EKN-RSPN Pakistan Domestic Biogas Programme (PDBP)
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Introduction
PDBP’s vision for the next 8-10 years is to foster and support the creation of a commercially viable biogas sector in Pakistan.
During the period the vision is to set up 300,000 biogas plants across Pakistan which will adhere to all guidelines required for the Clean Development Mechanism (CDM) so that Carbon Credits obtained from the project can be redeemed and utilized for further expansion of the programme. The first module of PDBP, being supported by EKN, aims at 14,000 biogas plants being setup in Central Punjab. To ensure that the vision materializes, partnerships and agreements with various stakeholders such as RSPs, Government Organizations, Micro Finance Institutions, NGO’s etc will be formulated. Strong, dynamic and profitable biogas construction companies will eventually constitute significant component of the new and viable biogas sector in the country.
Operations have begun in central Punjab and will subsequently expand to parts of Sindh, Khyber Pakhtunkhwa, and Baluchistan provinces. In order to be able to provide adequate support, provincial biogas offices will be established in the provinces/regions and Quality Control Centres will be established to support their activities.
Project Strategy and Approach
| The project fits within the larger programme of which the design of this project draws on SNV’s experience in large-scale dissemination programmes for domestic biogas in other parts of Asia. For the past two decades, SNV supported preparation and implementation of domestic biogas programmes in countries in Asia and more recently, in Africa. In particular, the programmes in Nepal and Vietnam – SNV’s longest running initiatives – have met with considerable international acclaim. Important elements of SNV’s approach are: ■ Thorough, participatory and context-specific preparation; ■ A sustainable sector as the ultimate long-term objective; ■ Interlinking impact and capacity development targets; ■ Promoting a market-oriented approach; ■ Attributing sector-functions to multiple stakeholders. |
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The Pakistan Domestic Biogas Programme aims to develop the domestic biogas sector as a whole. Sector development implies the close cooperation and coordination of all relevant stakeholders (government, non-government and private sector) at all levels (micro and macro) whereby those stakeholders are equipped to fulfil the necessary functions. The function chart indicates the main functions in a large-scale domestic biogas programme and its relations.
The proposed project is designed to put down a robust foundation for the establishment of a commercially viable domestic biogas sector. The proposal uses a time horizon of 4 years to strengthen the commercial biogas sector.
The project will promote an approach in which government, non-government and private sector organisations, in a complementary fashion, assume those sector functions that intrinsically fit the character of each organisation or institution. Through the project, the stakeholders are enmeshed in a supply and demand context in which the supply side ensures “off-the-shelf availability” of the technology while the pluralistic demand side organizes the beneficiaries, provides microfinance, promotes the technology and integrates it into rural development activities.
Institutionalization
A National Biogas Steering Committee, with representatives of all major stakeholders, will facilitate coordination of the programme and promote a coherent policy environment. The Pakistan Domestic Biogas Programme (PDBP) will be responsible for coordination and management of the activities. PDBP will be able to react swiftly to the requirements of the sector and coordinate between the supply-side (construction, after sales service, quality control) and demand-side activities (awareness creation, promotion, extension).
Service quality will be condition sine-qua-non for user-confidence as well as for promotion of the technology. Precise control of the quality of construction and after sales and extension services will not only safeguard the investment of the farmer and enable the farmer to maximize the benefits of the investment, but will also level the playing field for aspiring biogas companies to operate on the emerging market. Quality control plays a crucial role in the project’s quality management objective. The quality management system will be compatible with quality assurance certification and carbon deal registration.
Quality control will take place at the BCC and PDBP levels. Biogas Technicians employed by the PDBP will visit randomly selected biogas plants to check the quality of the services as provided by the BCCs against agreed service standards in the contract and developed by the project. Biogas Supervisors, employed by the BCCs, will visit each newly completed installation to assess the quality of construction against agreed standards (100% checks).
