climate finance handbook - vasudha · 2014. 8. 13. · introduction – why this hand book? 1 2....

A

A HANDBOOK OF CLIMATE FINANCE

IN INDIA The Sources of Funding, Usage Patterns, Actual Flows,

Estimated Financing Needs

And

The Politics of Climate Policy Decision Making in India

Supported by

HEINRICH BÖLL FOUNDATION- INDIA AND NORTH AMERICA

(DRAFT)

A Handbook of Climate Finance in IndiaMay 2014

Authors: Srinivas Krishnaswamy, Siddharth Chatpalliwar, Sunita Dubey

Research: Ankit Gupta, Sumana Dutta

Disclaimer: The views expressed in this document are based on the collection and analysis of the data/information by

Vasudha Foundation. The views do not necessarily refl ect the views of Heinrich Böll Foundation. Vasudha

Foundation and Heinrich Böll Foundation do not accept any responsibility for the consequences of the

use of the information in this document.

Vasudha Foundation (India)

CISRS House, 14 Jangpura B, Mathura Road

New Delhi – 110 014, India

www.vasudha-india.org

Tel/Fax: + 91-11-2437-3680

Regd. Offi ceNo. 12, 9th Main, Banashankari-II stage

Bangalore – 560 070, India

Tel/Fax: +91-80-2671 7186

Vasudha Foundation (United States)

Washington DC (Metro Area)

1825 Saint Boniface Street

Vienna, VA 22182

USA

A HANDBOOK OF CLIMATE FINANCE

IN INDIA The Sources of Funding, Usage Patterns, Actual Flows,

Estimated Financing Needs

And

The Politics of Climate Policy Decision Making in India

( D R A F T )

III

TABLE OF CONTENTS

1. Introduction – Why this Hand book? 1

2. Global Overview of Climate Finance 4

3. The Structure of Climate Finance in India 9

3.1 Overview of Climate Policy in India 9

3.2 India’s Position at the Climate Negotiations 9

3.3 Impact of Climate Change in India and an Assessment of Financial Needs 10

3.4 The Institutional, Governance, and Policy Structure of Climate Finance in India 12

3.5 Mapping of Various Stakeholders and their role in Climate Finance in India 13

4. Domestic Climate Finance Flows 16

4.1 National Budgetary Flows 16

4.2 State Budgetary Flows 17

4.3 Global and Domestic Direct Market Mechanisms 17

5. International Climate Finance Flows 21

5.1 Overview of Bi-lateral and Multi-lateral Project Financing in India: 21

5.1.1 The Sources of Foreign Financial Flows 21

6. The Adaptation and Mitigation Balance of all Financial Flows (Domestic and International) 24

6.1.1 Domestic Budgetary Allocation 24

6.1.2 Bi-lateral and Multi-lateral Grants 26

6.1.3 Bi-lateral and Multi-lateral Loans 26

6.1.4 Bi-lateral and Multi-lateral Technical Assistance 26

6.2 Profi le of Adaptation Projects (Sectors and Coverage) 27

6.2.1 Profi le of Adaptation Related Grants 28

IV | A HANDBOOK OF CLIMATE FINANCE IN INDIA (DRAFT)

6.2.2 Profi le of Adaptation Related Loans and Technical Assistance 28

6.3 Profi le of Mitigation Projects 28

6.3.1 Profi le of Mitigation Related Grants 29

6.3.2 Profi le of Mitigation Related Loans and Technical Assistance 29

6.4 Analysis of Adaptation and Mitigation Project Profi les – Alignment of external fi nancial fl ows in relation to

India’s climate priorities 29

6.5 Financial Flows in Relation to Assessed Financial Needs and Outlays 32

7. Key Findings 33

8. Recommendations 35

Annexes 37

Annex I: Bi-laterally and Multilaterally Funded Adaptation Projects (Grants) 38

Annex II: Bi-laterally and Multilaterally Funded Adaptation Projects (Loans) 39

Annex III: Bi-lateral and Multilaterally Technical Assistance Projects for Adaptation 41

Annex IV: Bi-laterally and Multilaterally Funded Mitigation Projects (Grants) 46

Annex V: Bi-laterally and Multilaterally Funded Mitigation Projects (Loans) 50

Annex VI: Bi-lateral and Multilaterally Technical Assistance Projects for Mitigation 55

Annex VII: Note on the Green Climate Fund 63

V

ADB Asian Development Bank

AF Adaptation Fund

BEE Bureau of Energy Effi ciency

CCFU Climate Change Finance Unit

CDM Clean Development Mechanism

CIFs Climate Investment Funds

COP Conference of Parties

CPI Climate Policy Initiative

DFID Department for International Development

FSF Fast Start Finance

GCF Green Climate Fund

GEF Global Environment Facility

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

IEA International Energy Agency

LDCF Least Developed Countries Fund

MoEF Ministry of Environment and Forests

MRV Measuring, Reporting, and Verifi cation

NAMA Nationally Appropriate Mitigation Action

NAP National Adaptation Plan

NAPCC National Action Plan on Climate Change

NCEF National Clean Energy Fund

ODA Offi cial Development Assistance

PAT Perform Achieve Trade

PRGF Partial Risk Guarantee Fund

REC Renewable Energy Certifi cate

RPO Renewable Purchase Obligation

ABBREVIATIONS

VI | A HANDBOOK OF CLIMATE FINANCE IN INDIA (DRAFT)

SAPCC State Action Plan on Climate Change

SCCF Special Climate Change Fund

SDC Swiss Agency for Development and Cooperation

SIDA Swedish International Development Agency

UNDP United Nations Development Programme

UNFCCC United Nations Framework Convention on Climate Change

USAID United States Agency for International Development

VCFEE Venture Capital Fund for Energy Effi ciency

WRI World Resources Institute

1

One of the most critical issues that need to be addressed in an “Equitable Framework to Address Climate Change”

is with regards to “Climate Finance” as a critical means of implementation. This has prime relevance not only in the

context of a Global Climate Framework to be agreed by 2015, which is currently being negotiated in the UN Framework

Convention for Climate Change (UNFCCC), but also in the context of the ongoing negotiations on a post-2015 frame-

work with Sustainable Development Goals (SDGs).

A signifi cant step towards creating a fund to address climate change as a global effort was achieved at the 17th Confer-

ence of Parties (COP) of the UNFCCC, through the formal launch of the Green Climate Fund (GCF).

One of the key objectives of the fund is to promote, and enable countries to make a paradigm shift towards low-emis-

sion, climate resilient and gender sensitive development pathways by providing adequate resources to meet the full

and incremental costs of such pathways. The fund is also mandated to ensure that there are new, additional, adequate

and predictable fi nance resources made available to developing countries by fi nding innovative fi nancing solutions.

Additionally it also aims at fi nding ways and means to raise the funds through a combination of public and private

fi nancing options.

The GCF has met 6 times since its 24-member board was constituted and is working towards full operationalization

by early 2015. One of the key decisions that was taken by the GCF board, in line with the Durban meeting outcome is

that any funding approach that the GCF would adopt will have to be a country driven process, with priorities for funding

being in line with country owned priorities as articulated in national climate change and development plans including

Nationally Appropriate Mitigation Actions (NAMAs) and National Adaptation Plans (NAPs). While this focus on country-

ownership is a step in the right direction, it also puts onus on the individual countries to commit to comprehensive

multi-stakeholder processes as a critical mechanism that determines the national priorities for climate fi nancing.

Although a lot of international attention is on the GCF as a future key multi-lateral fund, the existing global climate fi -

nance architecture is already composed of several climate funds and instruments, along with a number of bi-lateral and

multi-lateral programs aimed at addressing climate change. It also needs to be pointed out here that, India happens

to be one of the largest benefi ciaries of some of these programs, projects and funds, especially for mitigation fi nance.

Policy formulation on climate fi nance in India is primarily under the purview of the Ministry of Environment and Forests

(MoEF), with some role being played by the Ministry of Finance, which has a dedicated Climate Change Finance Unit

(CCFU). The Ministry of External Affairs plays a role in the actual negotiations of issues under the UNFCCC.

While there are a number of civil society groups within India that follow the climate negotiations, there are very few

groups that follow climate fi nance or proceedings of the GCF consistently and with a focus on technical input and

WHY THIS HAND BOOK?

01

2 | A HANDBOOK OF CLIMATE FINANCE IN INDIA (DRAFT)

specialized advocacy. This can be explained by the limited capacities of the civil society groups in understanding the

various complex issues around climate fi nance. This capacity dilemma is a problem, as civil society groups play a

crucial role in holding countries to account for constructive and proactive engagement on climate fi nance. Within the

ongoing operationalization of the GCF, such engagement is important particularly to ensure that funding structures are

created that will ensure that allocations are made for the most appropriate projects. As fi nancial inputs to the GCF are

discussed, it is also important that countries consider innovative forms of fi nancing the GCF over and above core public

fi nance contributions that the developed countries are expected to make towards the GCF.

In the backdrop of the above, this hand-book has been designed as a guide for civil society groups, and other stake-

holders in India to understand the various issues around climate fi nance needs and fl ows specifi c to the Indian con-

text. Such knowledge and background information is essential to fulfi l the potential of Indian civil society groups to

meaningfully engage in the process. This handbook seeks to analyze the current institutional and governance structure

for climate fi nance in India. Additionally, it also seeks to assess the actual fl ows of fi nance received for addressing

mitigation and adaptation in India, against the climate fi nance needs identifi ed by the central and state governments.

In our belief, this handbook will provide much-needed information to civil society groups to play a more active role in

the arena of climate fi nance particularly,

a) To ensure that in a country driven process, climate fi nancing will be prioritized for projects that clearly promote

sustainable development, and put the country on a pathway which is low-carbon, climate resilient and gender sen-

sitive.

b) To build capacities of various civil society groups to eventually monitor the implementation of climate fi nance pro-

jects/programmes in India, specifi cally those funded by the GCF.

c) In infl uencing the various bi-lateral and multi-lateral initiatives on climate change in India to truly contribute to the

overall objective of promoting low emission, climate resilient and gender sensitive development.

MethodologyA multi-pronged approach consisting of both primary and secondary research was adopted for developing this hand

book. Our strategy for this mapping exercise included one-on-one interviews with various stakeholders to understand

their perspective on issues related to climate fi nance policy in India.

For arriving at the climate fi nancing needs (total amount of fi nance required), and the sources of actual fi nancing

received in India; we followed a combination of desk research and in person meetings with personnel from key agen-

cies, departments and ministries, along with representatives of various multi-lateral and bi-lateral agencies supporting

climate related initiatives in India. We also approached state government offi cials, and key agencies involved in the

preparation of the state climate action plans. It should be noted that the climate fi nance fl ows analyzed in this report

consist of public fi nance only. Private fi nance has not been covered due to limited availability of information.

For the purpose of this mapping, representatives of the following multi-lateral and bi-lateral agencies (currently active

in India with climate-related projects and programs) were interviewed for gathering information on climate fi nance:

1. United States Agency for International Development (USAID)

2. Department for International Development (DFID) and British High Commission

3. Swiss Agency for Development and Cooperation (SDC)

4. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

5. Kreditanstalt für Wiederaufbau, KfW (Germany)

6. World Bank

7. Asian Development Bank (ADB)

3

8. United Nations Development Programme (UNDP)

9. Global Environment Facility (GEF)

10. Swedish International Development Agency (SIDA)

11. Norwegian Assistance Agency for Development Cooperation (NORAD)

12. Australian-Aid (Government of Australia)

13. European Commission (EC)

14. International Development Research Center (IDRC, Canada)

15. Clean Development Mechanism (CDM)

In mapping fi nancial fl ows from bi-lateral and multi-lateral sources towards climate change adaptation and mitigation,

we only assessed projects that were specifi cally focused on addressing climate change. This of course may not give the

full picture of the actual fi nancial fl ows from the international sources, which contribute to addressing climate change.

This is because there are many projects, where the primary focus is on other issues such as livelihoods or poverty al-

leviation but they may also have project components and fi nance allocations, which could help communities adapt to

climate change. In the past years, many traditional development agencies have made increasing efforts to mainstream

climate change considerations into their development projects, in effect attempting to “climate-proof” their develop-

ment investments. And of course, particularly in the area of adaptation and resilience building, the differentiation

between classical development spending and expenses toward adaptation is more fl uid. However, for the purpose of

this analysis, since the exact fi nancial allocation for such climate-relevant components of a development programme

are not available or calculated, it cannot be accounted for in this handbook. Instead the focus is on dedicated climate

fi nance expenditures in India.

One example of such possible omission is with the case of the “Poorest Area Civil Society Programme (PACS)” of the

Department for International Development, UK. The PACS programme is a classic development programme focused on

livelihoods and poverty alleviation. However, recently a component to the programme aiming to enhance the adaptive

capacities of communities to climate change was introduced.


Globally, there is no concrete defi nition of climate fi nance, however, for a simplifi ed understanding, climate fi nance can

be labeled as the fl ow of funds from developed to developing nations to help them reduce their emissions and adapt

to climate change. Climate fi nance has been a central element of global climate negotiations. Under the UNFCCC,

developed country Parties (listed under Annex I) areobligated to spearhead global emissions reductions; a subset of

developed countries, namely those identifi ed in Annex II, have also obligations under the Convention to provide “new

and additional fi nancial resources” to developing countries to help them address climate change. Article 4.3 of the

UNFCCC establishes that the developed country Parties in the Convention’s Annex II shall provide new and additional

fi nancial resources to meet the agreed full costs incurred by developing country Parties in complying with their obliga-

tions under the convention. It also states developed country Parties shall also provide such fi nancial resources, includ-

ing for the transfer of technology, needed by the developing country Parties to meet the agreed full incremental costs

of implementing climate change measures.

According to the Climate Policy Initiative’s (CPI) report titled ‘Global Landscape of Climate Finance 2013’, global cli-

mate fi nance fl ows for the year 2012 consisted of USD 359 billion1. Although these fl ows indicate an increase over the

previous years, they are still falling short of the existing investment needs. Another important aspect to be considered

in the climate fi nance debate is that the total climate fi nance fl ows should not be confused with the USD 100 billion

pledge of developed countries per year by 2020, as stipulated by the Copenhagen Accords of 2009. The developing

countries have consistently raised the demand that climate fi nance has to be new and additional. However, ,the CPI

numbers include not just public fi nance transfers from developed to developing countries, but also developing country

domestic resources and private fi nance fl ows as well. Indeed, most of the fi nance in the total fi gure of USD 359 bil-

lion is not necessarily new and additional money fl owing from developed to developing countries. To an overwhelming

extent, it consists of private sector investments and not public climate fi nance support as obligated under the UNFCCC.

An additional imbalance of these fi nancial fl ows is that out of the USD 359 billion fl ows in 2012, USD 337 billion (ap-

proximately 94%) fl owed to support climate change mitigation, whereas only USD 22 billion (approximately 6%) fl owed

to support adaptation. Practically all of this adaptation support was in form of public fi nance, highlighting the impor-

tance of public support for adaptation. Developed countries have committed to a balanced allocation between adapta-

tion and mitigation as part of the Copenhagen Accords and the Cancun Agreements. However, the gap in international

public fi nance for adaptation can be gauged from the fact that during the Fast Start Finance period (2010-12) devel-

1 “Global Landscape of Climate Finance 2013’ Climate Policy Initiative.” Accessed December 5, 2013. http://climatepolicyinitiative.org/publication/global-landscape-of-climate-fi nance-2013/

GLOBAL OVERVIEW OF CLIMATE FINANCE

02

5

oped countries contributed around USD 6 billion,2 which was approximately 21 percent of the total volume of fi nance3.

Similarly, funding by bilateral funding institutions over the 2008-09 period had a 70/30 split in favor of mitigation4.

Several funds supporting climate change mitigation and adaptation already exist under the UN Framework Convention’s

fi nancial mechanism and the Kyoto Protocol. These are as follows:

Global Environment Facility (GEF) - The GEF is an operating entity of the fi nancial mechanism of the UNFCCC. An

independently operating fi nancial organization, the GEF provides grants for projects related to biodiversity, climate

change, international waters, land degradation, the ozone layer, and persistent organic pollutants. Since 1991,

GEF has achieved a strong track record with developing countries and countries with economies in transition,

providing USD 11.5 billion in grants and leveraging USD 57 billion in co-fi nancing for over 3,215 projects in over

165 countries. Through its Small Grants Programme (SGP), the GEF has also made more than 16,030 small grants

directly to civil society and community based organizations, totaling USD 653.2 million5.

2 “Th e Global Climate Finance Architecture- Climate Funds Update.” http://www.odi.org.uk/sites/odi.org.uk/fi les/odi-assets/publications-opinion-fi les/8685.pdf

3 ‘Adaptation and the $ 100 billion commitment’, Oxfam, November 2013 http://www.oxfam.org/sites/www.oxfam.org/fi les/ib-adaptation-public-fi nance-climate-adaptation-181113-en_0.pdf

4 ‘Bilateral Finance Institutions and Climate Change: A Mapping of 2009 Climate Financial Flows to Developing Countries’, United Nations Environment Program (UNEP), 2010 http://www.unep.org/pdf/dtie/BilateralFinanceInstitutionsCC.pdf

5 “What Is the GEF | Global Environment Facility.” http://www.thegef.org/gef/whatisgef.

Figure 1 – Landscape of global climate fi nance.2


The GEF also serves as a fi nancial mechanism for the Convention on Biological Diversity, UN Convention to Combat

Desertifi cation, and the Stockholm Convention on Persistent Organic Pollutants. There are some specifi c funds under

the GEF, which cater to climate change fi nancial needs. These are listed below:

a) Special Climate Change Fund (SCCF) - The Special Climate Change Fund (SCCF) was established under the Convention

in 2001 to fi nance projects relating to: adaptation; technology transfer and capacity building; energy, transport,

industry, agriculture, forestry and waste management; and economic diversifi cation. This fund complements other

funding mechanisms for the implementation of the UNFCC objectives.

b) Least Developed Countries Fund (LDCF) - The LDCF was made operational in 2002, and aims to address the needs

of the 49 LDCs which are particularly vulnerable to the adverse impacts of climate change. As a priority, the LDCF

supports the preparation and the implementation of the National Adaptation Programs of Action (NAPAs), which

are country-driven strategies that identify the immediate needs of LDCs in order to adapt to climate change.

c) Adaptation Fund (AF) - The Adaptation Fund was established in 2001 to fi nance concrete adaptation projects and

programs in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects

of climate change. This Fund is fi nanced by voluntary contributions from developed country Parties as well as

from a share of proceeds from the Clean Development Mechanism (CDM) project activities and other sources of

funding. The share of these proceeds amounts to 2% of certifi ed emission reductions (CERs) issued for a CDM

project activity.

In 2007, a review entitled ‘Report on the analysis of existing and potential investment and fi nancial fl ows relevant to the

development of an effective and appropriate international response to climate change’ conducted by the secretariat of

the UNFCCC, one of the key fi ndings that emerged was that the existing climate funds and funding mechanisms under

the UNFCCC and the Kyoto Protocol are insuffi cient.6

Over the years, several other dedicated climate funds and fi nancing instruments have emerged outside the UNFCCC

regime. Some of them are as follows:

Australia’s International Forest Carbon Initiative

World Bank’s portfolio of Climate Investment Funds consisting of

a) Clean Technology Fund

b) Forest Investment Program

c) Pilot Program on Climate Resilience

d) Scaling Up Renewable Energy Program

Congo Basin Forest Fund

Forest Carbon Partnership Facility

Norway’s International Climate and Forest Initiative

Germany’s International Climate Initiative

United Kingdom’s International Climate Fund

The existing sources and governance of climate fi nance have been widely debated since the 2009 climate change sum-

mit in Copenhagen, where industrialized countries committed to giving USD 100 billion a year in additional climate

fi nance from 2020 onwards. To get things going, immediate ‘Fast-Start’ Finance (FSF) of up to USD 30 billion was

promised under the Cancun Agreements beginning in 2010 until the end of 20127.

Developed countries have pledged over USD 33 billion in Fast Start Finance during this three year period, exceeding

the pledges made at Copenhagen in 2009. According to an analysis of the Fast Start Finance period by the World

Resources Institute (WRI), developed countries have increased their expenditure relative to the pre-2010 period. The

6 “Fact Sheet: Financing Responses to Climate Change.” http://unfccc.int/press/fact_sheets/items/4982.php.7 Institute, Grantham Research. “What Is Climate Finance and Where Will It Come From?” Th e Guardian, April 4, 2013. http://www.theguardian.

com/environment/2013/apr/04/climate-change-renewableenergy.

7

United Kingdom increased its climate fi nance four-fold relative to environment-related spending before the FSF period.

Germany nearly doubled its climate-related fi nance. Japan previously mobilized USD 2 billion per year in climate fi -

nance through the Cool Earth Partnership; under FSF, it reported an average spending of more than USD 5 billion per

year. Finally, through its Global Climate Change Initiative, the United States increased core climate funding from USD

316 million in FY-09 to an average of USD 886 million per year in FY-10 to FY-128. However, questions were raised on

how much of the contributed amounts was new and additional rather than repurposed or re-labeled, for example from

traditional development expenditures.

The discussion on climate fi nance moved in a new direction at the 16th Conference of Parties (COP) held in 2010

at Cancun, Mexico with the establishment of the Green Climate Fund (GCF). The GCF, which is currently still under

operationalization, is like the Global Environment Facility (GEF), an operating entity of the fi nancial mechanisms of the

UN Framework Convention on Climate Change. . The GCF with its headquarters in Songdo, South Korea is intended to

be a key source of channeling new, additional, adequate, and predictable fi nancial resources to developing countries. It

also seeks to catalyze climate fi nance, both public and private, at both the international and national levels. The Fund

will pursue a country-driven approach, and promote, and strengthen engagement at the country level through effective

involvement of relevant institutions and stakeholders. Additionally the fund also seeks to maintain a balance between

funding for mitigation and adaptation, while promoting environmental, social, economic, and development co-benefi ts,

and taking a gender-sensitive approach. Expected to be fully operationalized by early 2015, the GCF is supposed to

become a signifi cant source of multi-lateral adaptation fi nance and the most important multilateral channel for the

fulfi llment of the pledge of developed countries in Copenhagen to provide annually US$ 100 billion by 2020 to devel-

oping countries. Initial resource mobilization for the GCF is scheduled to start in Fall 2014; so far, the GCF has only

received very limited funding to support developing countries in preparatory and readiness work to engage with the

GCF in the future.

Despite the existence of the above-mentioned climate fi nance mechanisms, little progress has been made on certain

crucial aspects of the fi nancing debate such as on ‘new and additional sources’. The global climate fi nance architecture

continues to be dominated by bilateral aid agencies and international development institutions, such as the World Bank

through its Climate Investment Funds (CIFs). In order to fi nd the best sources of climate fi nance, a High Level Advisory

Group (HLAG) was constituted in 2010 by the UN Secretary General Ban Ki-Moon. The fi ndings of the group concluded

that a combination of sources including aid-style government pledges, market levies and possible new sources such as

taxes on international aviation and shipping were needed. A large share of income would also have to come from the

private sector through mechanisms like carbon trading.

8 “Summary of Developed Country ‘Fast-Start’ Climate Finance Pledges | World Resources Institute.” http://www.wri.org/publication/summary-developed-country-%E2%80%98fast-start%E2%80%99-climate-fi nance-pledges.


3.1 Overview of climate policy in IndiaIndia has undertaken several efforts domestically towards climate change adaptation and mitigation, though most of

these actions are not necessarily under the umbrella of climate change actions. Policy making around climate change

is mainly driven by the pursuit of development goals. Even though various studies have shown that India faces a high

risk from the impacts of climate change, the government is focused upon addressing issues such as improving energy

security, greater energy access, and reducing expensive energy imports. Concerns surrounding energy have made the

government look at renewable energy, and policies and actions stemming from such concerns have resulted in address-

ing the challenges of climate change as a co-benefi t. However, at the same time the government continues to favor

conventional sources of power generation.

Most national policies pertaining to climate change have been developed recently, keeping India’s energy needs in

mind. Prominent examples of such recent initiatives are the Jawaharlal Nehru National Solar mission and the National

Mission on Enhanced Energy Effi ciency being implemented as part of the National Action Plan on Climate Change.

At the international level, India has voluntarily committed to reducing the emissions intensity of its economy by 20%

to 25% by 2020 as part of the Cancun Pledge made in 2010.

3.2 India’s Position at the Climate NegotiationsIndia’s negotiating position is often crafted by the environment and external affairs ministries, and it promotes the pri-

macy of public funds over private for helping developing countries tackle climate change. Indian climate position has

always put the responsibility of bringing down emissions to acceptable levels on the industrialized countries, and op-

poses the plan to reduce emissions in the period up to 2020 through international initiatives focused on black carbon,

agricultural methane, energy effi ciency, and refrigerants like hydrofl urocarbons (HFCs).

While in the UNFCCC negotiations, India has always maintained that it would not seek any funding for adaptation

related activities for itself, it nevertheless has been a strong supporter for developing countries’ demands for making

more public fi nance available for adaptation related activities for developing and especially least developed countries.

India is also vocal in demanding that industrialized countries should come to the UNFCCC negotiations with a plan and

a pathway; and pledge new and additional fi nance to meet the agreed USD 100 billion per year by 2020. In one of its

submissions to the UNFCCC, India stated that in the context of the Durban Platform negotiations, developing countries

THE STRUCTURE OF CLIMATE FINANCE IN INDIA

03

9

“could enhance their mitigation actions, depending upon provision of fi nance, technology and capacity building sup-

port by developed countries Parties9.”

3.3 Impact of Climate Change in India and an Assessment of Financial Needs

As Mr. Jairam Ramesh, the former Minister for Environment and Forests, wrote in the preface to a report titled Climate Change and India: A 4x4 Assessment,10 by the Ministry of Environment and Forests,

“As I have said in the past, no country in the world is as vulnerable, on so many dimensions, to climate change as India. Whether it is our long coastline of 7,000 kms, our Himalayas with their vast glaciers, our almost 70 million hectares of

forests (which incidentally house almost all of our key mineral reserves) – we are exposed to climate change on multiple

fronts. Rigorous science based assessments are therefore critical in designing our adaptation strategies.”

The Former Minister’s statement expresses a perception that many Indians, including policy makers, share, namely that

India has reasons to be concerned about climate change. Its large population depends upon climate-sensitive sectors

such as agriculture and forestry for their livelihoods. Any adverse impact on water availability due to recession of gla-

ciers, decrease in rainfall and increased fl ooding in certain pockets will threaten food security, cause dieback of natural

ecosystems including species that sustain the livelihood of rural households, and adversely impact the coastal system

due to sea-level rise and increased extreme events. In addition, climate change impacts threaten the achievement of

vital national development goals related to other systems such as habitats, health, energy demand, and infrastructure

investments.

In the Working Group-2 component of the Fourth Assessment Report of the Intergovernmental Panel on Climate Change

(IPCC) in 2009, most of India’s peninsular regions are considered to be most vulnerable to climate change. In a map

that was released with the study11 on a scale of 5, from the lowest to highest, the map shows the vulnerability of vari-

ous districts of the country to climate change, and in fact some districts face a higher risk of climate change impacts

in comparison to other districts. The map is shown below in Figure 2.

Figure 2- Vulnerability Map of India11a

9 Government of India submission on the Durban Platform for Enhanced Action, 28th February 2012, https://unfccc.int/fi les/documentation/submissions_from_parties/adp/application/pdf/adp_india_28022012.pdf

10 Source: http://moef.nic.in/downloads/public-information/fi n-rpt-incca.pdf11 Assessment of adaptation practices, options, constraints and capacity. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution

of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change Source: http://www.ipcc.ch/pdf/assessment-report/ar4/wg2/ar4-wg2-chapter17.pdf11a Ibid.


As a developing country, India faces a number of development challenges. One of the key challenges is to lift close

to 37 percent of its population out of absolute poverty levels; this large population segment has also extremely low

adaptation capabilities12. The second important challenge for India is to ensure that every Indian has access to good

quality infrastructure. The challenges imposed by climate change exacerbate diffi culties in the realization of these

development mandates. At the same time India has to deal with climate change and its impacts on a war footing and

move towards climate proofi ng its development efforts

To address some of its adaptation challenges, the Government of India spent (through public funds) an estimated 2.6%

of its GDP13 in 2009-2010, which is roughly equivalent to 2348 million USD. However, this is far below what is needed

for carrying out meaningful adaptation measures. In addition, none of this spending is exclusively for adaptation, but

on development programmes that have an adaptation co-benefi t. Finally, these numbers are for actual expenditure and

do not include expenditures projected under various activities envisaged under the National Action Plan on Climate

Change for that year, many of which remain unimplemented because of a paucity of funds.

While there are no exact fi gures of the fi nancial requirements to meet the adaptation and mitigation requirements of

India, the Planning Commission of India has estimated the total costs of implementing the National Action Plan on Cli-

mate Change at Rs. 2300 Billion or approximately USD 37.16 Billion. The estimated costs are for all the programmes

and activities envisaged in each of the 8 identifi ed missions. In view of this huge funding requirement yet another big

challenge for the country is to leverage additional domestic resources of fi nance to address climate change adaptation

and mitigation requirements.

The following table gives an overview of the fi nancial requirements as estimated by the Planning Commission.

Table 1- Implementing agencies and fi nancial outlays of the NAPCC14

S. No.

Na onal Mission and Nodal Agency Features of the mission Financial Outlay for the mission

1. Mission-Jawahar Lal Nehru Na onal Solar Mission

Nodal Agency- Ministry of New and Renewable Energy

Launched on January 11, 2010 the mission aims at increasing the share of solar energy in India’s energy mix. The mission seeks a capacity addi on of 20 GW of grid connected solar energy by the end of the 13th Five year plan in 2022. The mission also has a research and development program which addresses challenges in promo ng solar energy in India.

The mission is being implemented in three phases, with the fi nancial outlay for the fi rst phase being Rs. 4337 Cr. Financial requirements for the second phase will be assessed a er implementa on of the fi rst phase has been reviewed.

2. Mission- Na onal Mission for Enhanced Energy Effi ciency

Nodal Agency- Ministry of Power/Bureau of Energy Effi ciency

Under implementa on from April 2010, the mission seeks to enhance eff orts at crea ng a market for energy effi ciency. The mission seeks the development of a policy and regulatory environment that will promote the adop on of energy effi cient measures. The mission expects that by about 2015, about 23 million tons of oil-equivalent of fuel savings – in coal, gas, and petroleum products, will be achieved every year along with an expected avoided capacity addi on of over 19 GW.

The total requirement projected under the Mission between 2010- 2012 is Rs. 425.35 crores.

3. Mission- Na onal Mission on Sustainable Habitat

Nodal Agency- Ministry of Urban Development and Ministry of Housing and Urban Poverty Allevia on

The mission promotes energy effi ciency in buildings, management of solid waste and modal shi to public transport op ons based on bio-diesel and hydrogen.

The total cost es mate projected in the Mission Document is Rs.1000 crore. During the 11th Plan, expenditure of Rs.50 crore was incurred and remaining Rs.950 crores is to be incurred during the 12th Five Year Plan.

12 http://planningcommission.nic.in/data/datatable/1612/table_95.pdf13 Source- Climate Change Finance Unit, Ministry of Finance, GoI14 Report of the Sub-Group on Climate Change, Planning Commission, Government of India

11

S. No.

Na onal Mission and Nodal Agency Features of the mission Financial Outlay for the mission

4. Mission- Na onal Water Mission

Nodal Agency- Ministry of Water Resources

The Na onal Water mission seeks to promote measures such as rainwater harves ng and ground water recharging; thereby reducing wastage of water and increasing conserva on and equitable distribu on within and across the states of India.

The total es mated addi onal fund required for implemen ng the Mission is Rs.89, 101crore during the 11th and the 12th Five Year Plan period. This includes expenditure on schemes implemented through the State Plans and the Central Plan.

5. Mission- Na onal Mission forSustaining theHimalayan Ecosystem

Nodal Agency- Ministry of Science and Technology

This mission seeks to safeguard the Himalayan glacier and mountain eco-system. Key components of the mission include Biodiversity conserva on and protec on, Wildlife conserva on and protec on, Tradi onal knowledge socie es and their livelihood, Planning for sustaining for the Himalayan Ecosystem. It also seeks to study the link between glacier movements and climate change.

Rs. 550 crore has been sanc oned under the 12th plan period for achieving the mission objec ves.

6. Mission- Green India Mission

Nodal Agency- Ministry of Environment and Forests

This mission through aff oresta on on degraded forest land focuses on enhancing eco-system services and carbon sinks.

An es mated expenditure of Rs. 46,000 crore is projected for the Mission over the next 10 years.

7. Mission- Na onal Mission for Sustainable Agriculture

Nodal Agency- Ministry of Agriculture and Coopera on/ Department of Agricultural Research and Educa on (DARE)

The agriculture mission seeks to ensure food security; and protect land, water, biodiversity, and gene c resources for sustainable produc on of food. Under the mission strategies will be developed to make Indian agriculture more resilient to climate change, and improving the produc vity of rain-fed agriculture.

The proposed adapta on and mi ga on ac vi es under the Mission require an addi onal budgetary support of Rs.1,08,000 crore at current prices up to the end of the 12th plan.

8. Mission- Na onal Mission on Strategic Knowledge on Climate Change

Nodal Agency- Ministry of Science and Technology

This mission seeks to promote research and technology development for understanding and addressing the various challenges presented by climate change.

Rs. 150 crores is required in the 11th plan period for implemen ng the Mission ac vi es. Provision of Rs. 2500 crores is to be made under the 12th plan period.

In a recent development, the Ministry of Environment and Forests (MoEF) of the Government of India, mandated every

state to prepare a State Climate Action Plan, which could be implemented to complement the activities and pro-

grammes envisaged in the National Action Plan on Climate Change (NAPCC). The states were also mandated to prepare

detailed budgetary estimates to implement the plans.

Out of a total of 29 states in India, 22 states have come up with draft Action Plans for Climate Change. The MoEF has

approved the action plans of 14 states as of February 2014. The total cost of implementing the climate actions plans

of the 14 states amounts to Rs. 2009 Billion for the period between 2012-2017, translating to approximately USD

31 Billion. The estimated amount required for adaptation related activities is Rs. 1089 Billion, or USD 16.75 Billion.

The table below gives an overview of the cost estimates of implementing the State Climate Action Plans in the 14 states

of India which have government-approved climate actions plans.


Table 2 - Cost estimates for implementing State Climate Action plans15

State Geographic Area (in Km2)

Popula on (in Million)

Adapta on Budget (in Rs. Million)

Mi ga on Budget (in Rs. Million)

Extra Cost (in Rs. Million)

Total Budget (in Rs. Million)

Arunachal Pradesh

83,743 1,382,611 71591 40605.4 1122 113318.4

Assam 78,438 31,169,272 69070 29600 - 98670

Haryana 44,212 25,353,081 107770 453259 5600.5 588871.5

Himachal Pradesh 55,673 6,856,509 8450 2300 4850 15600

Karnataka 191,791 61,130,704 247380 12300 - 258680

Madhya Pradesh 308,245 72,597,565 37160 8960 415 46535

Manipur 22,327 2,721,756 21883.8 17188.7 - 39072.5

Meghalaya 22,429 2,964,007 25568.1 37403.12 - 62971.22

Nagaland 16,579 1,980,602 12987.85 25052 1225 39264.85

Odisha 155,707 41,947,358 88920 81400 - 170320

Mizoram 21,081 1,091,014 13931.47 13988.76 - 27920.23

Sikkim 607,688 7,096 268841.2 133 - 268974.2

U arakhand 53,483 10,116,752 18121.183 113809.57 10 131940.753

West Bengal 88,752 91,347,736 97920 49000 - 146920

Total 1,750,148 350,666,063 1089594.603 884999.55 13222.5 2009058.653

India 3,287,240 1,210,193,422 - - - -

In short, the total requirement of fi nancial resources to meet the activities under the National Action Plan on Climate

Change and the State Climate Action Plans for 14 states is estimated to be USD 66 Billion for a period of 5 years.

