Energy Governance Case Study #10

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Contents Executive Summary 2 Introduction 4 Research Methods 7 The ESD Project Revisited 9 Key Innovations and Lessons Learned 12 Main Benefits 19 Remaining Challenges 22 Conclusions 24 Appendix A: List of Institutions Interviewed 26 Appendix B: Interview Questions for Site Visits 27 References 28 Acknowledgements 29 About the Authors 30


An aerial view of the 3MW pilot wind farm at Hambantota, Sri Lanka


2 The Energy Services Delivery (ESD) project was intended to bridge the widening gap resulting from a serious dearth of investment in Sri Lanka’s electricity and energy sector. Although initially conceptualized as a small-scale pilot project, its achievements and potential scalability were so convincing that the World Bank has since declared it “a model” for energy development programs around the world. In a span of six years, the ESD project successfully installed 21,000 solar home systems (like the one shown in Figure 1) and 350 kilowatts of installed village hydro capacity in rural Sri Lanka, in addition to 31 megawatts (MW) of grid-connected mini-hydro capacity (like the plant shown in Figure 2) and a 3MW pilot wind farm. The ESD achieved all of this while exceeding appraisal targets and expending resources below expected budgetary costs. Nine years after its conclusion, the ESD project continues to yield benefits for its stakeholders. Apart from being able to enjoy basic electricity services, rural end-users also benefit from improved health from no longer using kerosene and improved finances from not having to pay monthly electricity bills. Villagers have been trained in the proper maintenance of their systems and were able to engage in productive activities such as the formation of local cottage industries and studying. More impressively, the renewable energy sector continues to thrive in Sri Lanka with hundreds of organisations and thousands of people directly involved in making or selling renewable energy equipment. This report identifies several key innovations and lessons that have contributed toward the ESD’s success, namely, a well designed financial model and credit facility, a committed and competent implementing agency supported by a strong mandate from the government, and an emphasis on stakeholder participation and capacity building. Nevertheless, the report also outlines looming challenges as the country emerges from a 26-year old civil war and gears up to accelerate its economic development. The report ends with a reflection of what may lie ahead for renewable energy development in Sri Lanka.


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Figure 1: A Solar Home System in the remote village of Ponniwala in the Northwestern Province of Sri Lanka

Figure 2: The 2.7MW grid-connected mini-hydroelectric plant in Watawala, Central Province, Sri Lanka


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In 1996, approximately 70 percent of households outside of Colombo and the Western Province in Sri Lanka had yet to be connected to the national grid.1 Experts estimated that as many as 300,000 rural households were using power from rechargeable car batteries for basic electricity needs such as lighting, operating water pumps, watching television, and charging mobile phones. With demand growing at eight percent annually,2 electrification was becoming a controversial political issue. Although the government had been increasing investments in new electricity generation capacity by about 4.5 percent of the Gross Domestic Product (GDP) per year since the 1990s,3 it was clear that these efforts were not sufficient. In the capital city alone, extended power cuts were a daily occurrence, often as long as eight hours at a time, and many rural villagers like the one shown in Figure 3 continued to spend hours each day cutting and chopping wood for household energy use. Thus, it seemed that the prospects for the electricity network to be extended to the rest of the population were quite bleak.

The Energy Services Delivery (ESD) project, funded through a World Bank credit line of US$22.3 million and a Global Environment Facility (GEF) grant of US$5.7 million,4 was conceived as a viable solution to bridge the widening gap resulting from underinvestment in Sri Lanka’s power sector. The project ran from 1997 to 2002, and it harnessed the potential of the country’s dynamic private sector to complement government efforts to address urgent rural electrification issues. It also stimulated investments in power generation and improved end-user efficiency. In a span of six years, the project successfully installed 21,000 solar home systems (SHS) like the one shown in Figure 4 and 350 kilowatts (kW) of installed village hydro capacity such as the one shown in Figure 5; 31 megawatts (MW) of grid-connected minihydro capacity; and a 3MW pilot wind farm shown in Figure 65 — all ahead of schedule and below expected cost. Although it was initially conceptualized as an experiment, the achievements and potential scalability of the ESD project were so convincing that the World Bank declared it as “a model for other rural electrification initiatives with renewable energy and energy efficiency components”.7 A cursory glance of Sri Lanka’s thriving renewable energy market that has developed since certainly seems to validate this conclusion. The World Bank continues to apply

Figure 3: A villager in the Southern Province of Sri Lanka collects wood for his cookstove


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Figure 4: A solar panel connected to a SHS in the Western Province of Sri Lanka


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Figure 5: A 12kW off-grid microhydro system in Meddawatte, Sri Lanka

Figure 6: Pilot 3MW wind farm in Hambantota, Sri Lanka


its market-based approach in similar projects in other developing countries including the ESD’s successor Renewable Energy for Rural Economic Development (RERED) project which will conclude in 2011. Considering the complexity of its breadth and scope and the ambitiousness of its targets, the accomplishments of the ESD project are indeed remarkable. Previous literature has provided some analysis of the various factors that have contributed toward its success. Almost a decade onwards, however, an important question arises as to whether these lessons remain relevant for policymakers and renewable energy practitioners in Sri Lanka and elsewhere in the developing world; and furthermore, whether the project should remain a template for future renewable energy projects. In an attempt to provide a fresh perspective, this report revisits the various different components of the project, namely those related to financial credit, the gridconnected pilot wind farm, and capacity-building. The report establishes whether the innovations that resulted nine years back have continued to contribute positively toward renewable energy development in Sri Lanka. Subsequently, the report identifies looming challenges and concludes with lessons learned for both Sri Lanka’s energy future and energy development more generally.

The information and qualitative analysis presented in this report mainly arises from a series of in-depth, semistructured interviews undertaken with 56 stakeholders involved with the ESD project from 28 institutions in Sri Lanka in February 2011 (the full list of institutions visited is summarized in Appendix A). Sometimes referred to as “intensive interviewing” or “responsive interviewing”, the exercise involves asking respondents a set of standard questions but then allowing for the conversation to build and deviate to explore new directions and areas.7 Though this method has some challenges, we chose it as our primary method of data collection because we anticipated that many of the variables of interest to us, such as, ongoing energy and development challenges in Sri Lanka and perceived benefits of the ESD project and its key lessons, are complex in nature and therefore difficult to measure and describe with quantitative methods without amounting to “conceptual stretching”.8 Moreover, face-to-face interactions rather than filling up survey questionnaires seemed to be the preferred mode

