Sep 4 2017

Scaling-Up Renewable Energy Program for Low Income Countries – Climate Funds Update #renewable #energy #funds


The SREP Sub-Committee was established to oversee and decide on the operations and activities of the SREP.

Composition of the SREP Sub-Committee

  • Up to six representatives from donor countries to the SREP; and
  • Six representatives from eligible recipient countries were selected on a regional basis and identified through a consultation with recipient countries.

Decision-making is achieved through consensus.

The SREP Sub-Committee invites a number of active observers to attend its meetings, including representatives from:

  • Four Civil society organisations (1 from Asia, LAC, Africa, and Developed Countries respectively);
  • Two Private sector entities (one from a developed country and one from a developing country);
  • The Global Environment Facility (GEF);
  • United Nations Development Program (UNDP); United Nations Environment Program (UNEP);
  • United Nations Framework Convention on Climate Change (UNFCCC), and
  • The Energy for the Poor Initiative (EFPI).

These observers can add items to committee agendas, recommend external experts, and request verbal interventions during discussions.

An Expert Group was established by the SREP Sub-Committee to make recommendations on the selection of country or regional programs. The Expert Group recommended six pilot countries for SREP Sub-Committee consideration and a further three countries for consideration should additional funds become available or one of the initial pilots fails.

Consultation with Non-Government Stakeholders

In designing the Climate Investment Funds, consultations took place with potential donors and recipients, the United Nations family, other multilateral development banks (MDBs), civil society organizations, and the private sector. The CIF were created on agreement from some 40 developing and industrialized countries.

Nongovernmental actors have a direct role in the governance of the fund as detailed above. Representatives of NGOs and the private sector were also part of the expert group.

Pledges, deposits and funding decisions for SCF and its subsidiary funds (PPCR, SREP and FIP) are reported to the Sub Committee in biannual trustee reports.

In May 2009, the Trust Fund Committees approved a disclosure policy supporting in-country disclosure of country-owned investment plans and strategies (developed under each of the Trust Funds) prior to their submission to a CIF Committee for approval. Proposed plans are also posted on the CIF website no later than three weeks prior to review of the proposal by a Committee. In the case of proposed programs and projects, an information document describing the proposal is to be made public at least two weeks prior to a decision on the funding of the proposal. The policy recognizes that a country or a project proposer may have justifiable reasons for not publicly disclosing all information in an investment plan or project, and in exceptional cases, subject to Committee approval, certain information may be kept confidential.

The CIF has published open data on the results of SREP on its website since March 2016.

As the smallest and most recently established of the CIFs, there has been relatively less public commentary on its operations and objectives. Programme implementation remains in its early stages, and in some cases has been slower than anticipated.

Relationship with Official Development Assistance

Inclusion as Official Development Assistance

The application of all CIF finance (concessional loans, grants, and guarantees through the MDBs) can be classed as ODA by MDBs if:

  • It meets the criterion of promoting economic development and welfare;
  • The grant element is at least 25%; and
  • The funds are to be used in a country included in DAC list of ODA eligible countries.

Financial instrument/ delivery mechanism used (e.g. grant, loan)

SREP offers grant financing, blended with IDA and other concessional financing, to leverage other public and private sector resources. SREP uses a range of financial instruments that are already available in MDBs, including:

  • Output-based aid to increase the affordability of renewable energy services provision by buying down a portion of the capital cost of the investment.
    • The buy-down will be available for renewable energy access investments that are unaffordable for low income consumers. Such assistance should be tied to investments that meet economic and social sustainability criteria, and adhere with economic principles that guide the effective use of subsidies;
  • Investment finance using quasi-equity financing, capital cost buy-down or other financial instruments to make grid-based renewable energy power, and related transmission and distribution investments financially viable;
  • Credit enhancement facilities to leverage trade finance and short-term working capital finance, and to provide partial risk coverage of loans to grid-based renewable energy investments, businesses and rural consumers who may have inadequate credit histories or limited collateral for securitizing the renewable energy loans;
  • Financial intermediation grants that can be on-lent as loans through domestic financial institutions, including micro-finance institutions for renewable energy investments;
  • Incremental budget support for national/regional programs delivering community services such as health care, water supply and education. Incremental support will be available for funding renewable energy hardware and services, including arrangements to assure long term repair and maintenance.

Nature of recipient country involvement

SREP pilots are country-led, build on and draw benefit from, national policies so that renewable energy is fully integrated into national energy plans. SREP activities are designed and implemented with the full and effective participation and involvement of, and with respect for the rights of, indigenous peoples and local communities.

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