Private sector development
Private sector Biogas Construction Companies (BCCs) will fulfil essential processes of the project – construction, after sales service, and primary user training. At the end of the planned project and set targets, it is anticipated that about 117 BCCs will be in operation. In addition, judging from experience in other countries, by the end of the first project, 2 to 5 biogas appliance manufacturers will be producing for the programme.
The programme will encourage formal registration of BCCs in Punjab and thus build a vibrant private sector in biogas development. A BCC Association will be formed and registered. Standards of manuals developed for construction, after sales service and related appliance are to be developed.
Micro Finance
As the program expands and demand increases, household who can not afford the cost as a lump sum payment would require a credit facility to help in making the required payment. The project will broker credit conditions for financing long-term investments that are not directly income generating. The project will seek cooperation with regular (micro-) credit institutions and rural development funds (revolving loans).
A detailed credit feasibility study will be conducted at the start of the project to establish the capability of households to pay the loans and understand the opportunities and constraints of the MFIs in financing biogas plants. As an outcome of the study appropriate mechanisms to finance biogas will be developed. To expand and diversify suitable credit facilities MFIs will market the product. To make this partnership work the project will implement a pilot scheme for biogas finance through which MFIs will be encouraged to introduce the biogas plants in their portfolio. Only loans in excess of PKR 10,000/- will be included in this scheme. The terms and conditions of the loan would vary from client to client but the modality can be worked out so that the purchase of the product is made easier. To facilitate access to microfinance partnerships with the Punjab Rural Support Programme (PRSP), the National Rural Support Programme (NRSP), the Zarai Taraqiati Bank Limited ZTBL), other commercial banks and local NGOs are being pursued.
Carbon fund
Given that the domestic biogas digesters will reduce GHG emissions, the programme can in principle generate carbon revenues through the carbon market. RSPN has signed a MoU with the Ministry of Environment, which hosts the CDM (Clean Development Mechanism) Cell, which is the focal point for CDM related activities in Pakistan.
The project will be constructing 14,000 domestic biogas plants in Punjab. Beneficiary households in the project will receive an upfront quality ensuring discount on their biogas investment together with free technical support and awareness raising services. In return they will authorize the project to collect any carbon credits generated from their use of biogas plants. If carbon revenue is realized, the project will use the revenue to increase the target in Punjab beyond the 14,000 target set hence the carbon revenue will directly benefit the households in this project. RSPN is signing agreements with individual households to get the right to claim carbon benefit, which will be utilized in the project to promote additional biogas for additional households. As the chair of the NBSC, MoE will direct the programme to use carbon revenue effectively and transparently.
Gender mainstreaming
The project promises to provide substantial benefits to women’s welfare and empowerment. A baseline study will quantify the amount of time women and children in rural areas currently spend in the collection of fuel, in other economic and social activities, and in education. The project has a clear way forward for increasing the role of women in the project in both supply- and demand-side activities. The strategy is based on identified opportunities to involve women in the supply side as owners or promoters, and in the demand side as trainers, community organizers, income-generation facilitators, micro-finance lenders, and as integrators of biogas into other social and economic activities.
Quality Ensuring Discount
Initially 20%-30% of the cost of the plant will be set aside as a quality ensuring discount for long term operation of the plant. The resulting demonstration effect is a key success factor for the project. Providing the quality ensuring discount will serve a dual purpose:
The quality ensuring discount creates programme leverage by means of a controlled payment mechanism coupled with a penalty system on fault detection on the quality of the services as provided by the BCCs.
The discount will be used to introduce the quality control system by mobilizing users and constructers and helping them in overcoming the risk of trying out the new technology.
Size |
4m3 |
6m3 |
8m3 |
10m3 |
15m3 |
Cost |
43,573 |
47,975 |
53,258 |
58,393 |
79,005 |
QED |
7,000 |
7,000 |
7,000 |
7,000 |
7,000 |
Payable |
36,573 |
40,975 |
46,258 |
51,393 |
72,005 |
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