of conveying information in Sri Lanka, both for elite or expert respondents as well as less-educated or illiterate rural community leaders and end-users. In particular, the visual element of the interviews enabled us to look for non-verbal cues to decide whether the respondents understood the question or to encourage them to further expand on points of interest. We therefore used our interview findings to corroborate existing literature related to renewable energy development in Sri Lanka. This provided for a richer and more meaningful analysis of the issues at hand. We relied on a purposive sampling strategy to select respondents that could represent the various aspects of the case study and a critical stakeholder analysis framework to ensure that a broad spectrum of key stakeholders from government, international donor organizations, civil society, the private sector, academia and think tanks, and local communities were represented. Where and when necessary, simultaneous, real time translation into local languages and dialects were employed. We made sure to specifically include respondents from: • Government agencies including the Provincial Council of Sabaragmuwa, Ceylon Electricity Board, Sri Lanka Sustainable Energy Authority, Ministry of Finance and Planning, and the Ministry of Power and Energy; • The international donor community including the United States Agency for International Development and the United Nations Development Programme; • Civil society organisations including Sarvodaya Economic Enterprise Development Services (SEEDS), Practical Action, Sri Lanka Business Development Centre, Grid Connected Small Power Developers Association, Federation of Electricity Consumer Societies, and the Solar Industries Association; • Private sector companies including Consultancy and Professional Services (Pvt) Ltd., Hashakee Power (Pvt.) Ltd., Alpha Solar Systems, Resource Management Associates (Pvt) Ltd., Vallibel Energy, Mark Marine Services, Eco Power Group of Companies, and Nielsen; • Financial Institutions, including DFCC Bank, Lanka ORIX Leasing Company PLC, and Hatton National Bank; and • Local universities, research institutions and think tanks including the Institute for Participatory Interaction in Development.

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Figure 7: Dr. Sovacool outside of the Sri Lankan Ministry of Power and Energy in Colombo, Sri Lanka

Figure 8: Researcher Ira Martina Drupady at the headquarters of SEEDS, Sri Lanka’s oldest microfinance institution


Figures 7 and 8 show the research team at some of these institutions. In all interviews, respondents were asked to (a) Identify the most serious energy-related concerns facing Sri Lanka to also substantiate the significance of the ESD project; (b) Summarize what they saw as the most remarkable features of the project; and, (c) Explicate expected costs and benefits for those efforts. Due to Institutional Review Board guidelines at the National University of Singapore (NUS), as well as the request of some participants, we present such data in our article as anonymous, though information from the interviews was often recorded and always carefully coded. We also undertook site visits where we spoke with more than fifty community members, employees and/or endusers of a village hydro system in Meddawatte Village (Sabaragmuwa Province); solar home system villages in Indigolla, Dagama and Ponniwala (Northwestern Province); on-grid hydropower plants in Watawala (Central Province, see Figure 9); a grid-connected solar power plant in Colombo (see Figure 10); and the Hambantota pilot wind farm (Southern Province, see Figure 11). Appendix B shows some of the questions we asked during the village visits.

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The ESD project, run from 1997 to 2002, is the first part of the World Bank’s Sri Lanka Renewable Energy Program, funded by a credit facility of US$22.3 from the International Development Association (IDA) and a grant of US$5.7 million from the GEF. The project was conceived at a time when the Sri Lankan government was facing mounting political pressure to address serious underinvestments in electricity provision. Although the government had been consistently spending 4.5 percent of the GDP per year since the 1990s to expand power generation, approximately 48 percent of the population was still without access to the power grid.9 With energy demand growing at eight percent a year10 and increasingly crippling petroleum imports, CEB, the national utility, was not even in a position to even generate enough power for Colombo’s electricity needs. At the time, the cost of extending distribution networks averaged US$650 per customer.11 The government’s 1991 Rural Electrification Master Plan estimated that it would only be economically feasible to connect up to 60 percent of villages and 42 percent of rural house-

Figure 9: The research team tours the 2.7MW Watawala mini-hydro plant


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Figure 10: Dr. Sovacool atop one of the wind turbines at the pilot wind farm in Hambantota

Figure 11: The research team touring a grid-connected, roof-mounted solar array at the LOLC offices in Colombo


holds, taking between eight to ten years to reach these targets.12 The government’s energy strategy as outlined in the 1994 National Environmental Action Plan (NEAP) was therefore to explore a wider range of energy technologies, for on- and off-grid solutions, including renewable energy and demand side management (DSM). The attractiveness of the approach proposed by the ESD project lay in the prospect of creating self-sustaining market-based off-grid solutions for rural electrification that makes use of indigenous renewable energy sources and environmentally sustainable technologies. The project also promised to encourage further private sector investments in power generation by supporting the development of grid-connected mini-hydropower plants and a 3MW grid-connected pilot wind farm. Strengthening the CEB’s capacity to promote energy efficiency through DSM initiatives targeted at the private sector would also significantly reduce the long-term demand for electricity. The ESD project would also provide technical assistance to the government to facilitate the further integration of renewables and DSM in energy policy. Lastly, the project had a global environmental objective to mitigate carbon emissions in Sri Lanka. The funding for the project was divided into three principal components, namely: a. The ESD Credit Component (estimated at US$48.9 million equivalent) that provided medium- to longterm financing for the diffusion of renewable energy technologies in Sri Lanka through local companies, non-government organizations (NGOs) and associations or cooperatives; b. The 3MW Pilot Wind Farm Component (estimated at US$3.8 million equivalent) that was intended to demonstrate the technical and commercial viability of wind power in Sri Lanka in order to encourage future investments by the private sector; c. The Capacity-Building Component (estimated at US$2.6 million equivalent) that was a fund to provide training and technical support for renewable energy and energy efficiency initiatives, in particular, for the CEB and energy service entrepreneurs. During the 6-year period of the project, all targets were met and in most cases, exceeded, ahead of schedule. Approximately 21,000 SHS and 350kW of village hydro capacity were successfully installed in areas in rural Sri Lanka that would have otherwise not had access to electricity, 31MW of grid-connected mini-hydro capacity was generated, and a 3MW pilot wind farm was built by CEB (please refer to Table 1). In addition, the project allowed CEB to undertake DSM initiatives such as develop a code

of practice for energy-efficient commercial buildings and an appliance energy labeling program, administer energy audits, provide advice of energy efficiency measures, and conduct a load research study.

Project component

Target at appraisal

Accomplished target

Mini Hydro (gridconnected)

21MW

31MW

Pilot Wind Farm

3MW

3MW

15,000 units13

21,000 units

250kW

300kW

Solar Home Systems Village Hydro Systems (offgrid)

Table 1: ESD Project Achievements (as of December 2002)

With projects costs amounting to only US$44.8 million equivalent, the ESD project also ended up saving more than US$10 million than originally estimated (please refer to Table 2). Although the bulk of the funding came through IDA and GEF’s credit line and grant facility respectively, participating credit institutions (PCIs), the private sector and end-users provided a significant amount of complementary funding, further demonstrating the commercial viability of the approach.

