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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.
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 delivering inexpensive and reliable energy as a result of 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 needed 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 Ministry for Foreign Affairs of Finland (MFA) and the Nordic Development Fund launched the Energy and Environment Partnership Programme with the Mekong Region (EEP Mekong). NIRAS implemented Phase I of the project from 2009 to 2012 and recently completed Phase II, which began in 2014 with MFA as the sole funder, in May 2019.
EEP Mekong’s overall goal was to improve livelihoods and climate resilience of rural communities through the 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, of which five projects proved to be scaleable, benefiting 50,000 people directly.
Taking a cue from the lessons learned during Phase I, NIRAS adjusted the programme’s focus during Phase II. EEP Mekong now aimed to catalyse funding of larger projects driven by the private sector and occasionally by NGOs. The programme also closely cooperated with and complemented business development entities and impact investors, and focused on enhancing access to sustainable and affordable energy services and products amongst rural populations in the Mekong region.
This change of focus brought further adaptations 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 made incentive payments to selected projects and businesses on the basis of results achieved, once project developers delivered certain pre-specified outputs within the sustainable energy access sector. Calls for proposals were organised to select only projects that had a large number of beneficiaries and displayed a demonstrated ability to secure sufficient amounts of own funding to operate.
Additional attention was 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.
These changes reaped significant results. During Phase II, a little over 190,000 people (of which about half were women) benefited from EEP Mekong-funded projects. These benefits mainly took the form of capacity building, employment, health benefits, and improved access to renewable energy. 63% of the programme's investment projects were highly scaleable, and several of the project developers are in the process of replicating the projects elsewhere.