These costs do not factor in the fi nancial need assessment of the remaining 15 states, plans for which are yet to be de-

veloped. As can be seen from the table above, the states that have submitted their action plans contain approximately

53 percent of the country’s geographic area and approximately 29 percent of the total population. It is fairly evident

that the costs of implementing these state climate action plans would increase signifi cantly (almost three times) once

all 29 states including the geographically large and populous states such as Punjab, Maharashtra, Rajasthan, and Uttar

Pradesh submit their plans.

3.4 The Institutional, Governance, and Policy Structure of Climate Finance in India

In India, climate change is under the purview of the Ministry of Environment and Forests (MoEF), which is mandated

to interact with all other government agencies and departments to mainstream climate change considerations into their

respective policies and actions. For matters that require a cabinet decision, the MoEF prepares a brief to the Cabinet

or a Group of Ministers, and seeks their approval.

The Planning Commission of India is entrusted with the responsibility to prepare both the annual development plans

for the country as well as coming up with fi ve year plans, with inputs from the various ministries, departments and

agencies and based on inputs from the State Planning Commissions.

Further, for the country as a whole, the guiding document for action on climate change is the National Action Plan on

Climate Change consisting of 8 missions. The ministries responsible for implementing the 8 missions have also pre-

pared detailed budgetary estimates required for implementing their respective mission targets (see Table 1).

15 Source- State Climate Action Plans available in the public domain

13

For all practical purposes, the onus of arriving at the total countrywide fi nance requirement for addressing climate

change in India is on the nation’s the Planning Commission. But the Planning Commission is not a decision-making

body and can only provide recommendations with the allocations of fi nance for domestic climate actions being ulti-

mately determined by the Ministry of Finance, which is in-charge of preparing budgets in India, including imposing

taxes and levies as well as making annual allocations for expenditure by different line ministries at the central and

state levels.

While the MoEF is the nodal body at any climate related negotiations in any forum or UN Body, the Ministry of External

Affairs is also involved in the negotiations, and while they may at times bring in their perspective, the fi nal call on posi-

tion usually rests with the MoEF. The Planning Commission and the Prime Minister’s Offi ce (PMO) also have an advisory

role to play in the institutional decision-making regarding climate change, although there have been instances where

the position of the MoEF has prevailed over these two. One such example is with regard to the case of hydrofl uorocar-

bons (HFCs) phase out. It is believed that the PMO wanted India to agree to a HFC phase out, based on the promise

that the Prime Minister had given to the US President, however the MoEF stuck to its earlier position of rejecting a

phase out of HFCs by developing countries.

As far as determining fl ows of climate fi nance is concerned, India has a dedicated Climate Change Finance Unit (CCFU)

housed in the Ministry of Finance. The main functions and responsibilities of the (CCFU) are as follows:

a) To serve as the nodal point on all climate change fi nancing matters

b) To represent the Ministry of Finance in all climate change fi nancing related issue in all international and domestic

forums

c) To advise the MoEF and the Government of India on its position on climate fi nance, particularly in the context of

the UNFCCC negotiations, and the role and functioning of the GCF along with other domestic and international

platforms and forums.

d) To provide Indian negotiators in the context of the UNFCCC negotiations with briefs based on analysis of various

country submissions to the UNFCCC, which is specifi c to climate fi nance, and to also analyze various pledges by

developed countries.

3.5 Mapping of Various Stakeholders and their Role in Climate Finance in India

In addition to the state actors mentioned above, there are a number of non-state actors, as well as representatives from

foreign countries and multilateral agencies, who are involved in the Climate Policy space. The non-state actors are pri-

marily civil society groups, research and academia, think tanks and policy analysts. In addition there are bilateral and

multi-lateral donor agencies that also operate in this space. Further, there are representatives of the environment and

business development cells of various country embassies, missions and high commissions based in India.

From a climate angle, the interest of representatives of the environment/climate cell is primarily to gauge India’s stance

on climate negotiations, in order to inform their respective country’s negotiating stance particularly on climate.

However, on climate fi nance per se, the interest of representatives of the environment and business development cells

of various country embassies, missions and high commissions based in India, is primarily to assess and monitor the

“Overseas Development Aid” fl ows from their respective countries to India and also to identify possible projects or

areas for bi-lateral cooperation. They also assess the various potentials for projects in India from a business develop-

ment perspective, particularly for projects in the so-called “Clean Energy” and “Sustainable Transport Space” and to

enhance industry to industry cooperation and facilitate trade in the areas.

As of now, there are very few civil society groups, research/academic groups, policy analysts and think tanks that are

exclusively engaged in the climate fi nance space. While a number of groups have provided inputs to and critiqued

the National Action Plan and the State Climate Action Plans and in some cases helped in estimating the budgetary


requirements for implementing the state action plans, there is very little involvement of these groups in monitoring the

international negotiations around climate fi nance and actual climate fi nance fl ows received by India. Further, there is

also very little involvement of these groups in climate fi nance advocacy with Indian negotiators and policy makers to

suggest new and innovative methods for raising climate fi nance and also to identify new areas for directing these fl ows..

Acknowledging the vital role that civil society plays in climate fi nance discourses both on the international and national

level, recently the Ministry of Finance and the Climate Change Finance Unit, have made it a point to invite civil so-

ciety inputs prior to the GCF Board Meetings, particularly on key operational modalities related to its Business Model

Framework, a proposed Private Sector Facility and on efforts for Resource Mobilization for the Fund, some of the key

issues under discussion in the GCF. However, interest and participation from Indian civil society and other stakeholder

groups have so far been very thin, primarily because of lack of awareness and capacities amongst groups potentially

willing to follow the issue.

As of April 2014, only six Indian civil society groups are accredited to the GCF, namely Keystone Foundation, Applied

Environmental Research Foundation (AREF), Centre for Policy Research (CPR), Vasudha Foundation, Centre for Com-

munity Economics and Development Consultants Society (CEOCODECON), and Climate Action Network South Asia

(CANSA).

As for Private Sector actors, till April 2014, SELCO Solar Private Limited, a social entrepreneur organization working in

the fi eld of promoting solar systems, and Core CarbonX Solutions, are two private sector entities from India accredited

to the GCF.

In terms of other stakeholders, one group of that has not played a very active role in either infl uencing India’s position

at the UNFCCC nor on specifi c issues, inclusive of the climate fi nance are the country’s parliamentarians and state

legislators. This group together forms a very important constituency from a state policy makers perspective, as lot of

state climate action plans are mere plans with no implementation road map made so far, which is primarily due to the

lack of available fi nancing for the same.

The parliamentarians only get a feedback as annual reporting after the Convention/Meeting of Parties, and most often

very little space or discussion time is allocated on the fl oor of the parliament on this issue. While there are dedicated

groups working with Parliamentarians such as the “Climate Parliament”, “The Globe”, “Centre for Legislative Research

and Advocacy (CLRA)” and PRS Legislative Research”, their focus on international negotiations and crucial issues of

climate fi nance is close to none.

Some key observations from the fi ndings of this mapping are as follows:

a) There is immense scope for other players within the Government to be involved in the discussion around climate

fi nance, particularly Ministries that are active in implementing a number of plans and programmes that have im-

mense potential for reducing carbon emissions. To name a few of them, the Ministry of New and Renewable Energy,

the Ministry of Power, the Ministry of Urban Development, Ministry of Surface Transport and Ministry of Agriculture

are all currently at best peripherally engaged in the implementation of national climate change initiatives.

b) These Ministries need to be involved in not just inputting into the quantum of fi nance requirement analysis, but

primarily also in preparing key national climate strategy framework documents such as the National Appropriate

Mitigation Actions (NAMAs), and a National Adaptation Plan (NAP). They should also play a role in national and

state-wide debates on identifying fi nancial instruments, such as emissions trading instruments, similar to the

Perform Achieve and Trade Scheme (PAT Scheme) for energy effi ciency measures in industries, the possibility of

carbon taxes, increases in tax slabs for vehicles of an engine and body size above a specifi ed level, or a cess on

coal amongst others. In general, there is a need to ensure that climate change is mainstreamed into the activities

of all relevant ministries, rather than being left for the MoEF and a few other ministries and departments to decide

upon policies, programmes and specifi c initiatives to deal with the issues.

c) There are very few non-state actors in India following the issue of climate fi nance and therefore, there is very little

input to the government on climate fi nance policy formulation with limited monitoring of Government actions and

commitment and thus efforts to hold the government accountable. There is a very vibrant civil society movement

15

that engages on various aspects of development policy in India. Many of the progressive initiatives in the past

decade on development have been initiated and campaigned for by the civil society movement. However, most

of these civil society groups do not work on climate change. There is thus a need to draw them into the climate

change policy debate, so that a more vibrant civil society movement can be catalyzed to engage meaningfully with

the government on formulating an effective climate change strategy in India.


4.1 National Budgetary FlowsAs detailed in the earlier section, the estimated actual spending (through domestic public sources) on India’s adapta-

tion needs covering the sectors of health, water, rural development and forestry was approximately 2.6% of its GDP in

the year 2009-10.

Further, as detailed above, the budgetary requirements to meet the plans under the National Action Plan on Climate

Change for a period of 5 years is estimated to be USD 31 Billion.

Government of India has always maintained that all the plans, programmes, and activities envisaged under the National

Action Plan on Climate Change would be purely voluntary action from its side, not to be understood as requirements

under the UNFCCC, and therefore these plans are not subject to any fi nancial fl ows or support from the international

community as part of a future climate agreement under the UNFCCC. However, India has often stated at the UNFCCC,

that it is willing to take on more ambitious mitigation actions, over and above what has been envisaged in the NAPCC,

if there are adequate fi nancial fl ows from the GCF. Therefore, as of now, all estimated fi nancial requirements for the

implementation of the programmes envisaged under the National Action Plan on Climate Change would have to be met

through domestic resources. Some measures that have been undertaken for fi nancing certain aspects of the National

Action Plan on Climate Change are:

a. Fiscal Instruments: Fiscal instruments are in the form of Partial Risk Guarantee Fund and Venture Capital Fund for

Energy Effi ciency, which are primarily instruments established from seed capital provided by the Government of

India to provide the “viability gap funding” for fi nancial institutions and private entities. These funds are adminis-

tered by Public Sector Enterprise, called, Energy Effi ciency Services Limited (EESL) which is a Joint Venture of the

National Thermal Power Corporation, Power Finance Corporation, Rural Electrifi cation Corporation, and Power-grid

Corporation of India.

b. Tax Incentives: Tax incentives are in the form of tax holidays for new ventures, exemption from value added tax for

capital equipment and accelerated depreciation

c. Subsidies: In addition to tax incentives, there are also subsidies given for capital investments on select renewable

energy applications. These subsidies are very geographic specifi c and device specifi c. In addition to this, subsi-

dies are also in the form of subsidized/concessional interest rates, to ensure access to low cost loans to purchase

renewable energy products and applications.

DOMESTIC CLIMATE FINANCE FLOWS

04

17

d. Regulatory Measures: (Feed-in-Tariffs): the Feed-in tariff is a policy mechanism designed to accelerate investment

in renewable energy technologies. In India, feed in tariffs are set at the state level by the state electricity regulatory

authority, for various sources of generation of electricity from renewable energy sources The tariffs are arrived at,

based on the current capital costs, penetration levels and economies of scale, to determine, the cost of generation.

Feed in tariffs are typically revised periodically with some every year and others once in two to three years. The

budgetary support for feed-in-tariffs comes from the National budgetary allocations

e. Utility and Municipality Demand Side Management Programmes for the Energy Sector: A number of City Munici-

palities and State Owned Electricity Distribution Companies are provided with budgetary support to run demand

side management programmes, aimed at enhancing energy effi ciencies. These programmes include, the village

LED programme, irrigation pump set effi ciency programme, CFL lighting programmes, public water pumping sys-

tem effi ciency improvement programmes.

4.2 State Budgetary FlowsAccording to the Constitution of India, states have relatively limited powers for revenue generation. Over the years, the

fi nancial autonomy of the states has eroded due to increased centralization of taxation. As a result, states are highly

dependent on transfers of resources from the Union Government. Therefore, with the limited powers of the state to

raise its own revenues, the largest single contributor to the States exchequer is the Sales Tax, which is a tax on sales

of products within the boundaries of a state.

In view of the above, States have to largely depend on national programmes and activities to meet their budgetary re-

quirements, in addition to planned allocation that the states receive from resources committed to the implementation

of national 5 year planning processes.

It must be pointed out here, that the Ministry of Environment and Forests, to encourage states to prepare the State

Climate Action Plan, made the offer that, states that would comply with the requirement could also submit the plans to

the planning commission for consideration of allocation of fi nancial resources for the 12th Five Year Plan (2012-2017).

4.3 Global and Domestic Direct Market Mechanisms In addition to direct government budget allocations at the national and state levels, market mechanisms on both the

domestic and global level generate resources for climate change action in India. Some of the mechanisms operating

at the moment are as follows:

A) Domestic Mechanisms

(i) Perform Achieve and Trade (PAT) Scheme

The PAT scheme is a market based mechanism for enhancing energy effi ciency in large scale and energy intensive

industries. Industries that qualify to participate in this scheme are known as ‘Designated Consumers’ and a total of

478 facilities have been identifi ed by the Bureau of Energy Effi ciency (BEE). The scheme sets energy effi ciency targets

and incentivizes businesses achieving higher energy effi ciency with tradable energy saving certifi cates (ESCerts). Each

ESCert is equivalent to 1 Metric Tonne of Oil Equivalent The market for these ESCerts will be the entities that will not

meet their energy effi ciency targets and will need to buy these ESCerts to meet the energy effi ciency norms.

The 9 sectors covered by BEE under the PAT scheme are as follows:

1. Aluminum

2. Fertilizers

3. Iron and steel


4. Cement

5. Pulp and paper

6. Chlor-alkali

7. Railways

8. Thermal Power plants

9. Textile

PAT was rolled out in April 2011 and aims to reduce emissions by 26 million tons of CO2e, as well as save 6.6 mil-

lion tons of oil equivalent over its fi rst commitment period (2012-2015). Covered facilities are generally obligated to

improve energy effi ciency by 1-2% per year.

(ii) Renewable Energy Certifi cates (RECs)

RECs is again a market based measure, designed to ensure compliance of Renewable Purchase Obligations (RPOs) set

by various State Electricity Regulatory Commissions (SERC) and to further, give encouragement to states to tap their

renewable energy potentials, and acts as an incentive to State Electricity Utilities to purchase electricity from renew-

able energy sources, over and above their stipulated Renewable Purchase Obligation. It also acts as a disincentive to

states that are not able to achieve the Renewable Purchase Obligation Commitments.

The rationale behind implementing the REC mechanism was to achieve renewable energy generation goals specifi ed

under the Electricity Act, 2003 and the NAPCC. Under the Electricity Act, 2003; the country’s State Electricity Regu-

latory Commissions (SERCs) set targets for power companies to purchase a certain percentage of their total power from

renewable sources. These targets are called Renewable Purchase Obligations (RPOs).

Each REC is equivalent to 1 megawatt-hour (MWh) of energy generated from renewable energy sources- solar, wind,

small-scale hydro (capacity below 25 MW), biomass-based power, biofuels, and municipal waste based. The purchase

of each REC is treated as the consumption of corresponding quantity of renewable energy. 21 of India’s states have

REC obligations, ranging from 2% to 14% energy purchase from renewable sources.

Starting in April 2011, RECs are submitted and traded at India’s two major power exchanges, Indian Energy Exchange

(IEX) and Power Exchange of India Limited (PXIL). The fl oor and ceiling prices of RECs are determined by the Central

Electricity Regulatory Commission (CERC) from time to time. The price band for solar certifi cates is fi xed at USD $264-

375 per MW/h, and for wind certifi cates this value is USD $33-86 per MW/h. According to the Environmental Defense

Fund, trade estimates value India’s REC market size at USD 1.2 billion16.

Till February 2014, India’s total REC issuance has reached 10.1 million RECs. Out of the total RECs issued till date,

9.9 million are non-solar RECs17.

B) Global Mechanism

Clean Development Mechanism

The Clean Development Mechanism (CDM), which is the fi rst global, environmental investment and credit scheme for

promoting low carbon solutions, was conceived as a mechanism under the Kyoto Protocol to the United Nations Frame-

work Convention on Climate Change.

16 The World’s Carbon Markets: A Case Study Guide to Emissions Trading, Environmental Defense Fundhttp://www.ieta.org/assets/Reports/EmissionsTradingAroundTheWorld/edf_ieta_india_case_study_may_2013.pdf17 Source- Climate Connect, http://www.climateconnect.co.uk/Home/?q=India%E2%80%99s%20REC%20issuance%20crosses%2010%20

million%20in%20February%20

19

Primarily, the CDM allows emission-reduction projects in developing countries to earn certifi ed emission reduction

(CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized

countries to a meet a part of their emission reduction targets under the Kyoto Protocol.