Source

Appraisal estimate (US$ million)

Actual expenditure (US$ million)

International Development Association (credit facility of the World Bank)

24.2

22.3

Global Environment Facility

5.9

5.7

Local Financial Institutions

13.7

4.8

Private Sector and End-users

9.6

10.7

Ceylon Electricity Board

1.9

1.3

55.3

44.8

Total

Table 2: ESD project costs and sources of financing

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Perhaps the clearest indication of the project’s success is that almost a decade after the its completion, the successor RERED project, which will conclude in 2011, continues to build upon the earlier achievements of the ESD project in terms of off- and on-grid electrification, the development of new renewable energy sources as well as energy efficiency and DSM. In addition, the government has also targeted to increase power generation from non-conventional renewable energy sources to ten percent by 2015.14 As a result, the renewable energy sector continues to be very much active, comprised of “more than 200 organisations with over 2,000 people commercially involved in grid-connected, off-grid community and household based renewable energy systems”.15

kerosene lighting and battery charging for radio and TV”.16 A respondent recalled, “At the time, there was a very strong push from the international SHS market to enter Sri Lanka.” The Bank estimated that as many as 300,000 rural households were using power from rechargeable car batteries for such basic electricity needs, indicating a large potential market with a strong willingness to pay. In addition, another World Bank-assisted study confirmed the economic and financial viability of rehabilitating at least 100 small grid-connected mini hydro schemes on tea plantations. Studies in wind power potential also demonstrated that Sri Lanka’s economically exploitable wind resources could support at least 200MW of capacity.17

The ESD project was one of the World Bank’s first large scale entries into renewable energy development. It came at a time when demand for energy was rapidly rising in the developing world and as the largest multilateral lender in the power sector, the World Bank, was coming under pressure from its donors to identify opportunities that could reduce the high costs and environmental consequences that came with conventional energy infrastructure projects. Despite being initially conceptualized as a pilot, the ESD project generated plenty of interest from stakeholders and it was their creative input that became indispensible to the project’s success. As one respondent noted, “ESD was certainly a transformational intervention for renewable energy in Sri Lanka.”

On the sidelines, one local NGO, the Intermediate Technology Development Group (ITDG), recently renamed Practical Action, took the opportunity to lobby for the inclusion of village hydro systems into the ESD project design. The ITDG had been pioneers in microhydro technology since 1979 and at the time, had already a strong program in Nepal. Moreover, they carried considerable grassroots credibility, being the initiators of the Energy Forum, a platform for dialogue and consultation between local practitioners in renewable energy technologies in Sri Lanka. Thus, although the World Bank was initially skeptical of the village hydro approach, they supported the ITDG to undertake a preliminary study that identified up to 150 to 180 potential sites for village hydro systems. This convinced the World Bank to allocate up to 20 percent of the funds initially set aside for SHS, to develop village hydro systems. “There was no capacity at that time, just opportunity,” a respondent commented.

The right window

Government commitment

One of the key building blocks for the ESD project’s success is that it came to Sri Lanka just at the right time. As mentioned, in 1996, as many as 70 percent of households outside Colombo and the Western Province had yet to be connected to the national grid. Public sector investments in power generation were seriously lagging behind with the CEB was struggling to even meet basic power demands in Colombo. “Income and demand was definitely there,” stated one respondent. “But the government was just not able to deliver.”

As with any successful development project, the government’s strong commitment was reflected in relevant policy frameworks to support the objectives of the project. However, perhaps the most significant contribution that they made toward the project is by taking a step back and letting the private sector carry out its implementation.

Concomitantly, the World Bank was keen to expand lending for renewable energy projects, especially for off-grid solutions. Studies they undertook found that “in the absence of a connection to the grid, households were willing to pay commercial prices for solar photovoltaic lighting systems… a cost-effective substitute for

Rather than managing the funds directly, the government appointed DFCC Bank to set up an administrative unit (AU) as a separate entity within the bank, to act as the implementing agency — a formula they continue to use in the RERED project. As part of a blue chip private development bank, the AU was well positioned to gain the trust of the other PCI that were initially all private banks. Being well versed in the prevailing regulations and procedures of Sri Lanka’s banking sector, it was able to develop the appropriate operating guidelines for


the administration of the loans and their disbursement through the PCI. It also took on a quality assurance role by monitoring suppliers’ compliance, services standards, and taking in consumer complaints, including tracking over 20,000 SHS. The AU also administered the GEF cofinance grant funds available to off-grid projects to further overcome the initial cost disadvantages of these technologies, raise awareness within off-grid communities, and facilitate other technical assistance-related activities. Figure 12 depicts the structure of the AU. To protect its independence, a “Chinese wall” was created to separate the AU from the lending operations arm within the DFCC Bank. However, The AU also ensured the presence of effective consultation channels both through formal and informal processes to broker partnerships among multiple stakeholders and to respond quickly to any concerns or difficulties that were voiced by the PCI. As a result, they could quickly make tweaks and adjustments to the project accordingly. “There were legal issues, regulatory issues, and stakeholder issues. The success of our approach was by tackling all these issues together in a comprehensive and flexible manner,” said one respondent. “It certainly helped that we were trusted to make the necessary adjustments to the guidelines without going through the World Bank or the government.”

Provision of credit The ESD project intended to facilitate a transition in the power generation sector in Sri Lanka that was currently still dominated by an inefficient public sector monopoly, to one were the private sector and renewable energy played an increasingly important role. Thus, the largest component and by far the centerpiece of the project was its credit component, initially estimated to cost approximately US$48.9 million equivalent (revised to US$47.6 million equivalent). This part of the project focused on promoting private sector participation in the diffusion of renewable energy technologies for the purposes of rural electrification as well as additional power generation. The project appraisal provided access to the capital needed to install 30,000 SHS (revised to 15,000 units during the project midterm review in 2000), 250kW through 20 village hydro systems, and 21MW of grid-connected mini-hydro systems. The credit facility that the World Bank’s IDA provided was channeled through the Central Bank of Sri Lanka (CBSL) at concessionary rates. The basic financial model was designed to take into account the fact that financial institutions and the private sector in Sri Lanka were not yet familiar with renewable energy projects and would thus be risk averse when faced with the high first costs

Figure 12: ESD credit line administration

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Technology

Interest rates

Maturity period

Guarantee/collateral

Grid-connected Mini Hydro

Equal to AWDR plus four percent

6–8 years (including grace period of 1–2 years

Project assets

Village Hydro Systems

Equal to AWDR plus 4–6 percent

6–8 years (grace period of 6–12 months)

