy for water pumping in Egypt.

Bilateral funding is also channeled through the Thematic Trust Fund on Energy (TTF) to support strategic interventions in renewable energy that either build on GEF project or fund those activities linked to renewable energy that are excluded from GEF funding due to carbon offset criteria. This has led to an important increase in integrated energy projects combining funding sources, including UNDP regular resources. In the Philippines, for example, the TTF project finalized the design of the hybrid diesel-solar power system and started construction of the powerhouse to supply power to 200 households in Ijabay.  A cooperative society has also been established and trained through this project.  The TTF project in Sri Lanka successfully undertook demonstration projects on using biomass waste for energy purposes from various small and medium scale industries such as tea, lime, spice and brass melting.  The project will be exploring options for an acceptable tariff for biomass-based electricity generation.  In Uzbekistan, the TTF project led to educational, income-generation, and social gathering opportunities through installing of solar PV systems for water pumping and electricity.   The project has catalyzed momentum in the country to develop a national renewable energy strategy and demonstrated an approach that could lead to energy savings and the creation of a domestic and Central Asian markets through mass production in the future of PV systems. In China UNDP has supported a national renewable energy strategy with the support of the GEF and has contributed to the development of a national renewable energy portfolio standard. The TTF is also supporting a regional programme on renewable energy in the Pacific Islands.

In addition to project level interventions nationally in support of  domestic development efforts, UNDP also has produced a wide range on programming tools and analysis on energy linked to renewable energy, including lessons learned from the project portfolio. This includes an examination of the impact of PV project in Africa in term of income generation outcomes, a primer on  biomass energy technologies, an assessment of the linkage between energy and the MDGs and other studies used in global advocacy. These are all available on the UNDP website.

For more information on UNDP energy portfolio and for project briefs see www.undp.org/energy. You may also contact:

Susan McDade

Manager, Sustainable Energy Programme

UNDP – Energy and Environment Group

(212) 906 6085

susan.mcdade@undp.org