The key objectives of the CDM as it was conceived, are to contribute towards the ultimate objective of the UNFCCC by

providing

• fi nancial assistance to developing countries to embrace sustainable and low carbon development pathways by al-

lowing industrialized countries to achieve compliance with their Kyoto emission reduction commitments to offset-

ting national emissions with generally less costly emissions reductions efforts in developing countries.

Since the CDM was operationalized in 2006, India has been the second largest benefi ciary of CDM projects with a total

of 2850 approved projects by the National CDM Authority as of March 2012. The total number of Certifi ed Emission

Reduction (CERs) Units for the period being 722,912,922 metric tonnes of CO2 equivalent.

The World Bank in its report, titled, “State and Trends of the Carbon Market, 2012”, estimates that the total revenue

through the CERs for the period for India projects alone would be in the region of Rs. 343,384 Million approximately.18

The following table and graphs present a broad overview of the profi le and sector wise distribution of the CDM Projects.

Table 3 - Sector wise distribution of CDM projects in India19

Sl. No. Name of Sector No of Projects CER upto 2012 (tCO2 equivalent)

1 Aff oresta on and Reforesta on 18 10,874,541

2 Agriculture 3 74,393

3 Chemical Industries 18 11,793,853

4 Energy industries (Renewable/Non-renewable sources) 2241 487,417,048

5 Energy Demand 222 27,109,485

6 Energy Distribu on 9 657,149

7 Fugi ve emissions from fuel (Solid, Oil and gas) 3 165,438

8 Fugi ve emissions from produc on and consump on of halocarbons and sulphur

6 82,095,771

9 Manufacturing Industries 237 64,405,361

10 Metal Produc on 5 5,425,126

11 Mining/Mineral Produc on 4 19,053,935

12 Solvent use 1 103,579

13 Transport 13 1,238,906

14 Waste handling and disposal 70 12,498,337

Total 2850 722,912,923

18 http://siteresources.worldbank.org/INTCARBONFINANCE/Resources/State_and_Trends_2012_Web_Optimized_19035_Cvr&Txt_LR.pdf19 Source - National CDM Authority, MoEF


Figure 3 - Sector wise distribution of approved CDM projects in India20

As can be seen from the fi gure above, out of a total of 2850 CDM projects in India 2472 (almost 87%) are in the energy

sector. These projects are mostly dominated by the renewable energy sector where a lot of power generation projects

are being developed to meet the gap in the demand and supply of electricity in India.

Figure 4 - Sector wise distribution of CER’s generated upto 2012 in India21

Projects registered to mitigate emissions from the production and consumption of halocarbons and sulfur are only a

handful in India (6 in total), however, they have produced 11% of the total CERs generated in India till date.

20 Source-Based on information collected from the National CDM Authority, Ministry of Environment and Forests, Government of India http://www.cdmindia.gov.in/reports_new.php?n=121 Source- Based on information collected from the National CDM Authority, Ministry of Environment and Forests, Government of India http://www.cdmindia.gov.in/reports_new.php?n=1

21

5.1 Overview of Bi-lateral and Multi-lateral Project Financing in India

India has been a benefi ciary of bi-lateral and multi-lateral fi nancial fl ows for many decades now, both in the form of

grants, loans, soft loans and technical and capacity building assistance. These fi nancial fl ows are project and sector

specifi c. Most of the grants that India has received are packaged under the banner of “Overseas Development As-

sistance” (ODA) and this continues even for climate fi nancing. Those grants that are not under the ODA umbrella are

part of a specifi c joint programme, such as the EU-India, Clean Energy Partnership, and the US-India Clean Energy

Partnership and so on. However, these programmes are also treated as ODA.

The total fi nancial fl ows into India from a combination of grants, loans and technical assistance are approximately USD

10.5 Billion since 2007. For the purpose of this mapping, we have looked at bi-lateral and multi-lateral projects that

have been implemented in India since the year 2007, and projects that were being announced or implemented at the

time of writing the report in 2013. The year 2007 was chosen as the starting point because it saw the adoption of the

Bali Action Plan (BAP) under the UN Framework Convention on Climate Change and one of its pillars was ‘enhanced

action on the provision of fi nancial resources and investment to support action on mitigation, adaptation, and technol-

ogy cooperation.’ The fi nancial volume of the projects has been taken on the basis of the amount committed for the

entire duration of the project, therefore if a project began in 2012 and is ending in 2017 we have taken into account

the entire amount sanctioned for its duration.

5.1.1 The Sources of Foreign Financial Flows

5.1.1.1 Grants:

The key sources of bi-lateral assistance in the form of grants are the following:

• United States Agency for International Development (USAID)

• Canadian International Development Agency (CIDA)

• International Development Research Center (IDRC, Canada)

• Department for International Development (DFID) and British High Commission

PROFILE OF FINANCE FLOWS

05


• Swiss Agency for Development and Cooperation (SDC)22

• Indo-German Development Cooperation

• Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

• Swedish International Development Agency (SIDA)23

• Norwegian Assistance Agency for Development Cooperation (NORAD)24

• Indo-French Development Cooperation25

• Australian-Aid (Government of Australia)

• European Commission

• Japan – Green Aid Plan

5.1.1.2 Multi-lateral Grants:

The key sources of multi-lateral assistance to India in the form of grants and project support in the recent past are

• United Nations Development Programme (UNDP)

• Global Environment Facility (GEF)

5.1.1.3 Multi-lateral Loans and Technical Assistance:

Other Multi-lateral agencies that support India through project loans, both soft as well as market based loans and tech-

nical assistance, which can be a component of a loan and also can be in the form of a grant are:

• World Bank

• Asian Development Bank

• International Fund for Agricultural Development (IFAD)

5.1.1.4 Soft Loans/Technical Assistance:

India receives a fair amount of assistance from KfW. These are in the form of loans, though, some of them allow a long

gestation period for repayment, with a extremely soft interest rates.

• KfW (Germany)26

The following info-graphic indicates the broad structure of climate fi nance fl ows in India. These fi gures only include

international public fi nance received by India.

22 Switzerland also provides mixed credit comprising 40% grant and 60% loan for power sector projects.23 Sweden has stopped grants to India since 2007, but has technical cooperation agreement with India for areas such as Environmental Protection,

Sustainable Development and Social Development. Th ese will be in the form of technical cooperation and assistance and no direct fi nancial fl ows)24 Norad has recently started institution to institution cooperation for the environment sector. 25 Indo-French Development Cooperation is primarily aimed at addressing climate change, though under the broad umbrella of “sustainable

management of global public goods”26 KfW also provides reduced interest loan for projects and also gives grants under special circumstances.

23

Figure 5- Climate Finance in India27

27 Source-Adapted to the Indian context from Climate Policy Initiative’s ‘Landscape of Public Climate Finance in Indonesia’

Loans

INR 325805 million

Technical Assistance

INR 187344 million

Bilateral Funds

INR 227105 million

Grants

INR11869 million

Mitigation

INR 424304 million

Adaptation

INR 100714 million

Multilateral Funds

INR 297913 million

International Finance

INR 525018 million

Cross Cutting Areas

INR 692 million

Water INR 23828 million

Forest & Biodiversity

INR 6244 million

Agriculture

INR 1196 million

Cross Cutting Areas

INR 293 million

Disaster Recovery INR 68754 million

Transport

INR 14724 million

Industry

INR 7348 million

Energy

INR 401939 million

on

FoF

nn

ion

on

ion

Source Intermediaries Instruments Uses

Central Budget Government of India

Na onal Budget

Na onal Budget

Sector


6.1.1 Domestic Budgetary Allocation

Financial outlays towards the NAPCC have already been outlined in the sections above, however it is important to note

that since the NAPCC leans towards adaptation activities, almost 80% of the intended fi nance has been allocated

towards climate change adaptation. This is also shown in the fi gure below.

Figure 6 - Finance for Adaptation and Mitigation programs under the NAPCC28

28 Source-Based on information collected from the National Action Plan on Climate Change (2008)

THE ADAPTATION AND MITIGATION BALANCE OF ALL FINANCIAL FLOWS (DOMESTIC AND INTERNATIONAL)

06

25

The above graph gives a broad indication of the country’s priorities as perceived by Indian policymakers. Over the

years budgetary allocation has increased towards areas such as health improvement, drought proofi ng, fl ood control,

and disease control. And looking at the above fi gure demonstrating the tilt towards adaptation spending, the existing

budgetary allocation in adaptation is supplemented by NAPCC missions that are largely directed towards improvement

in sustainability of ecosystem services. The fi gures for both adaptation and mitigation are just for projects envisaged

under the missions.

However there are additional initiatives though not taken explicitly to deal with climate change such as renewable

energy targets to be implemented by 2020, or the appliance effi ciency labeling programme, and the more recently

launched vehicle effi ciency labeling programme which have been taken to address energy security and enhancing the

effi ciency of the use of energy. While the primary motivation for these initiatives is to respond to growing energy import

dependence, the peripheral benefi t is that they also address climate change. An analysis of budgetary allocation for

the Bureau of Energy Effi ciency (BEE) and the Ministry of Power for energy effi ciency and conservation programmes

provides an overview of the budgetary allocation, which for the year 2012-13 was approximately USD 66 million and

Rs. 4 billion respectively. Similarly, the budgetary allocation for the Ministry of New and Renewable Energy for the year

2012-13 was approximately USD 200 million.

Therefore, while it seems that efforts for mitigation in terms of budgetary allocation is a mere 20 percent of the total

budgetary allocations for tackling climate change, if all the other estimates are factored in, it would possibly go up to

25 to 30 percent. This of course also does not factor in the climate-related investments from the private sector, which

are primarily in the energy effi ciency and renewable energy sectors, thus changing the overall composition of climate

fi nance expenditure in India.

As can be seen in the fi gure below the budgetary estimates for the state action plans on climate change also indicate

greater spending towards adaptation.

Figure 7- Adaptation Vs Mitigation spending in the states with approved climate action plans29

29 Source- Based on information collected from the various State Climate Action Plans available in the public domain

Adaptation vs Mitigation for 14 States

Adaptation Mitigation

54.20 %44.10 %


Figure 8- Projected climate fi nance requirements for the 14 states30

As can be seen in the fi gure above, the fi nance requirements of coastal and mountainous states such as West Bengal

and Sikkim favor greater adaptation spending. The only anomaly is the state of Uttarakhand, whose plan favors greater

allocation for mitigation even though it got devastated by a massive fl ood in 2013.

One reason for mitigation activities not being a priority for the states is that bulk of the mitigation oriented programmes,

primarily related to energy effi ciency and conservation and renewable energy are already covered under the National

Action Plan and states already have a source of revenue from budgetary allocations for these programmes.

6.1.2 Bi-lateral and Multi-lateral Grants

Based on information available from the bi-lateral and multi-lateral agencies that have been covered in this mapping, a

total of INR 11869 million has been provided to India in the form of grants till date (starting from 2007). These fl ows

consist of grants for activities covering both climate change mitigation and adaptation.

The bulk of the grants have fl own mainly from bi-lateral agencies such as USAID, DFID, and a major international

source for climate fi nancing, the Global Environment Facility.

6.1.3 Bi-lateral and Multi-lateral Loans

The total amount of bi-lateral and multi-lateral loans that India has received from 2007 till date amount to a total of

INR 325805 million. These loans have been provided mainly by multi-lateral agencies such as the World Bank and the

Asian Development Bank. The loan amount tracked as part of this mapping consists of fl ows towards activities covering

both climate change mitigation and adaptation.

6.1.4 Bi-lateral and Multi-lateral Technical Assistance

Technical assistance provided to India by bi-lateral and multi-lateral agencies since 2007 amounts to a total of INR

187344 million. Technical assistance can be both in the form of grants and loans, and since the form of the fl ows

provided to India was not clear, these amounts have been considered as technical assistance without classifying them

into loans or grants.

30 Source- Based on information collected from the various State Climate Action Plans available in the public domain

27

6.2 Profi le of Adaptation Projects (Sectors and Coverage)The following tables provide an overview of the international fi nancial fl ows for adaptation and mitigation projects in

India since 2007 till date.

Table 4: International fi nance fl ows for climate change adaptation in India31

Adapta on

Sector No. of Projects Funded Amount (INR millions)

Disaster Recovery 8 68754

Forest and Biodiversity 10 6244

Agriculture 4 1196

Water 8 23828

Cross Cu ng Areas 4 692

Total 34 100714

The total amount that India has received for climate change adaptation through loans, grants or technical assistance

over a period of 7 years is Rs. 100714 million approximately, translating to approximately USD 2014.28 Million or

USD 2.014 Billion.32 The following fi gure shows the total fi nance fl ows received for climate change adaptation in India.

Figure 9-Distribution of international fi nance fl ows for adaptation in India33

31 Source-Based on information collected through primary and secondary research32 Currency conversion rate has been taken as an average value over the last 5 years to arrive at the USD equivalent are: 1 Dollar ($) = 50 INR 1 Euro (EUR) = 65 INR 1 Swiss Franc (CHF) = 55 INR 1 Great Britain Pound (£) = 85 INR33 Source-Based on information collected through primary and secondary research

8

104

8

4

68754 (68%)

6244 (6%)

1196 (1%)

23828 (24%)

692 (1%)

Distribution of Adaptation Projects and Funds among sectors

Disaster Recovery

Forest and Biodiversity

Agriculture

Water

Cross Cuttting Areas

Adaptation

No. of Projects: 34Funded Amount: INR

100714 millions

Funding (in INR millions)


No. of Projects

No. of Projects

8

624444 (6%%)

11119966 119961199666119966(( )1%%)))1%%))1%%))

238288(24%(24%%)%)( ))))

8

0 875468668%)(6(

343434INR s

NoFund

10


6.2.1 Profi le of adaptation related grants

In comparison to the total fi nance fl ows in India, grants towards adaptation related activities are in the region of INR

996.57 million. These grants have been mainly instrumental in supporting activities in the agriculture, forestry, and

water sector. The states that have been the main benefi ciaries of these grants are Himachal Pradesh, Haryana, Karna-

taka, Sikkim, and Madhya Pradesh.

6.2.2 Profi le of adaptation related loans and technical assistance

The only recipient of adaptation related loans is the Indian state of Himachal Pradesh, and the adaptation related fl ows

in the form of loans and technical assistance amount to INR 99717.05 million. Bi-lateral and multi-lateral assistance

for adaptation-related activities has been largely in form of grants because support for adaptation is supposed to help

countries cope with the impacts of climate change and does generally not generate.revenues. Therefore due to the risk

attached in disbursing loans towards climate change adaptation, loans and technical assistance in this domain have

been less relevant.

6.3 Profi le of Mitigation Projects

Table 5- International fi nance fl ows for climate change mitigation in India

Mi ga on

Sector No. of Projects Funded Amount (INR millions)

Energy and Electricity 48 401939

Transport 4 14724

Industry 18 7348

Cross Cu ng Areas 3 293

Total 73 424304

Figure 10- Distribution of international fi nance fl ows for mitigation in India34

34 Source-Vasudha Foundation research

484

18

3

394314(95%)

14724(3%)

7348(2%)

98(0%)

Energy and Electricity

Transport

Industry

Cross Cuttting Areas

Mitigation

No. of Projects: 73Funded Amount: INR

424304 millions



No. of Projects

No. of Projects

4

18

48

73INR

ns

NoFund

42

29

The total amount that India received for mitigating climate change through loans, grants or technical assistance over

the last 7 seven years is Rs. 424304 millions, translating to approximately USD 8.5 Billion.

6.3.1 Profi le of Mitigation related grants

The sectors that receive grants for climate change mitigation are electricity and energy, transport, and industry. The

total amount that India has received in the form of grants for Electricity and Energy Sector from 2007 till date amount

to approximately INR 9579.69 million. The grants have been given to implement the projects to bring about overall

change in the Indian energy scenario. Additionally, the transport sector has received INR 460 million for the same time

period from 2007 till date.

The total amount that India received by way of grants for projects in the industry sector from 2007 till date amounts

to approximately INR 833.2 million.

6.3.2 Profi le of Mitigation related loans and technical assistance

The largest recipient of mitigation related loans in India is the electricity and energy sector. The total amount that India

has received in the form of loans for the sector since 2007 till date is approximately INR 392359.64 million. Most of

these loans have been directed towards increasing the deployment of renewable energy and improving the effi ciency of

the transmission and distribution network in India. The energy sector is supported by loans due to the fact that infra-

structure creation results in revenue generation that can be used to repay the loans.

The transport sector has also been the recipient of large loans. Since 2007 it has received approximately USD 14264 million for activities resulting in promotion of low carbon transport.

6.4 Analysis of Adaptation and Mitigation Project Profi les – Alignment of external fi nancial fl ows in relation to India’s climate priorities

The total number of climate change adaptation and mitigation projects in India covered in this mapping (from 2007 till

date) are 34 and 73 respectively. In terms of external fi nancial fl ows mitigation continues to receive the highest support

from both bi-lateral and multi-lateral agencies. Out of the total number of climate change related projects covered in

this mapping, it was found that 68% of the total projects were focused on climate change mitigation and these projects

were receiving 81% of the total external fi nancial fl ows. This does not include the government’s budgetary support as

extended to the Jawaharlal Nehru National Solar Mission and the National Mission on Enhanced Energy Effi ciency.

The Government of India has also highlighted low-carbon development as a priority, and its continued focus towards

enhanced energy access and improved energy security has resulted in the mitigation projects being dominated by the

renewable energy sector. Amongst all the sectors the energy sector has been the recipient of the largest grants and

loans from the various bi-lateral and multi-lateral agencies covered in this mapping.

However, as can be seen in the various state climate action plans and the NAPCC itself, India accords a high priority

to climate change adaptation, although it is fi nanced mostly by domestic resources as. external fi nancial fl ows towards

adaptation related activities constitute only 19% of the total climate fi nance fl ows that India receives.


Figure 11- Distribution of projects between adaptation and mitigation35

Figure 12- Distribution of funds between adaptation and mitigation36

The largest share of climate fi nance is directed towards mitigation projects in India, with. mitigation fi nance provided

in the form of soft loans the dominant fi nancial instrument used, resulting in repayment obligations and future fi nance

outfl ows for India. also serves as returnable capital

Figure 13- Provision of external adaptation fi nance in percentage by contributors37

Of the multi-lateral and bilateral agencies providing climate fi nance support for India, which have been mapped in this

report, the ADB and the World Bank provide the largest share of adaptation support.

35 Source- Based on information collected through primary and secondary research36 Source- Based on information collected through primary and secondary research37 Source- Based on information collected through primary and secondary research

32%

68% Adaptation

Mitigation

19%

81% Adaptation

Mitigation

40.2

0.0

44.7

1.0 0.3 1.9 2.2 0.6 0.7 0.0 0.4

8.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

WorldBank

KfW ADB USAID UNDP GEF SDC GIZ IDRC EU DFID AFD

Perc

enta

ge

Donor

31

Figure 14- Provision of external mitigation fi nance in percentage by contributors38

The largest number of mitigation projects are supported by multi-lateral agencies such as the World Bank, the Asian

Development Bank, and KfW; and as mentioned earlier the fi nancial support for these projects is directed towards the

energy sector.

Figure 15- Percentage wise distribution of adaptation projects supported by donors39

38 Source- Based on information collected through primary and secondary research39 Source- Based on information collected through primary and secondary research

14.76

46.03

33.67

1.85 0.43 0.68 0.34 0.35 0.00 0.00 0.031.85

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

Worldk

KfW ADB USAID UNDP GEF SDC GIZ IDRC EU DFID AFD

Perc

enta

ge

17.62.9

11.8

11.8

14.7

11.8

8.8

2.9 5.9

2.92.9

5.9

World Bank

KfW

ADB

USAID

UNDP

GEF

SDC

GIZ

IDRC

EU

DFID


Figure 16- Percentage wise distribution of mitigation projects supported by donors40

The Government of India has stated numerous times that despite its domestic spending on climate change adaptation,

the magnitude of its adaptation efforts necessitates that it requires external fi nancial support particularly in the form

of international public fi nance. However the external fl ows received by India are heavily tilted towards climate change

mitigation. Hence, it can be said that the external fi nancial fl ows are not aligned with India’s climate priorities.

6.5 Financial Flows in Relation to Assessed Financial Needs and Outlays

As per Government of India estimates, a total of USD 37.16 billion is required to implement the plans envisaged under

the 8 missions of the National Action Plan on Climate Change and a further amount of USD 200 million is required to

implement the State Climate Action Plans for 14 states, totaling to approximately USD 37.35 billion over a period of

5 years or approximately USD 8 billion per year.

As far as money fl ow into the country is concerned, India has received through the various bi-lateral, multi-lateral and

existing fi nancial mechanisms, a total amount of approximately USD 10.5 Billion or approximately USD 1.5 Billion

per year for the period of 2007-2014. Many of the projects and programmes are in a way connected to some of the

programmes and activities envisaged under the National Action Plan on Climate Change and also the State Climate

Action Plans.

Therefore, in relation to the estimated requirement and the fl ows, the funding gap is approximately USD 6.5 Billion

per year. Further, the National Clean Energy Fund created by the Government of India, which levies a cess of Rs. 50

(approximately USD 1) on one tonne of coal (both domestic and international), is expected to have approximately USD

1.6 Billion by 2015 and possibly add approximately USD 500 Million to USD 1 Billion every year. This further reduces

the funding gap to approximately USD 5.5 billion per year.

40 Source- Based on information collected through primary and secondary research

15.1

8.2

13.7

6.820.5

12.3

4.1

13.7

0.0 0.01.4

4.1

World Bank

KfW

ADB

USAID

UNDP

GEF

SDC

GIZ

IDRC

EU

DFID

AFD

33

• India is a benefi ciary of fairly large fi nancial fl ows from bi-lateral and multi-lateral agencies and these are in the

form of fi nancing for projects.

• However, there is a continued gap between the assessed need to meet the adaptation and mitigation requirements

and the current fl ow of fi nances from multi-lateral, bi-lateral and other agencies.

• Most of the projects from bi-lateral and multi-lateral agencies do not necessarily conform to national priorities, as

identifi ed by the Government. This is indicative of the fact that a large share of bi-lateral and multi-lateral loans

and grants are for mitigation oriented projects, while the Government of India’s priority area as indicated in the

National and State Climate Action Plan is knowledge building and adaptation.

• However, this also possibly indicates a willingness of the Government of India to further expand the renewable

energy sector.

• Some of the climate fi nance projects that come under the purview of mitigation projects can be questioned as to

its nature of being “low carbon”. There is continued substantial support given to projects that continue energy

generation on a fossil-fuel basis such as “clean coal”, “super-critical thermal power plants”, “effi ciency improve-

ments of thermal power plants” and the like.

• However, it is interesting to note that the share of projects for renewable energy and overall energy effi ciency in the

overall portfolio of funded projects is higher. Out of a total of 73 projects in the portfolio of mitigation projects, 27

projects are for renewable energy alone.

• There is a signifi cant uncertainty around how much climate-relevant fi nance is being disbursed through some

of the more traditional development projects under the more broadly based “Overseas Development Assistance”

(ODA). Looking at project profi les, however, indicates that nowadays most of these development projects contain

climate-relevant components and thus expenditure, although a quantifi cation of the climate-specifi c allocations is

diffi cult to impossible.

• There is a signifi cant uncertainty as to the usage of some of the domestic funds. For example, the exact purpose

and usage of the National Clean Energy Fund is still an open question.

• From the literature available and from our research it is also not fully clear how the state climate action needs

are being supported fi nancially. As of now, only projects and activities implemented by the states as part of the

National Action Plan on Climate Change seems to have budgetary support.

KEY FINDINGS

07


• However, the possibly redeeming situation for the states is that they also seem to have access to bi-lateral and

multi-lateral project fi nancing. A substantial number of projects are implemented in direct cooperation with states.

Out of the total of 97 climate projects fi nanced by international donors, some 57 are projects implemented in

direct cooperation with Indian states.

• In addition to the clean energy fund, which is to be funded by a cess on coal as its key source of revenue, there is

no dedicated domestic climate fi nance mechanism. However, we understand that the Ministry of Finance and the

Planning Commission are looking into this issue.

• On the institutional and governance aspect of climate fi nancing, all decisions seem to be taken by the Ministry of

Finance, based on the position advocated by Ministry of Environment and Forests, particularly in the context of

the UNFCCC process and discussions around climate fi nance. No other ministries or departments have so far had

a role to play in the decisions taken by India on climate fi nance. The government ministries so far largely excluded

from national climate change policy making include the Ministry of Renewable Energy, Ministry of Power, Ministry

of Urban Development, Ministry of Rural Development, Ministry of Agriculture, Ministry of Water Resources, and

Ministry of Transport amongst others.

• While India does not have any Measuring, Reporting, and Verifi cation (MRV) process to track project fi nancing or

fi nancial fl ows per se, all bi-lateral and multi-lateral fi nancial fl ows into the country is recorded by the Department

of Economic Affairs, Ministry of Finance. This information is made available online and fairly easily accessible.

35

• The issue of climate fi nance is important to a number of departments and ministries both at the Union Govern-

ment as well as at the State Government. It is therefore important that all decisions on climate fi nancing, whether

it is a “need assessment” or a “project and fi nancing determination” needs to be taken in coordination with all

concerned departments and ministries, and should involve State Planning Commissions.

• It is also important that the Government put in place a mechanism to involve civil society groups and other stake-

holders in decisions regarding climate fi nance.

• India needs to put in place a mechanism that is capable to raise domestic fi nance to meet the climate change

needs of the country. As of now, there seems to be only one dedicated fund, which is the National Clean Energy

Fund, with just one revenue source stream, which is “cess on coal”.

• India also needs to design a dedicated fi nancial and governance instrument to link national government climate

plans and state level expenditures on climate change, so as to improve the delivery of domestic climate fi nance.

• Further, India needs to put in place a domestic mechanism that can measure, report and verify (MRV) the various

fi nancial fl ows. It needs to go beyond mere reporting, but also look into qualitative aspects of fi nancial fl ows.

RECOMMENDATIONS

08

37

ANNEXURES


ANNEX IBi-laterally and Multilaterally Funded Adaptation Projects (Grants)

1. Agriculture:

Description of projects in the agriculture sector supported by grants

S. No. The Project and Descrip on Amount(in Million)

Agency

1 Mainstreaming Agro-biodiversity Conserva on and U liza on in Agricultural Sector to Ensure Ecosystem Services and Reduce Vulnerability The Project lays emphasis on conserva on, use of agro-biodiversity for resilience and encouraging sustainable produc on and benefi t sharing across 4 eco regions of India. This will help secure the maintenance of crop diversity and its adapta on to changing clima c condi ons& increasing farmers’ access to crop gene c resources, so that farmers benefi t from having locally adapted materials in popula on sizes large enough to buff er against change in climate and other factors and ensure sustainable agriculture

Time Period : 12th April 2013 (Date of Approval)

3.2 USD GEF

2. Forest and Biodiversity:

Projects in the forest and biodiversity sector supported by grants

Sl No.

The Project and Descrip on Amount ( In Million)

Agency

1. FOREST PLUS- Sustainable Forests And Climate Adapta on

The project will contribute to USAID/India’s Assistance Objec ve of accelera ng India’s transi on to a low emissions economy by taking REDD+ ac ons to scale. The project aims to reduce emissions from deforesta on and forest degrada on and enhance sequestra on through aff oresta on, conserva on, and sustainable management of forests in Madhya Pradesh, Himachal Pradesh, Sikkim & Karnataka

Time Period : 8th August 2012-30th September 2017

15 USD USAID

3. Water:

Table 12 - Projects in the water sector supported through grants

Sl No.

The Project and Descrip on Amount ( In Million )

Agency

1. DGP- WATER-Agriculture-Livelihood Security In India

To promote climate change adapta on and water sustainability while improving farmer livelihood and food security in 3 key regions namely Punjab, Gujarat& Jharkhand in India. This will be achieved through the following tasks: Task 1: Integrated assessment of the hydro-climatology, crops, water and energy systems. Task 2: Economic analysis of short and long term farmer and state level outcomes rela ve to climate, water and energy scenarios. Task 3: Farm level implementa on of specifi c water and energy saving methods. Task 4: Climate & market informed agricultural supply chain development. Task 5: Synthesis, results dissemina on & policy change s mula on

Time Period : 06/01/2012 - 05/30/2017 1st June 2012- 30th May 2017

1.73 USD USAID

39

ANNEX IIBi-laterally and Multilaterally Funded Adaptation Projects (Loans)

1. Disaster Recovery:

Disaster recovery projects supported through bilateral and multilateral loans

Sl No.

The Project and Descrip on Amount (In Million )

Agency

1 U arakhand Disaster Recovery Project

The objec ve of the U arakhand Disaster Recovery Project for India is to restore housing, rural connec vity and build resilience of communi es in U arakhand and increase the technical capacity of the state en es to respond promptly and eff ec vely to an eligible crisis or emergency.

Time Period: 25 Oct 2013- 31st December 2017

250 USD World Bank

2 Tamil Nadu and Puducherry Coastal Disaster Risk Reduc on Project

The objec ve of the Tamil Nadu and Puducherry Coastal Disaster Risk Reduc on Project for India is increasing the resilience of coastal communi es in Tamil Nadu and Puducherry, to a range of hydrometeorological and geophysical hazards along with improving project implementa on en es’ capacity to respond promptly and eff ec vely to an eligible crisis or emergency.

Time Period : 20 June 2013-31st July 2018

236 USD World Bank

3 Assam Integrated Flood and Riverbank Erosion Risk Management (FREM) Investment Program

The goal of the project is to support the economic and poverty reduc on eff orts of the state governments through integrated FREM along the Brahmaputra river and its tributaries. The Project aims to promote people’s livelihoods, through comprehensive FREM measures, which will provide protec on from river erosion and fl oods, with a focus on the most vital areas of economic and na onal interests. An adap ve process approach is proposed that will protect cri cal reaches fi rst, and then replicate suitable measures to other areas later. Nonstructural measures, including improved fl ood forecas ng and warning, fl ood plain zoning, community preparedness, etc. will be adopted with intensive stakeholder par cipa on

Time Period : (Approval date of the Facility concept) 19 Oct, 2010

177 USD ADB

4 India Na onal Cyclone Risk Mi ga on Project

The objec ve of the First Phase of the Na onal Cyclone Risk Mi ga on Project for India is to reduce the vulnerability of coastal communi es in Andhra Pradesh and Orissa to cyclone and other hydro meteorological hazards.

Time Period: 22nd June 2010- 31st October 2015

255 USD World Bank


2. Forest and Biodiversity

Projects in the forest and biodiversity sector supported by loans

Sl No. The Project and Descrip on Amount ( In Million )

Agency

1 Strengthening the Enabling Environment for Biodiversity Conserva on and Management in India

The project objec ve is to provide assistance in mee ng the na onal repor ng requirements to CBD by India which includes, revision of Na onal Biodiversity Strategy and Ac on Plan as well as prepara on of fi h Na onal Report for Biodiversity and second Na onal Report for Bio-safety.

Time Period : 29th June 2012- 8th May 2014

0.27 USD World Bank

2 Biodiversity conserva on and sustainable management of the forest of Assam

The project aims sustainable management of forest areas and biodiversity conserva on in Assam.

EUR 54 AFD

3. Water

Projects in the water sector supported through loans

S No. The Project and Descrip on Amount ( In Million )

Agency

1. Himachal Pradesh Watershed Management Project

The Project Development Objec ve is to (i) reverse the process of degrada on of the natural resource base and to improve the produc ve poten al of natural resources and incomes of the rural households in the project areas; and (ii) support policy and ins tu onal development to harmonize watershed development projects and policies across the State in accordance with best prac ces.

Time Period: 20th November 2012- 31st December 2018

8 USD World Bank

2. Improve the supply of drinking water to the city of Jodhpur

The project is to provide support to the Government of Rajasthan, in its urban development policy and help in op mizing the supply and distribu on of water in Jodhpur. This is specifi cally fi nancing the rehabilita on and extension of drinking water network in Jodhpur (Rajasthan). Thus the project aims to support the development of the city of Jodhpur in limi ng the impact on climate change by way of urban development.

Time Period: December 2010

EUR 71.1 AFD

41

ANNEX IIIBi-lateral and Multilaterally Technical Assistance Projects for Adaptation

1. Disaster Recovery:

Disaster recovery projects supported through technical assistance

S No. The Project and Descrip on Amount (In Million)

Agency

1 Opera onal Research to Support Mainstreaming of Integrated Flood Management under Climate Change

The Technical Assistance provided by ADB will undertake opera onal research to iden fy and test integrated fl ood mi ga on and fl ood plain management strategies appropriate for India. The strategies will balance structural and nonstructural measures and provide the mechanisms for mainstreaming IFM at diff erent government levels.

Time Period : 1st June , 2012 (Date of Approval)

420 USD ADB

2 Disaster Management Support

The project aims to reduce disaster risk in urban areas by enhancing ins tu onal capaci es to integrate climate risk reduc on measures in development programs as well as to undertake mi ga on ac vi es based on scien fi c analysis; and enhance community capaci es to manage climate risk in urban areas of Andhra Pradesh, Orissa, Rajasthan, Tamil Nadu, and Sikkim by enhancing their preparedness levels.

Time Period : 1st October 2012- 30th September 2015

1.62 USD USAID

3 Climate Resilience through Risk Transfer using Microinsurance Solu ons (RES-RISK)

The project goal is to enhance climate resilience and promote adap ve capaci es of vulnerable communi es (in Bihar and Maharashtra) through development, tes ng and promo on of risk transfer op ons and solu ons (climate insurance).

CHF 32 SDC

4 Increasing Resilience to Climate Impacts of Vulnerable Communi es and Cri cal Ecosystems in the Eastern Himalayas of India

A study funded by BMU will provide data to iden fy some of the most cri cal issues and sites for enhanced climate change adapta on, where it is apparent that climate impacts will render communi es and ecosystems more vulnerable unless certain prac ces are modifi ed. However, more detailed studies are needed to further refi ne strategies, and to iden fy and priori- se addi onal vulnerable areas and communi es. A feasibility study and a preliminary climate vulnerability assessment are therefore being fi nanced, as well as a fi rst implementa on of pilots on a minor scale in already iden fi ed sectors and regions.

Time Period :July 2009-December 2010

Source- h p://www.interna onal-climate ini a ve.com/en/projects/projects/

EUR 0.2 KfW


2. Agriculture

Agriculture projects supported by technical assistance

Sl No.

The Project and Descrip on Amount(in Million)

Agency

1 Sustainable Rural Livelihoods and Security through Innova ons in Land and Ecosystem Mgmt /Addi onal GEF fi nancing to India NAIP

The addi onal fi nancing from the Global Environmental Facility (GEF) for India Sustainable Rural Livelihoods Security through Innova ons in Land and Ecosystem Management Project will support the development and implementa on of innova ons in agriculture through collabora on among fanners, private sector, civil society, and public sector organiza ons. The GEF support is incremental to the original project and will fi nance ac vi es that address specifi cally land degrada on, biodiversity and adapta on to climate change. The GEF support will also pilot local opera onaliza on of adapta on strategies to climate change. The global objec ve of the project for addi onal fi nancing is to strengthen ins tu onal and community capacity on sustainable land and ecosystem management approaches and techniques for restoring and sustaining the natural resource base, including its biodiversity, while taking account of climate variability and change.

Time Period : 4th October 2009- 30th June 2014

7.34 USD GEF

2 Sustainable Livelihoods and Adapta on to Climate Change (SLACC)

The Project aims at reducing the vulnerability of climate variability and change with the help of community based interven ons in selected agro-ecological zones. The project focuses on the inclusion of small farmers, landless, migrant labor, and other social, economic and geographic popula on groups which are most vulnerable to climate variability and change.

Time Period : 7th June 2012 (Date of Approval)

8 USD GEF

3 Strengthening the capaci es of communi es and ins tu ons to adapt to climate change in semi-arid and rain-fed regions

The project aims at enhancing the capaci es of the rural communi es in village clusters of Maharashtra, Madhya Pradesh and Andhra Pradesh to adapt to climate change impacts.

Time Period: April 2009- March 2014

CHF 4.9 SDC

3. Forest and Biodiversity:

Projects in the forest and biodiversity sector supported by technical assistance

Sl No.


Agency

1. Par cipa ng Agency Partnership Agreement (Papa) – U.S. Forest Service

The purpose of this USFS PAPA is to build capacity of MoEF to take REDD+ (Reducing Emissions from Deforesta on and Forest Degrada on) ac ons to scale. Ac vi es under this PAPA are divided into two phases. Phase 1 covers trainings to bolster Indian exper se in comple ng carbon es ma ons, forest inventories, and related analyses. Ac vi es in Phase 2 will build upon momentum generated during Phase 1 to implement and improve data collec on and decision-making tools for forest resources (including carbon) assessments, and monitoring & management at mul ple scales.

Time Period : 1st August 2010-30th September 2014

1.25 USD USAID

43

Sl No.


Agency

2 Conserving Biodiversity in Mountain Landscape

To strengthen ins tu onal capaci es for conserva on of globally signifi cant biodiversity in produc on forests of central Indian highlands and Western Ghats hotspot with co-benefi ts of enhanced carbon sequestra on and sustainable fl ow of ecosystem services.

Time Period: 29th February 2012- 28th February 2013

0.089 USD UNDP

3 Mainstreaming Coastal and Marine Biodiversity into Produc on Sectors in Sindhudurg Coast in Maharashtra

The Project aims to mainstream biodiversity conserva on into Sindhudurg coastal district’s produc on sectors. It also seeks to generate awareness among local communi es on biodiversity conserva on amidst the threat of unsustainable fi shing prac ces, rising pollu on from fi shing vessels and mari me traffi c in the region.

Time Period : 2011-2016

3.4 USD UNDP

4. Strengthening Ins tu onal Structures to Implement the Biological Diversity Act

The Project aims to enable eff ec ve implementa on of the na onal biodiversity policy framework in India, the project, in partnership with the Ministry of Environment and Forests, aims to strengthen ins tu onal capaci es at na onal and state levels, and ini ate behavioral changes to manage natural resources in an integrated, par cipatory and sustainable manner.

Time Period : 2009-2012

1.18 USD UNDP

5. Integrated Biodiversity Conserva on and Ecosystem Services Improvement

To strengthen ins tu onal capaci es for conserva on of globally signifi cant biodiversity in produc on forests of central Indian highlands and Western Ghats hotspot with co-benefi ts of enhanced carbon sequestra on and sustainable fl ow of ecosystem services.

Time Period: 7th June 2012 (Date of Approval)

20.5 USD GEF

6. Strengthening Livelihood Security and Adap ng to Climate Uncertainty in Chilika Lagoon, India

This grant will allow Wetlands Interna onal South Asia (WISA), in collabora on local stakeholders, to iden fy management op ons for reducing risk and increasing community preparedness for changes in wetland systems due to climate variability. Researchers will elaborate scenarios of changes in ecosystem services due to climate variability; assess current coping mechanisms within vulnerable communi es; demonstrate op ons for enhancing livelihood resilience through pilot interven ons; formulate a “climate smart” plan for wetland management; and build the capacity of wetland managers to respond to climate change, par cularly as it concerns livelihood resilience.

Time Period : 15th November , 2011 – 15th November ,2014

0.5 USD IDRC

7. Sustainable Management of Coastal and Marine Protected Areas

The project is developing and implemen ng par cipatory models for protec ng and sustainably managing selected protected areas in coastal zones with the aim of preserving biodiversity and the livelihoods of the local popula on. Training measures improve the knowledge base and capaci es of the Indian partners in co-management and expand the opportuni es for Indian business and local interest groups to par cipate.

Time Period: August 2012 – July 2014


9.6 EUR GIZ


4. Water:

Projects in the water sector supported through technical assistance

Sl No.


Agency

1 Sustainable Coastal Protec on and Management Investment Program

The investment program will address immediate coastal protec on needs and coastal instability using environmentally and socially appropriate solu ons, with a focus on so er op ons such as ar fi cial reefs, beach nourishments, and dune management in the states of Goa, Karnataka, and Maharashtra. It will also develop ins tu onal capaci es to meet the long-term needs of sustainable coastal protec on and management, and support ini a ves to increase the par cipa on of the private sector and communi es in coastal protec on and management.

Time Period : 29th September 2010 (Date of Approval)

301.55 USD ADB

2 Support for the Na onal Ac on Plan on Climate Change

ADB provided Technical Assistance to support ac on at the central and state levels to move the Na onal Water Mission (NWM) of the Na onal Ac on Plan on Climate Change (NAPCC) recommenda ons towards a viable and programmed set of ac vi es and investments. The TA has been designed to engage in strategic planning and the development of frameworks that will help meet India s needs for sustainable and robust water resources systems for climate change adapta on. The project will build on exis ng studies and on-going na onal and interna onal research outputs.

Time Period : 29th September 2010 (Date of Approval)

0.95 USD ADB

3 Karnataka Watershed Development II

The objec ve of the Second Karnataka Watershed Development Project for India is to demonstrate more eff ec ve watershed management through greater integra on of programs related to rainfed agriculture, innova ve and science based approaches, and strengthened ins tu ons and capaci es.

Time Period: 6th August 2012- 31st December 2018

60 USD World Bank

4 What is the evidence about glacier melt across the Himalayas?

The aim of the project is to conduct a rigorous systema c review, to discern what is the evidence of glacier melt across the Himalayas, and support policy-making in the region. The region covered within the scope of this review contains the mountainous regions of the Hindu Kush, Karakoram and Greater Himalaya mountain ranges. These mountainous regions are the source of several major rivers, including the Indus, Ganges, and Brahmaputra. The review will be par cularly useful to those responsible for regional water resource planning and natural hazard management.

Time Period: 1st May 2010- 23rd February 2012

£4.73 DFID

5 Indian Himalayas Climate Adapta on Programme (IHCAP)

The goal of the bi-lateral coopera on programme is that the resilience of the vulnerable communi es in the Himalayas is strengthened and knowledge and capaci es of na onal research ins tu ons and adapta on planning and implementa on at state level are connected and enhanced by facilita ng policy dialogue between Himalayan States.

Time Period : April 2012- March 2015

CHF 3.5 SDC

45

5. Cross-Cutting Areas:

Projects under this category, supported through Technical Capacity Development.

Sl No.


Agency

1 Capacity Building for Addressing Climate Change

To ensure that na onal climate change policies are modifi ed or adapted to meet the needs of the states, in partnership with the Ministry of Environment and Forests, Government of India, this project aims to strengthen capaci es of state governments and other stakeholders both na onally, and across the states to address climate change challenges.

Time Period:2010-2012

0.75 USD UNDP

2 Strengthening of Madhya Pradesh Climate Change Cell

The project aims to develop MP Climate Change Cell into a knowledge management centre to eff ec vely manage and disseminate knowledge related to climate change

Time Period: 2009-2012

0.36 USD UNDP

3 Ins tu onal Support to Policy Research Organiza ons in India

It is a mul -donor program dedicated to strengthening independent policy research ins tu ons, or “think tanks,” in developing countries, thereby enabling them to produce sound research that both informs and infl uences policy. This grant will strengthen the ability of the nine research ins tu ons in India to provide, disseminate and communicate high-quality research. It will do so through measures aimed at enhancing the ability of staff to conduct sound research, improving organiza onal performance and forging links with policymakers.

Time Period : 9th January , 2010 – 9th January, 2014

12.64 USD IDRC

4 Strengthening Adapta on Capaci es and Minimizing Risks of Vulnerable Coastal Communi es in India

The project aims to reduce the vulnerabili es of coastal communi es and ci es in Tamil Nadu and Andhra Pradesh, India, to climate change and strengthen capaci es of local authori es and the popula on on climate change adapta on, climate change mi ga on and disaster risk reduc on.

Objec ves:

• Create and implement measures for climate adapta on as well as mi ga on and disaster risk reduc on in coastal communi es, support local authori es in addressing related challenges.

• Develop and carry out pilot ini a ves on adapta on and mi ga on in rural communi es (e.g. by improving local infrastructure).

• Improve capaci es and decision making skills of local bodies and communi es on adapta on and mi ga on and provide advisory services on disaster risk management,Create public awareness, improve regional and global visibility of the project and s mulate networking.

Time Period : December 2010 – December 2013

0.07 Euros EU


ANNEX IVBi-laterally and Multilaterally Funded Mitigation Projects (Grants)

1. Electricity and Energy:

Projects in Electricity and Energy sector supported by grants are listed below:

S No.

The Project and Descrip on Amount (in Millions)

Agency

1 Partnership to Advance Clean Energy-Deployment (PACE-D)

The program will contribute to accelera ng India’s transi on to a high performing, low emissions, and energy secure economy. The program has three components, 1) Improving end use effi ciency, 2) Increasing supply of renewable energy, 3) Accelera ng deployment of cleaner fossil technologies.

Time Period: 31st May 2012- 30th May 2017

19.5 USD USAID

2 Market Development and Promo on of Solar Concentrators Based Process Heat Applica ons in India

The project, supported by the Ministry of New and Renewable Energy, Government of India, aims to promote and develop a viable and strong market for solar concentrators in India to reduce or replace use of conven onal fuels that degrade the environment.


4.4 USD UNDP-GEF

3 Energy Effi cient Commercial Buildings

The project, in partnership with the Ministry of Environment and Forests, aims to reduce energy consumed by large commercial buildings by integra ng appropriate design interven ons such as ligh ng, hea ng, ven la on and air-condi oning systems in buildings.


5.2 USD UNDP-GEF

4 Removal of Barriers to Biomass Power Genera on in India, Phase I

The project aims to accelerate the use of environmentally sustainable biomass power and co-genera on technologies in the country and improve electricity supply through renewable energy sources.


5.65 USD UNDP-GEF

5 Access to Energy-Enhancing Eff ec veness in Electricity Distribu on and End-uses (2009-2012)

The project aims to demonstrate mechanisms for the eff ec ve management of electricity at the district and community levels and to support ac vi es to enhance electricity service delivery in the states of Orissa and Chha sgarh. The project introduced energy effi ciency measures (like CFL) in gram panchayats resul ng in a 35 percent reduc on in electricity consump on from the baseline.


0.343 USD UNDP

6 Facility for Low Carbon Technology Deployment

This proposed Facility will facilitate and advance technology transfer across sectors, industries, academia and countries to promote energy effi ciency and other climate change mi ga on measures. This facility is being proposed by the Government of India under its comprehensive measures to combat climate change, without compromising the emerging economy growth path to alleviate poverty.

Time Period: 7th June 2012 (Approval Date)

9 USD GEF

47

S No.

The Project and Descrip on Amount (in Millions)

Agency

7 Indo-Swiss Programme on Building Energy Effi ciency, Phase 1

Indo-Swiss Programme on Building Energy Effi ciency, Phase 2

The bi-lateral programme focuses on reducing energy consump on in new buildings (residen al and public) and promo ng best prac ces in designing and applying energy effi cient measures.

Time Period: October 2008- December 2012 (Phase 1)

December 2012- December 2016 (Phase 2)

CHF 2.1

CHF 4.8

SDC

8 Accelera ng use of Biomass for Clean Energy Services

The project goal is to accelerate the diff usion and adop on of biomass based energy systems (two-stage power gasifi er and thermal gasifi er) so that the consumers – rural communi es and small-scale enterprises – secure access to clean energy services.

Time Period: July 2012-June 2015

CHF 2.4 SDC

9 Partnership to Advance Clean Energy- Research (PACE-R)

PACE-R works to improve energy access and promote low-carbon growth through research and development. Research will focus on transforma onal scien fi c and technological coopera on in the areas of building effi ciency, solar energy, and advanced biofuels.

Time Period - Time Period: 31st May 2012- 30th May 2017

125 USD USAID

10. PRODUCING ENERGY FROM WASTE AND SEWAGE

The project is reducing greenhouse gas emissions in the Indian city of Nashik by using sewage and organic waste to produce energy. One of the inten ons of the project is to demonstrate a technical solu on that is reproducible and fi nancially feasible in densely populated urban areas and is in harmony with the Indian government’s climate change targets.

Time Period: December 2009 – May 2014


2.03 EUR GIZ

11. Climate-Neutral Energy Supply for Rural Areas

The project is aimed at developing tailor-made and sustainable solu ons for rural energy supply that make use of locally available biomass as well as other renewable energy sources. Two pilot projects covering 30 villages are being used to develop business models for energy services that are made available by the village community. This includes the sustainable supply of biomass for power genera on, opera on and maintenance of the plant and equipment, and the distribu on and use of the power, along with an appropriate system of payment.

Time Period : November 2008- December 2013


4.627 EUR GIZ

2. Transport:

Projects in Transport sector supported through grants are as follows:

Sl No. The Project and Descrip on Amount (in millions)

Agency

1 Effi cient and Sustainable City Bus Services

Promo ng sustainable modes of transport through a more comprehensive focus on city bus transport. It will support improvements in the policy and regulatory environment and moderniza on of bus services in selected Indian ci es, aimed at making these services more a rac ve and convenient to personal motor vehicle users and thereby lead to a modal shi . Such a modal shi will result in (i) increased share of energy effi cient and low carbon transport usage, (ii) improved energy effi ciency in the movement of non-public transport traffi c due to reduced conges on, (iii) reduced air pollu on, easier access to aff ordable and effi cient transport, and other local issues.


9.2 USD GEF


3. Industry:

The following is a description of the projects under this category, in the form of grants:


Agency

1 Up-scaling Energy Effi cient Produc on in Small Scale Steel Industry in India

The project, in partnership with the Government of India and supported by AusAid, aims to upscale energy effi cient interven ons in the steel re-rolling mills sector and other sub-sectors of the small scale steel industry in India. This will enable mi ga on of GHG emissions and lead to improvement in produc vity.


0.95 USD UNDP

2 Energy Conserva on in Small Sector Tea Processing Units in South India

The project, in partnership with the Ministry of Commerce, Government of India, aims to introduce energy conserva on measures in the fi rewood intensive tea sector in south India by addressing informa on, technology and fi nancial barriers that stand in the way of greater adop on of energy conserva on technologies and prac ces.


0.012 USD

0.95 USD

UNDP

GEF

3 Energy Effi ciency in Steel Re-rolling Mills

Steel produc on is an energy-intensive process that generates a large amount of solid waste and greenhouse gases. In partnership with the Ministry of Steel, Government of India, the project aims to increase energy effi ciency of steel re-rolling mills sector, reduce associated emissions and enable penetra on of environmentally-sustainable, energy effi cient technologies in this sector.


6.75 USD UNDP-GEF

4 Achieving Reduc on in GHG Emissions through Advanced Energy Effi ciency Technology in Electric Motors

The ability to eff ec vely address acute electricity shortages in India will depend cri cally on the increased effi ciency of electrical appliances. Supported by the Bureau of Energy Effi ciency, this project aims to demonstrate greater energy effi ciency in one key energy intensive sector – electrical motors.


0.049 USD UNDP-GEF

5 Promo ng Industrial Energy Effi ciency Through Energy Management Standard, System Op miza on and Technology Incuba on

The project will serve a dual objec ve of (i) promo ng energy effi ciency by introducing the ISO energy management standard 50001 and integra ng system op miza on prac ces in industry; and (ii) facilita ng forma on of technology incubators to catalyze innova on and technology transfer for cross-cu ng technologies


4.54 USD GEF-UNIDO

6 Organic Waste Streams for Industrial Renewable Energy Applica ons in India

The proposed project will focus on using organic waste streams for industrial renewable energy (RE) applica ons in SMEs, in line with the priori es of the Government of India (GoI), as outlined in the Na onal Ac on Plan on Climate Change (NAPCC) and relevant Na onal Missions, including the Na onal Mission for Enhanced Energy Effi ciency in Industry (NMEEE), with the overall aim to increase the compe veness of SMEs and reduce dependency on fossil fuels.

Time Period: 12th April 2013

3.413 USD GEF-UNIDO

49


Agency

7. Conver ng a Produc on Facility to the Manufacture of Climate-Friendly Air-Condi oning Equipment

The project is assis ng an Indian manufacturer of air-condi oning systems in conver ng to environmentally compa ble hydrocarbon refrigerants and energy-effi cient technology, thereby establishing a best-prac ce model. Produc on and service technicians receive training in the safe handling of fl ammable refrigerants and maintenance of the equipment. The project partners are also developing an ac on plan (including fi nancial instruments and market-based incen ves) to promote the market launch of energy-effi cient air-condi oning systems that do not use fl uorinated greenhouse gases.

Time Period : December 2008 – May 2013


2.062 EUR GIZ

8. Eco-Industrial Parks in Andhra Pradesh

The purpose of the project is to support the process of structural change towards improved environmental performance and to break the link between economic growth and resource consump on in India by developing and implemen ng the concept of eco-industrial parks. The project supports selected exis ng industrial parks in the planning and implementa on of energy and resource-saving measures. It also advises the parks on the introduc on of climate, environmental and energy audits and the monitoring of greenhouse gas emissions. In addi on, decision-makers and experts from the partner organisa ons and the industrial parks receive training in energy and resource effi ciency.

Time Period : November 2008- December 2010


0.72 EUR GIZ


ANNEX VBi-laterally and Multilaterally Funded Mitigation Projects (Loans)

1. Electricity and Energy:

Projects in this sector supported by loans are listed below:

S No. The Project and Descrip on Amount (in Millions)

Agency

1 Vishnugad Pipalko Hydro Electric Project

The objec ves of the Vishnugad Pipalko Hydro Electric Project are: a) to increase the supply of electricity to India’s na onal grid through the addi on of renewable, low-carbon energy; and b) strengthen the ins tu onal capacity of the borrower with respect to the prepara on and implementa on of economically, environmentally and socially sustainable hydropower projects.

Period: 30th June 2011- 31st December 2017

648 USD World Bank

2 Punjab High Voltage Distribu on System

The development objec ves of the Punjab High Voltage Distribu on System Carbon Off set Project for India are to: reduce global emissions of carbon dioxide; increase the effi ciency, reliability, and quality of electricity supply in the local distribu on system of Punjab State Electricity Board (PSEB). This carbon off set project consists of the purchase of ERs generated by reduc on in technical and commercial losses achieved by PSPCL through implementa on of High Voltage Distribu on System (HVDS) for agricultural consumers.

Period: 24th September 2010-31st December 2019

10 USD World Bank

3 Bhakra Beas Management Board (BBMB) Hydro Power Rehab Project - Carbon Finance

The objec ve of the Project is to improve the reliability, effi ciency and safety of the opera on of Bhakra Beas Management Board’s (BBMB) hydraulic structures and genera on equipment to meet the increasing demand for power in the Northern Electricity Grid of India through exis ng clean renewable energy resources. The global environment objec ve of this Project is to reduce the emissions of GHG gases by using market-based mechanisms sanc oned under the Kyoto Protocol to support clean energy projects in India. This will be achieved through: (i) the genera on of renewable energy which will displace thermal power units, and (ii) the improvement of energy effi ciency through the rehabilita on and replacement of exis ng outdated and ineffi cient equipment.

Time Period: 1st June 2010- 31st December 2018

2.9 USD World Bank

4 Karnataka Wind

The project involves implementa on of a 29.7MW wind power project at two villages in the district of Davangere in the Indian state of Karnataka - Arasinagundi (13.20MW) and Anabaru (16.50MW). The proposed development objec ves of the Carbon Off set Project are:

• Increase renewable power genera on.

• Reduce global emissions of carbon dioxide.

The objec ves of this World Bank Carbon Off set Project are consistent with the developmental and poverty reduc on objec ves of the Government of India.

Time Period: 24th December 2009- 31st December 2013

13.59 USD World Bank

51


Agency

5 Street Ligh ng Energy Effi ciency

The proposed development objec ves of the Carbon Off set Project are:

• Contribute to sustainable development by improving energy effi ciency of street ligh ng applica ons at par cipa ng municipali es

• Reduce global emissions of carbon dioxide

Time Period: 17th December 2009- 31st December 2015

8.12 USD World Bank

6 Chiller Energy Effi ciency

India - Chiller Energy Effi ciency Project - MP Component

The objec ve of the Chiller Energy Effi ciency Project (CEEP) for India is to reduce greenhouse gas emissions whilst simultaneously suppor ng the comple on of the phase-out of consump on of ozone deple ng substances required under the Montreal Protocol. There are four components to the project. This involves provision of incen ves for investment in energy effi cient chillers, technical assistance to support project readiness and sustainability focusing on enhancing the awareness of relevant stakeholders in energy conserva on measures etc.

Time Period: 30th June 2009- 30th June 2014

6.3 USD

1 USD

World Bank

7 Coal-Fired Genera on Rehabilita on

The objec ve of the Coal Fired Genera on Rehabilita on Project for India is to improve energy effi ciency of selected coal-fi red power genera on units through renova on and moderniza on (R&M) and improved opera ons and maintenance (O&M). The global environmental objec ve of the project is the reduc on of greenhouse gas emissions through energy effi cient rehabilita on of coal-fi red power plants.

Time Period: 18th June 2009- 30th November 2014

45.4 USD World Bank

8 Rampur Hydropower Project

The development objec ve of the Rampur Hydropower Project is to improve the reliability of India’s Northern electricity grid through the addi on of renewable, low carbon energy from the Rampur hydropower project; and to improve the eff ec veness of Satluj Jal Vidyut Nigam Limited (SJVN) with respect to the prepara on and safe implementa on of economically, environmentally, and socially sustainable hydropower projects.

Time Period: 13th September 2007- 31st December 2014

400 USD World Bank

9 Himachal Pradesh Clean Energy Development Investment Program (Facility Concept)

Himachal Pradesh Clean Energy Development Investment Program Tranche 1



The proposed Program combines physical investments in hydroelectric power genera on in the state of Himachal Pradesh (HP) with nonphysical interven ons in capacity development. The main objec ve is to help fulfi ll local energy demand. Surplus power generated, par cularly due to strong river fl ows from the spring snow melt, will be exported to the northern grid, thus serving as an important source of revenue for the state.

Time Period: 23rd October 2008- 8th December 2011

800 USD

150 USD

208 USD

60 USD

ADB

10 Gujarat Solar Power Transmission Project

The project aims at developing the transmission infrastructure for evacua on of power in a reliable manner from the solar power genera on plants to be located in the 2,500 hectares Charanka solar park located in Patan district of Gujarat. The solar park will site over 500 MW of both solar photovoltaic (PV) and concentrated solar power (CSP) plants.

Time Period: 12th September 2011

100 USD ADB



Agency

11 Solar Photovoltaic Plant Sakri

125 MW solar PV power plant to be constructed by MAHAGENCO at Shivajinagar, Sakri, in the Dhule district of Maharashtra with the op on for further expansion by 25 MW.


EUR 250 KfW

12 Energy Projects (14)

In India, about 14 energy sector projects with KfW loan commitments of more than €1.5 billion are currently in various stages of execu on in India. The main objec ve of the German Government is to work together with the Indian Government in facilita ng inclusive growth, reducing poverty and mee ng the Millennium Development Goals.

Time Period: Projects in various stages of Execu on as on 8th March 2011

(h p://www.india.diplo.de/contentblob/3159058/Daten/1170174/DD_PR_08Mar.pdf)

EUR 1500 KfW

13 Promo on of renewable energies and energy effi ciency through IREDA

KfW’s fourth line of credit is dedicated to the promo on of new renewable energy and aims to promote innova ve renewable energy business models, involving either new technologies, fi nancing mechanisms or ins tu onal arrangements across a variety of renewable energy sources – solar, wind, biomass and cogenera on as well as small hydro. Under this latest and on-going line of credit, fi ve biomass and cogenera on projects (95 MW), four small hydro projects (55 MW) and six photovoltaic projects (15 MW) have been supported up to now.

Time Period: March 2011 (Approval Date)

EUR 200 KfW

14 Promote the development of renewable energy in India

The project provides public fi nancial ins tu on IREDA a credit line to refi nance loans that the ins tu on agrees to invest in renewable energy based electricity produc on. This aims to promote renewable energy projects by independent energy producers by implemen ng a renewable energy technologies (biomass, cogenera on, small-scale hydropower, wind power projects, photovoltaic and solar thermal).

Time Period: December 2010-Present

EUR 70 AFD

15 Finance biodigester: reduce emissions of greenhouse gas emissions by improving the living condi ons of popula ons

The objec ve of this project is to accelerate and achieve larger scale NGO programs that contribute to the mi ga on of greenhouse gas emissions (GHG) while improving the lives of people who should be in the access to carbon credit market an extra source of income. The project will lead to genera on of Biogas for energy produc on in rural areas and reduc on in deforesta on.


EUR 0.5 AFD

53

2. Transport:

Projects supported by loans in this sector are listed below:


Agency

1 Jaipur Metro Rail Line 1-Phase B Project

In January 2010, the government of Rajasthan established the Jaipur Metro Rail Corpora on (JMRC) as a special purpose vehicle to implement the metro rail lines. Line 1-Phase A (9.7 km elevated por on from Mansarovar to Chandpole), es mated to cost about $400 million and fi nanced en rely by the government, is nearing comple on and is expected to begin commercial opera on in late 2013. The proposed ADB loan is to help fi nance Line 1-Phase B, consis ng of the 2.3 km underground por on from Chandpole to Badi Chopar, with two sta ons for comple on and opera on by early 2018.The project is consistent with the country’s development goal of achieving faster, more inclusive and sustainable growth. It is well aligned with the Na onal Urban Transport Policy to address mobility challenges and improve the quality of life in the urban ci es of India.

Time Period: 20th November 2013

176 USD ADB

2 Sustainable Urban Transport Project

The objec ve of the Sustainable Urban Transport Project (SUTP) for India is to promote environmentally sustainable urban transport in India and to improve the usage of environment-friendly transport modes through demonstra on projects in selected ci es. This restructuring, involves four components. The fi rst is the cancella on of the Pune City Demonstra on Project under Component 2 of the Project and realloca on of the GEF+IBRD funds from Pune, Government of Maharashtra to Hubli-Dharwad, Government of Karnataka, a new city being inducted into the SUTP. The second is the cancella on of other works and goods associated with implementa on of the bus rapid transit system in Pimpri-Chinchwad, Government of Maharashtra (under sub-component (3b) and Goods under subcomponent (3) of Part 2B of the Project), with realloca on to Hubli-Dharwad, Government of Karnataka. The third is an increase in the fi nancing percentage for consultants’ services and training under Part I of the Project on Capacity Development Assistance for Urban Transport (Component IB) in the GEF Grant Agreement from 91% to 100%.

Time Period: 10th December 2009- 30th November 2015

105.23 USD World Bank

3. Industry:


Agency

1. Improve the energy effi ciency of Indian SMEs

This project allows SIDBI to promote access to credit for SMEs through investments energy offi cials, primarily through direct loans, but also through lines granted to commercial banks.

More specifi cally, the project aims to:

- Suppor ng business in the implementa on of ac ons leading to reduce specifi c fuel consump on (energy consumed per unit of produc on) and limit their emissions of Greenhouse Gases (GHGs) without limi ng their growth;

- Encourage businesses to iden fy and implement ac ons aimed at the use of renewable energy;

- Develop exper se and necessary in the promo on of energy effi ciency in SIDBI and facilitate the dissemina on of these prac ces from other partner banks instruments.

Time Period: December 2009

EUR 50 AFD (Indo-French Development Coopera on)


4. Cross Cutting Areas:

The following is a description of projects under this category supported by loans:


Agency

1 Carbon Financing for Improved Rural Livelihoods Project

The proposed AR-CDM (An Aff oresta on Project under Clean Development Mechanism project) will mobilize and encourage resource poor farmers to raise planta ons of tree species with high rates of carbon removal in their farmlands. The proposed AR-CDM project ac vity will also help explore and demonstrate the technical and methodological approaches related to a credible carbon removal process. This will be a pilot ini a ve that aims at improving rural livelihoods through “Carbon Sequestra on” by adop ng environment friendly technologies based on agro-forestry prac ces.

Time Period: 8th May 2007- 31st December 2018

1 USD World Bank

55

ANNEX VIBi-lateral and Multilaterally Technical Assistance Projects for Mitigation

1. Electricity and Energy

Technical assistance projects in this sector are listed below:

Sl No. The Project and Descrip on Amount (in Millions)

Agency

1 Development of the Interna onal Center for Applica on of Solar Energy Technologies

The Technical Assistance Program will help IIT–Rajasthan and other agencies, e.g., the state government of Gujarat, to ins tu onalize and opera onalize solar energy and smart-grid development func ons. It will support knowledge ins tu ons in capacity development, research and development, technology transfer and deployment, knowledge sharing, and pilot tes ng in solar thermal and solar photovoltaic energy, hybrid solar energy, smart grids, and thermal-to-cooling and thermal-to-thermal technologies. The TA complements the recently approved ADB TA for Capacity Building for Commercial Bank Lending for Solar Energy Projects in India.

Time Period: 17th May 2011 (Approval Date)

200 USD ADB

2 Rajasthan Renewable Energy Transmission Investment Program (Facility Concept)

Rajasthan Renewable Energy Transmission Investment Program - Tranche 1

The project aims at expanding bulk power transmission system in Rajasthan and developing the ins tu onal capacity for renewable energy parks and transmission system in the state. The Program would support transmission facili es for evacua on of renewable energy to the state and na onal grid. The impact of the project will be Accelerated development of renewable energy sources in Rajasthan and India.

Time Period: 26th September 2013 (Facility Concept)

22nd October 2013 (Tranche 1)

300 USD

62 USD

ADB

3 Concentrated Solar Power Project

A project preparatory technical assistance (PPTA) is required to support the Ministry of New and Renewable Energy (MNRE) and Solar Energy Corpora on of India Limited (SECI) to structure the proposed Concentrated Solar Power Project and carry out required project due diligence on technical, economic, fi nancial, legal and safeguard aspects. The PPTA will also assess and review the capacity requirements of SECI to facilitate and monitor implementa on of concentrated solar power (CSP) sub-projects.

Time Period: 20th September 2012 (Approval Date)

1 USD ADB

4 Support to Jawaharlal Nehru Na onal Solar Mission

The project aims to support capacity development of Ministry of New and Renewable Energy to take forward the pilot projects proposed under the Jawaharlal Nehru Na onal Solar Mission (JNNSM). it also aims to Strengthen the capacity of MNRE and other relevant ins tu ons in developing new solar power technologies impact The impact of the project will be development of Solar power technologies to support energy security and low carbon energy development.

Time Period: 18th November 2011

225 USD ADB



Agency

5 Clean Energy Finance Investment Program

The Clean Energy Finance Investment Program (the Program) is a proposed mul -tranche fi nancing facility (MFF) in the nature of a fi nancial ins tu on loan with sovereign guarantee by India, which will support the Indian Renewable Energy Development Agency Limited (IREDA) to obtain longer tenor funds for on-lending to sub-borrowers for renewable energy (RE) and energy effi ciency (EE) projects for up to 15 years. This program will support IREDA in fi nancing such projects which are otherwise eligible for ADB fi nancing, but would not be directly fi nanced due to their smaller sizes ranging between $5 million to $15 million. Outputs will include a large number of investment subprojects for genera on of RE using sources such as wind, biomass, hydro, solar, and cogenera on, and projects for improving demand-side EE.

Time Period: 9th May 2013 (Approval Date)

225 USD ADB

6 Gujarat Solar and Smart Grid Development Investment Program

The proposed Gujarat Solar and Smart Grid Development Investment Program (the Program) will be a Mul Tranche Financing Facility (MFF) to develop the transmission and distribu on network in Gujarat. Support will be provided for grid connected solar PV to meet day me demand in rural areas (including agriculture) and for distribu on of electricity through smart high voltage distribu on system (S-HVDS) in two distribu on companies. In addi on, transmission evacua on and grid stabiliza on related infrastructure including for solar power transmission would be developed

Time Period: 5th March 2012 (Approval Date)

350 USD ADB

7 Energy Effi ciency Technology Commercializa on And Innova on

This program is being implemented through four phases: 1. Consulta ons to understand the India regulatory and business environment that may impact shale gas. 2. Prepare a comprehensive report on the regulatory and fi scal regime for India and outline recommenda ons to encourage foreign investment in explora on and produc on of shale gas. 3. Organize a seminar in India to discuss the report. 4. Respond to specifi c needs of the GoI such as assistance with dra ing regula ons and crea ng fi nancials models.

Time Period:1st June 2011- 30th June 2012

0.3 USD USAID

8 South Asia Regional Ini a ve for Energy Integra on (SARI/EI)

The program promotes energy security in South Asia through three ac vity areas:

(1) cross border energy trade

(2) energy markets

(3) clean energy access

Through these ac vi es SARI/Energy promotes more effi cient regional energy resource u liza on, works toward transparent and profi table energy prac ces, mi gates the environmental impacts of energy produc on and increases regional access to energy. The program would catalyze enabling systemic condi ons for regional energy integra on through forma on and support to three Task Forces (TFs) focusing on the following three components: 1) Harmoniza on of Policy, Legal, and Regulatory mechanisms 2) Advancement of Transmission Systems Interconnec ons and 3) Establishment of South Asia Regional Electricity Markets. The SARI/EI program covers the following eight countries of the region: Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka. Disclaimer: This project has na onal coverage, however its ac vi es may not cover all states.

Time Period: 10/01/2012 - 09/30/2017

9.17 USD USAID

57


Agency

9 Access to Clean Energy

The project, in partnership with the Ministry of New and Renewable Energy, Government of India, aims to enhance access to clean and renewable energy for livelihoods in remote un-electrifi ed villages in the selected seven United Na ons Development Assistance Framework states of India. The project aims to enhance access of rural livelihoods to clean and renewable energy in remote un-electrifi ed villages of UNDAF states. This include Pilot ini a ves have been chosen to demonstrate as business models for further up-scaling, Market development for renewable energy technology products and

Promo on of livelihood ac vi es


2 USD UNDP

10 Transforming and Strengthening the Global Solar Water Hea ng Market

As part of a six-country global project across Albania, Algeria, Chile, India, Lebanon and Mexico, the India project referred to as the global solar water hea ng (GSWH) project was started in December 2008. The GSWH project aims to accelerate the transforma on of the SWH market through crea ng awareness on SWH technologies; providing quality assurance by helping set standards and specifi ca ons; demonstra ng innova ve investment methods; building the needed capaci es in the supply chain; and helping establish a suppor ve regulatory environment.


0.08 USD (Approximate fi gure for India out of 6 countries)

UNDP-GEF

11 Promo ng Business Models for Increasing Penetra on and Scaling up of Solar Energy

Promo on of solar energy based hea ng and cooling applica ons in selected industrial sectors by Developing Business models to reduce greenhouse gas (GHG) emissions. The Project will thus promote the deployment of low-carbon technologies in developing countries by pu ng together bankable projects and helping the market transform towards a larger absorp on of new and innova ve technologies that have the capacity to generate global environmental benefi ts.

Time Period: 29th February 2012 (Approval Date)

4.45 USD GEF

12 Green Energy Corridors

With an inten on to foster the increased use of renewable energy in India through technical as well as fi nancial coopera on, the Government of Germany and the Government of India expressed their inten on to support the evacua on of renewable energy by strengthening the power transmission infrastructure in India. The integra on of these power plants in the transmission network is a cri cal prerequisite for ensuring an environmentally more sustainable energy supply in India. The integra on requires transmission infrastructure for the evacua on of power as iden fi ed in the comprehensive transmission plan called “Green Energy Corridors” prepared by POWERGRID Corpora on of India (PGCIL) in 2012.

Time Period: 2013

EUR 1000 KfW

13 Energy Effi cient Housing (NHB) - Se ng Standards as in Germany

KfW ini ated in 2010 a collabora on between the Fraunhofer Ins tute for Building Physics and “The Energy and Resource Ins tute” (TERI) in New Delhi to adapt an exis ng German calcula on model for the energy assessment of buildings to the condi ons in India. This research partnership was launched in 2010 and features as a task force in the Indo-German Energy Forum, which is being sponsored by various German and Indian ministries. The methodological basics of the tool, which is now being used on the subcon nent as well, are already established in Europe and have contributed to standardizing the energy accoun ng of buildings within the EU.

The tool (www.i oolki ndia.com) calculates the energy need of a building as a whole and the poten al savings off ered by ac ve and passive energy effi ciency measures based on the building design. Na onal Housing Bank (NHB), channels the funds to commercial banks which provide loans for energy effi cient homes.

Time Period: 2010

EUR 50 KfW



Agency

14 Enhancing Capacity For Low Emissions Development Strategies (EC-LEDS)

To enhance the Government of India’s (GOI) planning and implementa on of GHG mi ga on programs to help the GOI meet its goal of reducing the carbon ‘intensity’ of the Indian economy by 25 percent over 2005 levels by 2020. Advance Indian and U.S. capacity to develop long-term plans and strategies for low carbon inclusive growth through the exchange of knowledge and technical exper se.

Time Period: Phase 1- January 2010 - January 2013

Phase 2- 7th May 2013- 30th September 2015

1.459 EUR (Phase 1)

1 USD (Phase 2)

USAID

15 PROGRAMME TO FUND RESEARCH COOPERATION IN INNOVATIVE CLIMATE TECHNOLOGY

The project aims to deepen German-Indian research coopera on and disseminate knowledge about solar thermal electricity genera on and concentrated photovoltaics (CPV). To this end, tes ng and measurement equipment, calcula on tools, a 64 kilowa CPV system and a thermal energy storage facility are being installed for research purposes together with NTPC Ltd., India’s largest power company. Employees of the NTPC Energy Technology Research Alliance (NETRA) are being trained in the new technologies and methods in coopera on with two German research ins tu ons. Overall the project will strengthen applied research and technology transfer ac vi es, and enhance the prac cal applica on of research fi ndings in specifi c measures.

Time Period: September 2013-December 2016


5 EUR KfW

16 CLIMATE PROTECTION AND DISTRIBUTED ENERGY SUPPLY - INDO-GERMAN ENERGY FORUM

The purpose of the project is to support bilateral energy-policy collabora on in the context of the Indo-German Energy Forum (DIEF) through specifi c coopera ve ac vi es. This support focuses on promo ng the exchange of ideas and informa on on these ac vi es and on technological coopera on, with the aim of shaping sustainable energy policy. The project ac vely promotes economic coopera on between German and Indian industrial enterprises so as to provide a s mulus for investment in energy effi ciency measures and renewable energy sources.

Time Period: December 2008- February 2011


1.256 EUR GIZ

17 EXCELLENCE ENHANCEMENT CENTRE – INDIA

The project is se ng up the Excellence Enhancement Centre (EEC), an independent sector pla orm. The Centre aims to create greater awareness of energy effi ciency in the Indian power sector by encouraging the exchange of ideas and experience, providing examples of best prac ce and facilita ng technology transfer. The long-term goal is to establish more effi cient power and hea ng plants and to introduce modern plant opera on and management methods in the Indian power sector.

Time Period : December 2009-December 2014


1.731 EUR GIZ

18 Indo-German Trigen Project

The project’s aim is to reduce greenhouse gas emissions through the deployment of effi cient trigenera on systems and to demonstrate the economic and technical viability of trigenera on technology to poten al users by means of a pilot plant. A website provides interested par es with informa on about the technology and suppliers. In addi on, the project evaluates further poten al site, informs suppliers about market opportuni es and is developing an ac on plan to help create an enabling environment for trigenera on.

Time Period: December 2008-November 2014


1.156 EUR GIZ

59


Agency

19 Marke ng Solar Energy in Urban Regions And Industrial Zones in India (Comsolar)

The project is suppor ng the development and demonstra on of innova ve business models for commercialising solar energy in both urban and industrial zones. To this end, it is developing a strategy for marke ng solar energy and suppor ng the implementa on of the Na onal Solar Mission, which aims to install solar power plants genera ng an output of 20,000 Megawa s by 2020. Ac vi es include feasibility studies, technology transfer, informa on campaigns and comprehensive capacity building for the project partners.

Time Period:December 2009- December 2013


4.9 EUR GIZ

20 SOLAR MAPPING AND MONITORING (SOLMAP)

The project is working to create an enabling environment for solar power plant planning and implementa on, and to op mise the profi ts from solar plants in India. To support this process, a country-wide solar measurement and monitoring programme is being established to provide reliable data on solar irradia on and monitor the effi ciency of solar plants currently in opera on.

Time Period: November 2010 – February 2014


1.6 EUR GIZ

2. Transport

Projects in this sector supported by technical assistance are as follows:


Agency

1 Sustainable Urban Transport Programme

The project, in partnership with the Ministry of Urban Development, Government of India, aims to strengthen capaci es of government agencies na onal/state urban transport departments, municipal corpora ons and transport experts engaged in urban transport planning and regula ons to reduce urban transport emissions causing environmental damage. The project will also demonstrate sustainable urban transport models in 10 ci es in the country.


4.05 USD UNDP-GEF


3. Industry:

The following is a description of the projects in the Industry Sector supported through technical assistance:


Agency

1 Enhancing Readiness of the Railway Sector Investment Program as a Clean Development Mechanism Project

The capacity development technical assistance (CDTA) is proposed to prepare documents and studies that will enable Indian Railway projects to apply to the United Na ons Framework on Climate Change Conven on (UNFCCC) as a Clean Development Mechanism (CDM) project. RSIP will increase the capacity of the exis ng rail network to handle traffi c demand necessary to sustain the country’s economic growth by (i) an increase in and having more effi cient u liza on of the physical rail infrastructure through electrifi ca on, doubling rail tracks on cri cal routes, (ii) increasing the effi ciency of the exis ng infrastructure usage through the introduc on of modern signaling systems, and (iii) improving opera onal and fi nancial effi ciency through ins tu onal reform, especially on accoun ng reform. This will (i) reduce fuel consump on and enhance energy effi ciency; (ii) improve the environment and reduce pollu on; (iii) enhance railway safety, enabling railway users to benefi t from lower transport costs; (iv) increase line the capacity, benefi ng consumers, and producers of goods and services through the provision of mely and effi cient transport services and lower logis cs costs; and (v) improve staff produc vity

Time Period: 21st March 2012 (Approval date)

0.4 USD ADB

2 Energy Effi ciency Improvements in Indian Brick Industry

This program aims to reduce energy consump on & promo on of energy effi cient measures to reduce GHG emissions in Indian brick industry through

Enhanced public sector awareness on resource effi cient products 2. Facilitated project fi nance access to brick kiln entrepreneurs 3. Developed knowledge on technology and marke ng 4. Availability of effi cient technology models in 5 clusters 5. Enhanced capacity of brick kiln enterprises

Time Period: 1st April 2009- 31st December 2013

0.11702 USD U N D P -GEF

3 Improving Energy Effi ciency in Indian Railways System

The project supports eff orts to improve energy effi ciency in the Indian Railways, which accounts for roughly 2.5 percent of the total electricity consump on in India. The focus is on ins tu onal capacity development, technical training, implementa on of energy-effi cient technologies and sharing knowledge on best prac ces.

Time Period: September 2011-October 2014

5.2 USD U N D P -GEF

4 Sustainable Industrializa on: Building Stakeholder Capaci es and Involvement

The project, in partnership with the Ministry of Environment and Forests, Government of India, aims to infl uence industries to voluntarily improve their environmental performance, strengthen regulatory systems and increase community engagement in local industrializa on processes. The project has enabled an understanding of GHG emission profi les of key emi ng sectors and engines of industrializa on. Training of Regulators, increased awareness among civil society groups on environmental clearance processes, impacts of mining and thermal power plants


0.75 USD UNDP

5 Par al Risk Sharing Facility for Energy Effi ciency

The development of performance contrac ng industry in energy effi ciency in India, through par al risk sharing with commercial lenders. This project will work with several types of en es to enhance the capaci es of banks, developers and project promoters. The main aim of the project is to improve the access of fi nance for promoters of small to medium sized low carbon projects.


18 USD GEF-IBRD

61


Agency

6 Promo ng Energy Effi ciency and Renewable Energy in Selected Micro SME Clusters in India - under the Programma c Framework for Energy Effi ciency

The aim of the project is to develop and promote a market environment for introducing energy effi ciencies and enhanced use of RE technologies in process applica ons in 12 selected energy-intensive MSME clusters in India with expansion to more clusters later, in order to improve the produc vity and compe veness of units as well as to reduce overall carbon emissions and improve the local environment. The project will work at cluster levels as well as policy level to achieve its aim.

Time Period: 27th January 2009 (Approval date)

7.273 USD G E F -UNIDO

7 Cleantech Programme for SMEs in India

The project aims at promo ng clean energy technology innova ons and entrepreneurship in selected SMEs in India through cleantech innova on pla orm and entrepreneurship accelera on programme.

Time Period: 24th January 2013

1 USD G E F -UNIDO

8 Resources, Greenhouse Gas Emissions, Technology and Work in Produc on and Distribu on Systems: Rice in India

Uni ng life-cycle analysis (from environmental science) with value chain/produc on system analysis (from management science and economics) and decent work criteria (from labour studies), it explores how capital, technology and labour are combined to produce commodi es and GHGs. Mul -criteria analysis will then explore the costs and incommensurable trade-off s of technology lowering GHGs and improving livelihoods. CO2 (and possibly water) are chosen as indicators of materiality.

Time Period: 1st October 2011 (Approval Date)

£1.5 DFID

9 Scaling up Energy Effi cient Technologies in micro, small and medium enterprises (MSMEs)

The project aims at enhancing energy effi ciency in the Micro, Small and Medium Enterprise (MSME) sector by providing direc ons and support to na onal and state level ini a ves for the uptake of energy effi cient technologies.

Time Period: Previous Phases- November 1993- December 2012

Current Phase- Planning

CHF 15.5 ( P r e v i o u s phase)

CHF 1.5 ( C u r r e n t Phase)

SDC

10 INDIA - Financing Energy Effi ciency at SMEs

The objec ve of the Financing Energy Effi ciency at Micro Small and Medium Enterprises (MSMEs) Project for India is to increase demand for energy effi ciency investments in target micro, small and medium enterprise clusters and to build their capacity to access commercial fi nance. This includes ac vi es to build capacity and awareness for energy effi ciency (EE), ac vi es to increase investment in EE and knowledge management on the provision of resources and manpower for broad Global Environmental Facility (GEF) program evalua on and analysis of cross cu ng energy effi ciency issues with the goal of ensuring eff ec ve implementa on and replica on of not just this individual project, but of the Bureau of Energy Effi ciency (BEE)’s en re GEF funded programma c eff ort.

Time Period: 27th May 2010- 31st December 2014

11.3 USD W o r l d Bank


4. Cross Cutting Areas:

The following is a description of projects in this category supported by technical assistance


Agency

1 Low carbon Campaign for XIX Commonwealth Games 2010 Delhi, India

The project, in partnership with the Commonweath Games Organizing Commi ee, aimed to use XIX Commonwealth Games as an opportunity to raise awareness on low-carbon prac ces among athletes, visitors, media and other par cipants.

Time Period- 2010-2011

0.95 USD UNDP-GEF

2. Development and Management of NAMAs in India

The project aims at suppor ng the Indian Ministry of Environment & Forests (MoEF) with the coordina on and implementa on of the response to climate change in the context of two na onally appropriate mi ga on ac ons (NAMAs) and the respec ve measuring, repor ng and verifi ca on (MRV), intending wide scale impacts and interna onal co-fi nancing.

Time Period: September 2013 - August 2017


3 EUR GIZ

63

ANNEX VIINote on the Green Climate Fund

The Green Climate Fund (GCF) is a multilateral fi nancial fund, formed as an operating entity of the fi nancial mecha-

nism of the UNFCCC. The GCF will support projects, programmes, policies and other activities in developing countries.

The fund was established in 2010 at the 16th session of the Conference of Parties (COP), held in Cancun, Mexico. It

was formally launched in 2010 at the 17th session of COP held at Durban, South Africa.

GCF is governed and supervised by a 24 member Board (with equal representation both from developed countries and

developing countries) that has the full responsibility for funding decisions and that receives the guidance of the COP.

The Fund has also established a Secretariat in Songdo, South Korea and the World Bank has been appointed as the

interim trustee (for a period of three years) for managing the fi nancial assets of the Fund.

At 19th Conference of Parties to the UNFCCC, held in Warsaw in November 2013, Parties agreed to the arrangements

between the COP and the GCF to ensure that the GCF is accountable to and functions under the guidance of the COP

to support projects, programmes, policies and other activities in developing country Parties using thematic funding

windows, which were approved by the GCF Board at its fi fth meeting.

The GCF Board meets every three months to deliberate upon the various aspects of operationalizing the fund. The fi rst

few meetings discussed matters related to the organization of the secretariat, design of the business model framework,

and mobilizing resources for the fund.

The last Board meeting was held in February, 2014, at Bali, Indonesia, to negotiate on the business model framework

of the fund and make it fully operational by the end of the year. Indonesia pledged USD 250,000 to the GCF this year,

the second developing country to contribute to the GCF after South Korea, which contributed US $40 million last year

to establish the working of the fund. Many developed countries have also made contributions, including Germany,

Denmark, Norway, Australia, Finland and the Netherlands, but the contribution by Indonesia has been considered

signifi cant as the developing countries have no formal obligations to contribute to the fund.

Also the parameters and guidelines for the allocation of resources during the initial phase of GCF, that includes bal-

ancing the mitigation and adaption activities together and allocation of 50% of the fund’s resources to vulnerable and

LDCs, SDCs, with maximum private sector involvement by October 2014 were discussed.

The next meeting of the GCF will be held from the 18th to the 21st of May, 2014 at Songdo, South Korea. The agenda

of the meeting is to fi nalize the remaining elements for operationalizing the fund, along with the following41:-

• Guiding framework and procedures for accrediting national, regional and international implementing entities and

intermediaries

• Initial proposal approval process, including the criteria for programme and project funding

• Initial results management framework of the Fund

• Fund’s fi nancial risk management and investment frameworks

• Structure of the Fund, including the structure of its Private Sector Facility

• Initial modalities for the operation of the Fund’s mitigation and adaptation windows and

• its Private Sector Facility

41 Green Climate Fund, http://gcfund.net/fi leadmin/00_customer/documents/MOB201406-7th/GCF_B07_01_Provisional_agenda_140430_MJ.pdf


The following table gives a brief overview of the board meetings held so far:

Mee ng Dura on, Loca on Outcome

1st Board Mee ng

23-25 August, 2012, Geneva, Switzerland

• Discussion on ma ers related to organiza on and opera onaliza on of the fund• Selec on of the Interim secretariat and Interim trustee for the GCF board

2nd Board Mee ng

18-20th October,2012, Songdo, Republic of Korea

• Selec on of South Korea as the host country for the GCF• Ini a ng the Work on developing a ‘Business Model Framework’ for the GCF

by establishment of a team of six board members ( namely France, Norway ,UK,Barbados, Columbia& DR Congo)

3rd Board Mee ng

13-15th March, 2013, Berlin Germany

• Decisions on ‘Business Framework Model ‘ taken• Discussions on resource mobiliza on of the fund• Establishment of the Independent secretariat for the fund

4th Board Mee ng

26-28th June , 2013, Songdo, Republic of Korea

• Inclusion of the Private Sector Facility into the Business Model Framework of the GCF

• Appointment of Ms. Hela Cheikhroubou as the GCF secretariat’s Execu ve Director

• Discussion on logo for the fund

5th Board Mee ng

18-20th October, 2013. Paris, France

• Transi on from Design phase of the fund to the opera onal phase• Development of the roadmap for raising fi nances for the GCF

6th Board Mee ng

19-21st February, 2014,Bali, Indonesia

• Discussion on alloca on of funds, guidelines and parameters for fund alloca on and opera onaliza on

• Discussion on policies, ‘Essen al Eight’ for fund resource mobiliza on


About Vasudha Foundation

Vasudha Foundation was established in 2010 as a non-profi t organization with a belief of

conserving Vasudha (which in Sanskrit means the Earth), the giver of wealth and sustains all

life forms, and with the objective of promoting sustainable consumption of its resources. With

this in mind the organization engages in policy advocacy and research activities.

climate finance handbook - vasudha · 2014. 8. 13. · introduction – why this hand book? 1 2....

Documents