Project assets

Solar Home Systems

Fixed at AWDR plus ten percent

2–4 years (with no grace period)

Project assets and two guarantors from the village

Table 3: ESD project lending terms

and transactions costs and the long maturation period for the loans. Roughly speaking, funds were disbursed through a select number of PCI consisting of private banks, leasing companies, and microfinance institutions that assume the credit risk of each loan at the average weighted deposit rate (AWDR),18 repayable in 15 years with a maximum 5-year grace period. They in turn offer subloans along with their own complementary financing to local companies, NGOs, associations, and households, with a maximum maturity of ten years with a 2-year grace period. PCI were allowed to refinance up to 80 percent of the loan amounts and use their own standard procedures to assess the credit-worthiness of their borrowers. “In the beginning, it was all a matter of trial and error,” admitted one respondent. “We started with zero knowledge.” However, as another respondent put it, “The arrangement gave stakeholders access to longterm financing that was not yet available in Sri Lanka’s commercial lending market.” Certainly, the financial model seems to have sent the right incentives to the market. By project closing in De-

cember 2002, all targets had been exceeded well below estimated costs. There were 15 grid-connected mini-hydro systems involving ten private developers, generating 31MW of installed capacity with more in the planning stages. Four major SHS vendors had successfully installed approximately 21,000 SHS across rural Sri Lanka at a rate of about 1,000 new installations per month. Lastly, 35 village hydro systems serving 1,732 households had also been installed, generating 350kW (please refer to Table 4). Moreover, the same financial models continue to be used in the RERED project and have yielded positive results as well. The key concept in designing the financing models for the ESD project was not prescribing the market, technologies or products to the end-user, but rather relying on a demand-driven approach. According to one respondent, “In the beginning, there were many problems and many adjustments had to be made by the AU.” As different financial requirements were identified for different stakeholders in different components of the project, financial models had to evolve organically.

Project cost

Appraisal target

Appraisal estimate (US$ million)

Target accomplished

Average unit capacity

Actual cost (US$ million)

Mini Hydros

21MW

30.8

31MW

1MW

26.7

Solar Home Systems

15,000

14.4

21,000

40Wp

9.2

Village Hydro Systems

250kW

0.7

300kW

12kW

0.8

Business development

n/a

0.5

n/a

n/a

1.0

Off-grid project support

n/a

1.2

n/a

n/a

0.7

Total

47.6

Table 4: ESD credit component targets and costs

38.4


SHS scheme The original design was for dealers or developers to provide consumer credit on top of handling marketing aspects and providing technical support. This means that the dealers purchase the systems or components directly from the manufacturers by accessing financing from PCI. The dealers also benefit from the low import duties for SHS components that was reduced from 30 percent to 10 percent to further assist with the high upfront costs. They then sell the systems directly to households providing a credit facility together with a subsidy of US$ 100 per system, which is a cofinancing grant from GEF to cover business development, marketing, or capacity building expenses. However, the SHS dealers soon realized that this microcredit arrangement was too specialized and beyond their expertise. For example, collections were very difficult and time consuming because most of the dealers had yet to develop a strong rural presence. “It was already quite of a challenge for us to set up technical service networks in these very remote areas but it is a different business altogether administering credit and collections,” said one respondent. “We do not have the skills for that.” Moreover, because of the perceived credit risks, the dealers were reluctant to extend credit to potential customers with little credit history as they had poor local knowledge and understanding of the communities they were serving in the beginning. For similar reasons, PCI themselves also had very little interest in extending credit directly to potential SHS users. “We do not have the rural networks needed for this kind of financing scheme,” admitted one respondent. “These individual loans were too small for us to service,” said another. Thus, in the first three years of the project, the sales for SHS were quite stagnated, with only about 1,000 units sold by early 2000. This changed with the entry of Sarvodaya Economic Enterprise Development Services (SEEDS) as a PCI. As Sri Lanka’s longest serving microfinance institution, SEEDS had years of experience on the ground and the grassroots networks needed to handle the credit and collection aspects of the project. This freed up SHS dealers to only focus on the technical aspects of installing the systems and provide post-sales services, which is their expertise. Moreover, SEEDS used the per system subsidy from the GEF to incorporate financial incentives for loan officers who earned significantly less than their SHS dealer staff counterparts. As a result, SHS sales experienced exponential growth that boosted the nascent solar industry, which by the end of the project comprised of four solar companies

Project

ESD

RERED

Year

Capacity (kW)

HH

98

2

50

99

26

683

00

109

2,574

01

616

13,316

02

985

20,953

03

1,868

39,530

04

2,904

62,834

05

3,910

83,773

06

4,624

101,551

07

5,170

115,195

08

5,549

124,800

09

5,649

127,560

10

5,722

129,606

11

5,760

130,721

RERED-AFi

Table 5: SHS installed from 1998 to 2011 (cumulative) and around 500 employed technicians and averaging in 1,000 units per month in sales. The achievements continued to expand during the RERED project. SEEDS alone, for example, financed more than 60,000 systems during the period of 2002 to 2006. Village hydro scheme In the beginning, PCI were very skeptical of extending credit for village hydro projects as they were unfamiliar with the concept. For until recently, it was illegal for those other than utilities to generate and sell electricity in Sri Lanka. However, an exception was made for Electrical Consumer Societies (ECS) that owned and operated village hydro schemes under the ESD project. Because of the community-centered approach of village hydros, it was not feasible to have individual borrowers responsi-

i. The World Bank and GEF extended additional financing (AF) for RERED between the period of 2008 to 2011.

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ble for the loan. In order for a village to qualify for a loan to build a village hydro system, they were required to set up an ECS consisting of villagers within the proposed service area (usually within a two kilometre radius). ECS are in turn entitled to generate, distribute and consume the electricity produced by members of the society through the village hydro systems. To convince PCI regarding the credit-worthiness and reliability of the project, the presence of a project developer was required as part of the project design. Project developers are registered consultants at the AU and serve as the technical experts for the projects. Typically, the project developers raise awareness in the villages regarding the possibility of building village hydro systems. Once villagers are mobilized, project developers are required to prepare a feasibility report with detailed engineering calculations in accordance with the required technical

specifications, assist the ECS in obtaining all required environmental and statutory clearances, negotiate the loan from a PCI, and provide technical assistance during project implementation. A verification of technical compliance is made at the design stage and again upon project completion by Chartered Engineers. The average cost of a village hydro system (such as the one shown in Figure 13) is about US$2,000 per kW.19 Villagers contribute up to 25 percent of costs consisting of shramadana (manual labour) and 10 percent cash. The GEF provides a capital subsidy in the forms of a cofinancing grant amounting to US$400 per kW and pays project developers staggered fees at predetermined milestones. Although it was an unconventional arrangement, village hydro schemes gained credibility. The communitycentered approach provided a strong social control for members within each ECS both in terms of electricity usage as well as in terms of payments. Out of 35 village hydro systems set up during the ESD project, only three were known to have defaulted and the approach continued to be a success during the RERED project. Moreover, most systems were still in operation at time of writing this paper despite some areas already having grid electricity, which indicates the high desirability of the systems. “Usually half the village chooses the grid and the other half sticks to the hydro system,� says one respondent. The success of the scheme also convinced local governments, such as the Uva and Sabaragmuwa provincial councils, to come in with complementary funding. Grid-connected mini-hydro scheme

Figure 13: The canal of a 12kW Village Hydro System in Meddewatte

At the beginning of the ESD project, conventional hydropower was the only indigenous renewable energy source that was developed, providing about half of the country’s commercial power needs.20 The mini hydro industry, however, was virtually non-existent with only a 1MW privately owned power plant operational in 1997.21 To stimulate the interest of the private sector, the ESD project introduced two important innovations. The first was a standardized Small Power Purchase Agreement (SPPA) that covered a period of 15 years on very lenient terms. The second was a Small Power Purchase Tariff (SPPT) mechanism which at the time was based on oil avoidance costs favoring mini-hydro technology. These financial tools allowed small developers (projects of up to 10MW in capacity) to overcome high transaction costs and their inherently weak bargaining power with CEB. As far as the PCI were concerned, risk mitigating measures in the form of syndication of large loans helped to avoid excessive credit exposure to a single borrower.


Project

ESD

RERED

Year

Capacity (kW)

HH

98

0

99

Year

Capacity (kW)

HH

0

98

0

0

22

140

99

0

0

00

75

365

00

0

0

01

128

573

01

0

0

02

350

1,732

02

31

17

03

661

2,548

03

35

19

04

810

3,817

04

69

31

05

1,011

4,587

05

83

38

06

1,171

5,129

06

104

50

07

1,432

5,869

07

111

52

08

1,577

6,425

08

130

62

09

1,737

6,803

09

154

67

RERED-AF

Project

ESD

RERED

RERED-AF 10

1,876

7,233

10

166

70

11

1,964

7,504

11

168

71

Table 6: Village Hydro Systems completed from 1998 to 2011 (cumulative)

Table 7: Grid-connected Mini-Hydro projects from 1998 to 2011 (cumulative)

As a result, as reported by several respondents, about ten private mini-hydro developers were able to install 15 mini-hydro power plants, generating 31MW, 10MW more than the appraisal target. Moreover, average installation costs of US$963.5 per kW were achieved against the appraisal estimates of US$1,030 per kW, contributing competitively to the goal of least cost power generation. Under the RERED project, the industry has continued to develop and at the time of writing this paper achieved 175MW installed capacity through 85 projects and is operating profitably at an average of 40 percent plant utilisation factor.

contribute an additional 172MW in capacity in the next few years.

“What the ESD project did was establish a framework for small power developers in Sri Lanka. The first in the world!” praised one respondent. “In 2009, mini-hydros supplied 5.5 percent of electricity to the grid. In 2010, it would have exceeded 6.5 percent. This is where the money is.” Going forward, another 82 mini-hydro plants are currently under construction and could possibly

Hambantota pilot wind farm Apart from the credit component, the ESD project set aside US$3.8 million equivalent to demonstrate the technical and commercially feasibility of developing wind power in Sri Lanka. In 1999, the CEB successfully commissioned a 3MW pilot wind farm at about US$1,175 per kW, comprising five 46-metre towers with 600kW turbines shown in Figure 14, designed to supply a total annual capacity of about 4.5 GWh.22 The wind farm is interconnected to the CEB grid and operates an average plant utilization factor of 14 percent (lower than the projected value of 17 percent). This is perhaps because the final location of the wind farm was located quite in-land and was therefore not an optimal area. Indeed, one respondent commented about that time period, “There were a lot of people interested in wind power theoretically, but in practice, nobody was willing to give up suitable land.”

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Later on, however, the operation of the pilot wind farm created significant interest among private developers looking to develop wind power projects and the government predicts that this will be the most likely energy source that will generate the most investments after hydropower. Moreover, in order to broaden Sri Lanka’s renewable energy portfolio, the Sri Lanka Sustainable Energy Authority (SLSEA) has introduced a new tariff structure which is technology specific for six genres of technology in order to encourage investments other than in hydropower.24

At the moment, the Kalpitiya Peninsula seems to have the most promising potential for wind power, attracting 30MW worth of investments in 2010. There are provisional approvals for 23 projects which will account for 230MW of capacity and at the moment, nine wind power projects with a total capacity of 60MW are under construction.25 Stakeholder engagement and capacity building Stakeholder engagement and continued capacity building opportunities under the ESD project were certainly key factors for the emergence of Sri Lanka’s vibrant renewable energy industry. Many respondents have also credited the government’s hands off approach as the main reason for this phenomenon. “By leaving the implementation of this project to the private sector, there has been very little corruption and instead, the many interactions among stakeholders have resulted in plenty of innovations and creative approaches,” stated one respondent. The Sri Lankan Business Development Center (SLBDC) was tasked with the bulk of awareness creation and capacity building activities, especially for off-grid electrification projects (estimated to cost US$2.6 million equivalent). It conducted village-level workshops, marketing campaigns (TV, radio and newspapers), and door-todoor promotional efforts in the early phases of market development until dealers and developers could gain a critical mass of potential customers. Figure 15, for example, shows one of the project’s promotional posters. The project relied on the fact that being able to generate their own electricity would be a compelling idea for the villagers, in light of the CEB’s failure to provide such a service.

