Centre for Rural Technology, Nepal (CRT/N) An Insight to CDM Projects in Nepal Cookstove CDM Project in Nepal: Challenges for an NGO Lachana Shresthacharya (Sthapit) Subarna Kapali Conference on Improving Energy Access through Climate Financing 28 March 2013 The Netherlands

Centre for Rural Technology, Nepal (CRT/N) Presentation Outline Overview of CDM Projects in Nepal CRT/N’s Cookstove CDM Project Household energy access-before and after Challenges Role of NGOs Role of Academic Institutions

Centre for Rural Technology, Nepal (CRT/N) Overview of CDM Projects in Nepal All six of the CDM registered projects in Nepal are based on renewable energy technology (RET ) –First two projects on biogas - registered in –Another project on micro hydro - registered in 2010 –Two projects on biogas - registered in 2011 –A project on Improved Water Mills and on cookstoves – under validation (2013) –A PDD on solar home system being prepared (2013) Above mentioned projects have been developed by the Alternative Energy Promotion Centre (AEPC)/Government of Nepal CRT/N is the first NGO in Nepal to develop CDM project on improved cookstove - registered in 2011 Several other NGOs have come forward with PPDs on CDM projects now which are currently at Designated National Authority (DNA) for approval second registered project on ICS in the world.

Centre for Rural Technology, Nepal (CRT/N) CRT/N’s CDM Project on ICS “Efficient Fuel Wood Cooking Stoves Project in Foothills and Plains of Central Region of Nepal” Project reference no.UNFCCC: 4530, GS756 Project ProponentCentre for Rural Technology, Nepal Pre-financed byEgluro Limited, UK Project AreaParsa, Bara, Rautahat, Sarlahi, Mahottari and Dhanusha districts in Central South Nepal MethodologyAMS-II.G ver.2 Registration Date15 March 2011 (Date of registration action 6 June 2011) ValidatorDet Norske Veritas (DNV), Norway No. of Stoves Targeted22920 TechnologyFixed type mud stove and portable rocket stove Expected CER Crediting Period1 May April 2021 (Fixed) Project Activity Start Date1 October 2010

Centre for Rural Technology, Nepal (CRT/N) Household Energy Access: Before

Centre for Rural Technology, Nepal (CRT/N) Household Energy Access: After

Centre for Rural Technology, Nepal (CRT/N) Issues and Challenges in Developing the CDM Project Technical issues –Non Renewable Biomass –Efficiency of the stoves –Starting date and crediting period –Stove life is shorter than crediting period- what to do?

Centre for Rural Technology, Nepal (CRT/N) Issues and Challenges in Developing the CDM Project Programme related issues –In contrast to conventional development project where dissemination of ICS was necessary, CDM project required additional goal to generate a specified amount of CERs –Higher level of coordination with government agencies was needed to establish geographical boundary of the CDM project to avoid duplication of the efforts in the same area as required by the validation procedure –Bear a long period – 16 months of validation process –Securing pre-finance for the project – CRT/N was able to convince UK based buyer, Egluro Limited, to provide upfront investment to start the project activities

Centre for Rural Technology, Nepal (CRT/N) Issues and Challenges in Being Pre-financed Project financing related issues –Because of pre-financing, CRT/N was in a weaker position during ERPA negotiations with the buyer –Waiting for a favorable market situation to reap a higher price for CERs was not feasible - CRT/N was under pressure to initiate the project activities as soon as possible from the communities and the coordinating government agencies. –Lost leverage as all CERs were sold at once to the buyer at the same rate. –Lost the opportunity of being the focal point for communication with the CDM Executive Board –Reluctance from investors when market price for CERs is low affecting the project performance at the field With pre-financing support CRT/N enabled the timely commencement of the project and risk of the price going down is mitigated

Centre for Rural Technology, Nepal (CRT/N) Role of NGOs in CDM Projects Technology and quality assurance –research and development, dissemination, monitoring Social mobilization – work with large number of people Timely implementation of project activities Capacity building of local partners and promoters Hiring services of independent third parties for monitoring Negotiation with buyers, building confidence with buyers Coordination with national and government agencies

Centre for Rural Technology, Nepal (CRT/N)

Role of Academic Institutions in CDM Capacity building of NGOs Awareness among decision makers Technical capacity to develop project documents, monitoring and reporting Negotiation skills Link between CRT/N and University of Twente Head of the organization is trained from CRT/N CRT/N took its first step into CDM after one of its senior staff attended ICREP in 2008 CRT/N staff were heavily involved in the conceptualization of the project and preparation of PIN and PDD CRT/N staff is now invited by DNA to evaluate CDM proposals CRT/N staff has served as resource person international training on CDM organized by Nexus- Carbon for Development, Singapore

Centre for Rural Technology, Nepal (CRT/N) Thank You for Your Kind Attention Centre for Rural Technology, Nepal (CRT/N) Kumaripati, Lalitpur GPO Box 3628 Kathmandu, Nepal Tel.: / Fax: Web: