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EEP promotes business opportunities in renewable energy and energy efficiency across the region

EEP Mekong

Improving access to sustainable energy while mitigating global climate change in the Mekong Region

The Energy and Environment Partnership (EEP) in Mekong was launched in an effort to enhance the development of renewable energy and energy efficiency solutions in the Greater Mekong Subregion as viable alternatives fossil fuel-driven power plants. Using lessons from Phase I of EEP Mekong, in Phase II NIRAS adjusted the programme’s focus and methods to gain a more efficient use of project resources in Cambodia, Lao PDR, Myanmar, Thailand and Vietnam.

The Greater Mekong Subregion (GMS) comprises Cambodia, Lao People’s Democratic Republic, Myanmar, Thailand, and Viet Nam. These countries are all tied to each other by the Mekong River, the largest inland fishery in the world.

And all of them have huge energy growth requirements. Cambodia, for example, will require approximately 80% more electricity by 2040 due to its rapid economic expansion. Furthermore, a large proportion of GMS residents currently do not have electricity at all due to the challenges faced by their governments in expanding the grid as well as simply delivering inexpensive and reliable energy due to their historic reliance on fossil fuel-driven electricity generation.

 

The continued reliance on fossil fuels, especially coal, for power generation has created dire health consequences for people living around the power plants. The damage caused by these power plants is often so bad that governments have had to displace entire populations to other areas. This does not even touch on the economic costs of lost sustainable development opportunities in rural areas due to the lack of access to electricity.

For this reason, the Finnish Ministry of Foreign Affairs (MFA) and the Nordic Development Fund launched the Energy Environment Partnership Project for the Mekong Region (EEP Mekong). NIRAS implemented phase I of the project from 2009 to 2012 and is in the process of implementing phase II (with MFA as the sole funder), which began in 2014 and is in its final months.

EEP Mekong’s overall goal was to improve livelihoods and climate resilience of rural communities through provision of reliable, sustainable, and affordable energy for households, social institutions, and businesses (especially small and medium-sized enterprises). This was done by stimulating a market for renewable energy through business development, capacity building, and the improvement of policy frameworks.

During Phase I, the project made use of a Challenge Fund to grant-fund pilot projects, (pre)feasibility and strategic studies, and renewable solutions with potential for upscaling or replication, capacity building, and information sharing in the renewable energy, energy efficiency, and waste-to-energy sectors. From across the region, 432 proposals were submitted, covering a variety of renewable energy sectors, including biofuel, biogas, biomass, energy efficiency/energy conservation, hydropower, solar, waste-to-energy, wind, and hybrid renewable energy projects. In total, 39 projects received funding and 5 proved to be scalable, benefitting 50,000 people directly.

Taking a cue from the lessons learned during phase I, NIRAS adjusted the programme’s focus. EEP Mekong Phase II now aims to catalyse funding of larger projects driven by the private sector. It also closely cooperates with business development entities and impact investors. The programme concentrates on enhancing access of the rural populations in the Mekong countries to sustainable and affordable energy services and products. 

RPG Biomass and Biogas Impact Project - Thailand

Using wastewater from an adjacent starch factory together with pulp from the starch production process to produce biogas in an anaerobic reactor, this innovative project is the first Dual Feedstock biogas plant in Thailand with a lifespan of 25 years. Each month, 30,000 Nm3 of biogas is sold to the starch factory as a substitute for fuel oil – resulting in energy cost savings of about 35% – while another 18,000 Nm3 is upgraded to compressed biogas (CBG) and sold at a CBG gas station onsite. The CBG will be sold at 10% lower cost than the fossil-fuel-based compressed natural gas (CNG) and replaces about 2500 tonnes of fossil fuel annually. Disbursement of the EEP Mekong funds is done in four installments according to the project’s milestones and outcomes to be achieved. The project has significant environmental benefits: The plant will result in the cleaning about 1.7 million m3 of starch factory wastewater, which had previously been discharged into a pond system, resulting in strong odors and a negative impact on the receiving river. In addition, the biogas generated by the pond system was released to the atmosphere, creating high negative GHG impact. Use of biogas as thermal energy source in the starch drying section will reduce fossil fuel oil consumption by 3.8 million liters per year, resulting in a GHG reduction by about 127,000 tons GHG per year. The CBG system will be replicated to about 60 other starch factories with existing biogas plants.

Project Cost:   Euro 7,079,516

EEP Contribution: Euro 847,246 (12% of project value)

Own Contribution: Euro 6,232,270

Project Duration: November 2017 - October 2018

This change of focus brought further adaptions to the way EEP Mekong was run. One such change was the development of the Challenge Fund into a result-based financing instrument. This meant that the fund now makes incentive payments to selected projects and businesses on the basis of results achieved if the businesses and project developers delivers certain pre-specified outputs within the sustainable energy access sector. Calls for Proposals are now organized to select only projects that have a large number of beneficiaries and have secured sufficient amounts of own funding to operate.

 

Additional attention is also now placed on renewable energy- and energy efficiency-related cooperation, dialogue, and information sharing between various stakeholders in the sector (including governments), with an emphasis placed on the mainstreaming of genders, ethnic minorities, those with HIV/AIDS, and the environment in the planning, implementation, and monitoring of the programme.

For more information, visit www.eepmekong.org.