Figure 14: A 600kW Turbine at the Hambantota Wind Farm

The ESD project also benefited from the involvement of local governments firstly as interlocutors to the communities that were being targeted and later on as additional funders in off-grid projects, especially for village hydro schemes. Mobilization of stakeholders led to the creation of various specialised associations such as the Solar Energy Industries Association, the Grid Connected Small Power Developers Association, and the Federation of Electricity Consumer Societies, which helped pool collective bargaining power when dealing with the World Bank, the government and PCI. In the end, however, it was the collective efforts and experiences of all stakeholders and the demand-driven approach that yielded the significant local expertise enabling them to overcome the various institutional, financial and market barriers, and minimized the needs of expatriate consultants. It also ushered a


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Figure 15: Poster promoting SHS in rural Sri Lanka

shift in mindset amongst stakeholders, “from a dole-out mentality to one that is based on least cost solutions with smart subsidies on a needs only basis.” Demand side management The ESD project contained one component that was targeted at the public sector, namely to build CEB’s capacity to undertake DSM initiatives. Achievements during the time of the project included developing a code of practice for energy-efficient commercial buildings and an appliance energy labeling program, undertaking energy audits and providing advice of energy efficiency measures, as well as conducting a load research study. According to several respondents, activities went reasonably well but CEB decided to close the division in 2003 because the SLSEA was coming into fruition. Although there does not seem to have been direct transfer of knowledge from the CEB, the SLSEA has taken over and further expanded on this endeavor to include

conducting energy management projects, developing energy consumption benchmarks, accrediting energy managers, energy auditors, energy services providers, and so forth.

Previous literature has already documented some of benefits that the ESD project has brought to Sri Lanka with rural end-users and the private sector being the main beneficiaries. This section summarizes the findings and also draws from some of the new primary data we collected through our interviews and site visits. End-users The ESD project came at a time when the government was struggling to meet increasing electricity demands, especially from Sri Lanka’s rural areas. “Electricity is very


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Figure 16: A village technician clears leaves from the intake canal of the 12kW microhydro system at Meddawatte

political in Sri Lanka,” stated one respondent. “People feel marginalised without it.” With up to 70 percent of households outside Colombo and the Western Province still out of reach of the most basic infrastructure, many local politicians took advantage of the situation to make electricity provision part of their election platforms. “There was definitely a lot of expectation put on the government and a lot of bitterness and disappointment,” said another respondent. “Villagers were very vocal in airing their grievances, especially if they were aware of neighbouring villages or towns that were already enjoying electricity.” The ESD project allowed villagers to take charge of their electricity needs in the absence of government provision. Approximately 21,000 SHS and dozens of 350kW village hydro systems were successfully installed in areas in rural Sri Lanka, serving close to 23,000 households that would have otherwise not had access to electricity. Apart from electrification, villagers also benefited from being trained in the proper maintenance of their systems. Figure 16, for example, shows one technician clearing a canal. The ESD project also improved finances of villagers as there were no monthly payments needed for the system

after the loans were paid off. Having electricity encouraged productive activities such as sewing and carpentry which was further expanded under the RERED project. Villagers also cited health improvements as one of the main benefits of the project as they no longer had to use kerosene. The availability of TV was also something that was specifically mentioned and indeed during our site visits, we observed that black and white TVs were available in all the households visited and in schools, like the one shown in Figure 17. However, it was the possibility of studying at night which seemed to be the most important benefit of electrification for the villagers. “Education is very important for Sri Lankans,” claimed a respondent “Even villagers want their children to be highly educated. They do not want their children to become farmers like themselves.” One respondent summarizes the experience, “[The scheme] cost of lot of money for them but it was money worth spent… Some of these villages have been using the systems for ten years. Without the ESD, they would have never gotten electricity.” Private sector Another direct benefit from the ESD was its enabling of small enterprises at the village level. Electrification motivated many homes to either start new private business-


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Figure 17: A girl watching educational programs on a television powered by microhydro electricity

Figure 18: A vendor in Sri Lanka’s Northwestern Province sells goods lit by solar electricity at night

es such as bakeries or shops, or convinced existing shop owners to extend their operating hours into the nighttime. Figure 18, for example, shows one vendor selling vegetables via solar powered light.

Certainly, the project was an opportunity for commercial banks to venture into development infrastructure. Capacity building for small private sector companies and NGOs resulted in many local innovations developed regarding quality standards, microfinancing schemes and marketing opportunities. It also brought in new players into the industry with additional working capital loans for expansion and training which has increased the competitiveness of conventional commercial loans.

The success of the ESD project also brought increased awareness regarding renewable energy technologies. By being involved in the project, “knowledge and knowhow came free of charge.” This has lead to the establishment of a broad set stakeholders that became active in Sri Lanka’s thriving renewable energy sector. The private sector, in particular, has been credited for this success with “more than 200 organisations [and] over 2,000 people commercially involved in grid-connected, off-grid community and household based renewable energy systems”. These include companies that design Sri Lankan based system components, such as the load controller depicted in Figure 19.

Most impressively, Sri Lanka’s experience and expertise, particularly in mini-hydro project development and financing have been sought after by other developing countries keen to develop their own, particularly African countries such as Rwanda and Uganda. According to one respondent, “The government was able to step back and the private sector just ran with it. The results have been superb.”


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Figure 19: A locally designed load controller for off-grid microhydro village electrification schemes

The analysis above demonstrates that key innovations resulting from the ESD project nine years ago continue to remain relevant and beneficial and are driving developments in Sri Lanka’s renewable energy sector today. It can also be said that the overall weak development in Sri Lanka’s power sector in the past did not directly affect the project as the renewable energy market had by and large been developed in communities without grid access. However, the energy landscape in Sri Lanka has now changed dramatically and it is questionable whether the favorable conditions created by the ESD project and furthered by the RERED project would still be able to address the country’s energy needs. The challenges listed below are the ones that were identified through the interview responses. Development of Sri Lanka’s power sector Having just emerged from a 26-year civil war, the country reelected President Mahinda Rajapaksa in the 2010 general elections, handing over a strong mandate to continue and expand on existing policies in order to rebuild the economy and accelerate the pace of development.

According to many of the respondents, the government’s main goal seems to be to quickly restore development particularly in the Northern and Eastern parts of the country that were ravaged by the war and kick start Sri Lanka’s industrial development, including investing in energy infrastructure. Figure 20, for instance, shows a mini-hydro station at the Carolina Estate abandoned during the civil war, its powerhouse and electrical machinery completely gone. Apart from the construction of new large-scale hydro plants and the rehabilitation of several old ones, the construction of two new major coal power plants are currently in progress in Puttalam, Northwestern Province (900MW), and in Trincomalee, Eastern Province (1,000MW). These plants have become such potent national symbols that Sri Lanka now lists them on their currency, shown in Figure 21. Moreover, with 88 percent of households electrified thus far and ambitious targets to achieve 100 percent electrification by 2012,26 energy access no longer seems to be an urgent priority and perhaps, neither is renewable energy development. Sri Lanka’s electrification policy Major developments in the power sector aside, as the government gears up for 100 percent electrification in Sri Lanka by 2012, one concern that has continued to


