IDCOL RE Programs:

Successful Models For Transforming Rural Energy Access

Islam Sharif
Chief Executive Officer

Infrastructure Development Company Limited(IDCOL), Bangladesh

Asia Clean Energy Forum

Game Changers: Institutional Models for Transforming Rural Energy Access Markets

22-24 June, 2011

 AN OVERVIEW OF IDCOL

 IDCOL is a Government-owned financial institution mandated to promote private

sector financing in infrastructure and renewable energy sector.

 It provides long-term financing to private sector infrastructure projects and RE

Projects.

Objectives:
 Promoting renewable energy technologies businesses on commercial basis.
 Encouraging micro-finance and income generation activities and raising standard of
living of rural people through RE.

Board of Directors : Management:

 Public Sector – 3 Directors  Economists
 Private Sector – 3 Directors  Lawyers
 Executive Director and CEO  Financial analysts
 Chartered accountant
 Engineers
 Environmentalist
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 IDCOL’S INVESTMENT PORTFOLIO

Total investment portfolio: USD 440 million

RE investment portfolio: USD 174 million

Telecommunicat
ion and ICT
14%

Renewable Other Solar

Energy 1.20% Applications
40%
0.28% Biomass

1.27% Biogas

Power 97.25 Solar Home Systems

45% %

Others (ports,
ETP)
1%
 BACKGROUND
Limited Govt capability to connect whole country to the grid
Solar Home System (SHS) a feasible solution : adequate radiation
IDA and GEF facilitated the establishment of SHS program in Bangladesh
Rural Electrification Board (REB) and IDCOL was selected as the coordinating agencies
for the execution of the program.

WHY IDCOL ?
The public-private partnership model of the institution;
Capable workforce with the capacity to assess technical and financial feasibility and
due diligence of projects;
Expertise in Project Finance;
Experience of dealing with multilateral agencies and working as fund manager;
Conviction and public perception as a transparent institution.
 IDCOL SOLAR PROGRAM – AT A GLANCE

The initial target (50,000 SHSs) was achieved 3 1,000,000

years ahead of completion date and US$ 2 900,000
million below the estimated cost funded by
800,000
World Bank & GEF
700,000

Subsequently, GTZ, KfW, ADB and IDB extended 600,000

No. of SHS
support. 500,000

400,000
IDCOL revised its target to 2.5 million SHS by 300,000
2014.
200,000
Solar Home System Installation
100,000
Status
0
325,067

1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
350000
300000 169,916
250000 115,101
69,562
200000 37,151 Installation up to May 2011: 974,620
150000 27,579 (48.73 MW).
100000 20,635
14,973
50000 772 It is the fastest growing off-grid program in
0 the world (70% YoY).
2002

2007

2008
2004

2005

2006

2010
2009
2003

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 COMMITTEES AND THEIR RESPONSIBILITIES

Technical Provides approval

Standard Suppliers
Committee Seeks approval

Supplies Pays for

equipment equipment

Provides Grant A, B & refinancing

IDCOL MFIs
Seeks Grant & refinancing

Sell systems & Makes down payment and

channels Grants monthly installments

Operations Households
Committee
 SYSTEM SAMPLES

Capacity Total Load Operating Hour Cost (in USD)

20Wp Lamp: 2 (5W each) 4-5 hours 170

Mobile Charger: 1

50Wp Lamp: 4 (7W each) 4-5 hours 380

Black & White TV: 1
Mobile Charger: 1

85Wp Lamp: 9 (7W each) 4-5 hours 580

Black & White TV: 1
Mobile Charger: 1

130Wp Lamp: 11 (7W each ) 4-5 hours 940

Black & White TV: 1
Mobile Charger: 1

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 FINANCING OF A SOLAR HOME SYSTEM

Financing Method ( Sample of a 50 Wp System)

Cash Sale
Only Grant A (buy-down grant) is provided to the PO
Credit Sale
SHS cost USD 380 Financing terms of loans from PO to
household
System buy-down Grant A: USD 25 USD 25

Loan (Tk) USD 301.75

Remaining Cost USD 355
Loan duration 3 years
Household Down payment (15%) USD 53.25
Total Interest USD 108.63
Credit to customer (Tk) USD 301.75 charge (12% p.a.
flat)
IDCOL refinance (80%) USD 241.40 Total household USD 410.38
payment
PO Contribution (20% of loan amount) USD 60.35
Monthly USD 11.40
Institutional Development Grant B : USD 3 USD 3 household
installment

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 DEVELOPMENT IMPACT

Financed 974,620 Solar Home Systems:

Beneficiaries:

4.87 million, 3% of population.

Savings:

78,866 tons of kerosene worth USD 60 million per year .

Job creation:

15,000 direct and 30,000 indirect.

CO2 reduction:

223,609 tons of CO2 per year .

 IDCOL is exploring similar model for solar irrigation pumps.

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Thank You