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Figure 20: An abandoned 2.5MW grid-connected mini-hydro system at the Carolina Tea Estate

surface among stakeholders is regarding the number of households that will not be served by the grid. Although CEB continues to remain vague on the matter, it is certainly conceivable that in some remote areas in Sri Lanka, grid extension would be impossible, despite the government’s pledge, due geographical and/or financial reasons. Several respondents are estimating that there are between 270,000 to 500,000 of households in such areas that would benefit from off-grid solutions as bridge technologies for the next ten years or so and that successor projects to ESD and RERED would remain important. In this context, provisions to finance larger systems and creating an emphasis on productive rather than consumptive uses of electricity may be necessary as residential demands in Sri Lanka become more sophisticated. Continued support for solar industries Solar companies and village hydro developers would be in the best position to complement the government’s electrification efforts, however, policy uncertainty is hurting their business as potential customers choose to hold off buying SHS or developing village hydro systems for the prospect of grid electricity. The SHS industry in particular is already suffering from market saturation. According to one respondent, “As

many as 70 percent of installed SHS panels have been removed, partially because of the entry of grid electricity but mostly because users were experiencing problems with their systems.” At the peak of their game, there were around 14 solar companies operating in the SHS market (nowadays, there are only four). However, due to an overexpansion of credit availability, sales had become driven by the suppliers’ targets rather than the villagers’ needs. The market grew too fast and demand subsequently collapsed, and with it, most of the solar companies. At the same time, because the project did not invest in properly building a local manufacturing capability, the unit costs for SHS remained high. With no sales revenue coming in, there were no sufficient incentives for SHS developers to maintain a rural presence, which led to the deterioration of post-sales services and the relationship between the dealers and the communities they served. As SHS customers were individual households, they did not have the bargaining power that ECS of the village hydro schemes had. In many cases, they felt that had no recourse for complaints and concerns regarding their systems. “The solar industry needs to be more flexible and change its business model,” claims one respondent. “They have been very rigid so far. But the market has changed and it is necessary to come up with new ways to make the busi-


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ness profitable again. It is not possible to have the same business model for 15 years.” Indeed, there have been some innovations that have come up in recent years, for example, the idea for PCI to shift from a dealer sales delivery to an energy service company delivery model, meaning that solar panels are leased out instead of sold. Another idea that has been put into practice is for solar panels bought back from loans no longer serviced to be reused to sell electricity to the grid using net-metring technology that is now available. Assistance for low-income households It is widely recognized that the benefits of rural electrification projects are largely captured by non-poor households. Microfinancing has certainly helped with the diffusion of SHS technology to more households in the past and some village hydro developers have expressed a desire to also have access to similar financing schemes to make village hydro systems more affordable. However, another factor that should be taken into consideration is the number of households that will not be able to afford any sort of market-based solutions for electrification, be it on- or off-grid. “It will be a rude shock when the coal power plants will actually make electricity prices higher,” said one respondent. Other respondents expressed concern regarding the Northern and Eastern parts of the country that have been the most affected by the civil war and suffer from a lack of basic infrastructure and deep pockets of poverty. One respondent says, “On paper, the ESD project did a lot of good. However, not enough is being done for poorer households. There should be schemes that cover them too.”

As a largely successful endeavor, the ESD project has continued to yield many important lessons for policy makers and practitioners of renewable energy, nine years after its conclusion. The project took advantage of the lack of public sector investments in Sri Lanka’s power generation sector to demonstrate the viability of renewable energy technologies as both off- and on-grid solutions and build private sector competence. The building blocks for its success, namely, being able to seize the right opportunity, a well designed financial model and credit facility, a committed and competent implementing agency, as well as stakeholder participation and capacity building, have resulted in many innovations that continue to reward

stakeholders and drive new developments in the renewable energy sector. Moreover, these factors are also part of the success stories of many similar renewable energy projects funded by the World Bank, including its successor RERED project, and initiatives in Bangladesh, the Philippines, and elsewhere. Thus far, Sri Lanka’s renewable energy industry benefited from a more-or-less “hands-off” approach from the government and due to its relatively small size, it was largely unaffected and rather gained from the inefficiencies of the power sector. However, nine years after the conclusion of the ESD project, as Sri Lanka emerges from a 26-year old civil war and accelerates economic development, the direction of the country’s energy and electrifications policies may be a cause for concern. Although initiatives like the ESD and RERED projects continue to support the development of renewable energy technologies, most investments seemed to be concentrated toward large-scale infrastructure projects. Moreover, as the country prepares for 100 percent electrification by 2012, innovative off-grid solutions have lost much of their original appeal. Already, the SHS industry is suffering from market saturation and if new business models are not developed, there is a danger that other technologies will also follow suit. The success of the ESD project shows that there is great potential for renewable energy technologies in Sri Lanka. The country’s nascent renewable energy industry was given a chance to flourish and, given a conducive enabling environment, it will continue to do so. Having started off being a pioneer in the field, it would certainly be a pity for Sri Lanka to erase all the gains that have been made in the name of faster economic development. Rather, Sri Lanka should continue to build upon the successes of its ESD and RERED projects to stimulate new innovations. With its abundance of natural resources and resilient private sector, the country could well continue as a trailblazer for renewable energy development for the rest of the developing world.


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Figure 21: A rendering of Norochcholai Coal Power Plant in the Northwest Province on Sri Lanka’s 100 Rupee note


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Alpha Solar System Alpha Thermal Ceylon Electricity Board Consultancy and Professional Services (Pvt) Ltd. DFCC Bank Eco Power Group of Companies Grid-connected Small Powers Developers Association Hashakee Power (Pvt.) Ltd Hatton National Bank Institute for Participatory Interaction in Development Lanka ORIX Leasing Company PLC Mark Marine Services Ministry of Finance and Planning Ministry of Power and Energy Nielsen Practical Action Provincial Government, Sabaragmuwa Resource Management Associates (Pvt) Ltd. RMA Consulting Sarvodaya Economic Enterprise Development Services Sri Lanka Business Development Centre Sri Lanka Sustainable Energy Authority United Nations Development Programme United States Agency for International Development Vallibel Energy Vidullanka Plc World Bank


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1. How many people live in your household? 2. What type of energy do you use: 2.1. for cooking? 2.2. for electricity? 3. What kind of household appliances (or other activities) to you use electricity for? 4. How do you pay for your electricity? 4.1 To whom do you pay? 4.2 How much do you pay? 4.3 What kind of financing scheme, if any, have you agreed to? 4.4 Do you consider the price affordable? 5. Are you satisfied with your source of electricity? 6. What type of electricity system do you have? 6.1 What brand is the system? 6.2 Whom did you buy it from? 6.3 What is the capacity of the system? 6.4 Did you purchase it new or second-hand? 7. How long have you had the system? Why did you purchase it? 8. Have you had any difficulty using it and/or operating the system? 9. Given the choice, would you prefer grid electricity or any other source of electricity?


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1. The World Bank. Sri Lanka Energy Services Delivery (ESD) Project. Report, Energy, The World Bank, Colombo: The World Bank, 1996. 2. The World Bank. Project Performance Assessment Report: Sri Lanka Energy Services Delivery Project. PPAR, Operations Evaluation, The World Bank, Colombo: The World Bank, 2004. 3. Ibid. 4. Ibid. 5. Ibid. 6. Ibid. 7. O’Sullivan, Elizabeth, Gary R. Rassel, and Maureen Berner. Research Methods for Public Administrators. New York: Longman, 2010. 8. George, Alexander L., and Andrew Bennett. Case Studies and Theory Development in the Social Sciences. Cambridge: Harvard University Press, 2004. 9. The World Bank. Project Performance Assessment Report: Sri Lanka Energy Services Delivery Project. PPAR, Operations Evaluation, The World Bank, Colombo: The World Bank, 2004. 10. Ibid. 11. Global Environment Facility. Sri Lanka: Enegry Services Delivery (ESD) Project. Proposal, Global Environment Facility, 1996. 12. Ministry of Power and Energy, Sri Lanka. Performance 2010 and Programmes 2011. Colombo: Ministry of Power and Energy, 2011. 13. The ESD project initially envisioned a target market of 30,000 households for SHS. However, due to some shortcomings in the financing approach in the beginning of the project, only 1,000 systems had been sold by the project’s mid-term review in February 2000. As such, the financing scheme was adjusted and the target was revised to 15,000 units. 14. Ministry of Power and Energy, Sri Lanka. Performance 2010 and Programmes 2011. Colombo: Ministry of Power and Energy, 2011. 15. Nagendran, Jayantha. Financing Small Scale Renewable Energy Development in Sri Lanka. Project Management, DFCC Bank, DFCC Bank, 2008.

16. Miller, Damian, and Chris Hope. “Learning to Lend for Off-grid Solar Power: Policy Lessons from World Bank Loans to India, Indonesia, and Sri Lanka.” Energy Policy (Elsevier Science Ltd) 28 (2000): 87-105. 17. Global Environment Facility. Sri Lanka: Enegry Services Delivery (ESD) Project. Proposal, Global Environment Facility, 1996. 18. Weighted average interest rates paid by all commercial banks on interest-bearing term deposits, as issued weekly by the CBSL. 19. Nagendran, Jayantha. Financing Small Scale Renewable Energy Development in Sri Lanka. Project Management, DFCC Bank, DFCC Bank, 2008. 20. The World Bank. Sri Lanka: Energy Services Delivery (ESD) Project. Proposal for Review, The World Bank, The World Bank, 1996. 21. Ibid. 22. The World Bank. Project Performance Assessment Report: Sri Lanka Energy Services Delivery Project. PPAR, Operations Evaluation, The World Bank, Colombo: The World Bank, 2004. 23. Ibid. 24. Ministry of Power and Energy, Sri Lanka. Performance 2010 and Programmes 2011. Colombo: Ministry of Power and Energy, 2011. 25. Ibid. 26. Ministry of Power and Energy, Sri Lanka. Performance 2010 and Programmes 2011. Colombo: Ministry of Power and Energy, 2011.


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The authors are appreciative to the Centre on Asia and Globalisation and the Lee Kuan Yew School of Public Policy for some of the financial assistance needed to conduct the research interviews, field research, and travel for this project. The authors are also extremely grateful to the National University of Singapore for Faculty Start-up Grant 09-273 as well as the MacArthur Foundation for Asia Security Initiative Grant 08-92777-000-GSS, which have supported elements of the work reported here. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, National University of Singapore, or MacArthur Foundation. Also, the views of the author(s) expressed in this study do not necessarily reflect the views of the United States Agency for International Development or the United States Government.


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Ira Martina Drupady is currently a research associate at the Lee Kuan Yew School of Public Policy, where she also graduated with a Masters in Public Policy in 2010. She currently researches energy security, rural electrification, and energy development and poverty. Before joining the LKY School, she worked as a Project Executive with the Asia-Europe Foundation. She can be reached at iramartina@nus.edu.sg Benjamin K. Sovacool is an Assistant Professor at the Lee Kuan Yew School of Public Policy. Dr Sovacool has worked as a researcher, professor and consultant on issues pertaining to energy policy, the environment and science and technology policy. He has served in advisory and research capacities at the U.S. National Science Foundation’s Electric Power Networks Efficiency and Security Programme, Virginia Tech Consortium on Energy Restructuring, Virginia Centre for Coal and Energy Research, New York State Energy Research and Development Authority, Oak Ridge National Laboratory, Semiconductor Materials and Equipment International, U.S. Department of Energy’s Climate Change Technology Programme and the International Institute for Applied Systems and Analysis near Vienna, Austria. Dr Sovacool has published or edited six books, more than 100 academic articles and presented at more than 60 international conferences and symposia in the past few years. His email is bsovacool@nus.edu.sg


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Some of the solar panels that make up the 48kW roofmounted “solar power plant� at the LOLC headquarters in Colombo, Sri Lanka


Energy Governance Case Studies Series 1. Lighting Laos: The governance implications of the Laos rural electrification program 2. Gers just want to have fun: Evaluating the renewable energy and rural electricity access project (REAP) in Mongolia 3. Living up to energy governance benchmarks: The Xeketam hydropower project in Laos 4. Settling the score: The implications of the Sarawak Corridor of Renewable Energy (SCORE) in Malaysia 5. What went wrong? Examining the Teacher’s Solar Lighting Project in Papua New Guinea 6. Summoning the sun: Evaluating China’s Renewable Energy Development Project (REDP) 7. Rural energy development on the “Roof of the World”: Lessons from microhydro village electrification in Nepal 8. The radiance of Soura Shakti: Installing two million solar home systems in Bangladesh 9. Untapped potential: The difficulties of the Small Renewable Energy Power (SREP) Programme in Malaysia 10. Harvesting the elements: The achievements of Sri Lanka’s Energy Services Delivery Project

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One of the local villagers responsible for maintaining the 12kW off-grid village hydro system at Meddawatte, Sri Lanka, leaning against its intake canal


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Strategic partners

The Lee Kuan Yew School of Public Policy is an autonomous, professional graduate school of the National University of Singapore. Its mission is to help educate and train the next generation of Asian policymakers and leaders, with the objective of raising the standards of governance throughout the region, improving the lives of its people and, in so doing, contribute to the transformation of Asia. For more details on the LKY School, please visit www.lkyspp.nus.edu.sg


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