Name of Fund

Scaling-Up Renewable Energy Program for Low Income Countries (SREP).

Date created

SREP was made operational on December 14, 2009 

Administrating organisation

The World Bank

Objectives

• Serve as a model in assisting low income countries to foster a transformational change to low carbon pathways by exploiting renewable energy potential
• Overcome economic and non-economic barriers to scale up private sector investments to achieve SREP objectives
• Highlight economic, social and environmental co-benefits of RE programs
• Enable blended financing from multiple sources to enable scaling up of RE programs
• Facilitate knowledge sharing and exchange of international experience and lessons

Donor contributions

Activities supported

SREP should provide financing for renewable energy generation and use of energy using proven “new” renewable energy technologies. For purposes of SREP, new renewable energy technologies include solar, wind, bioenergy, and geothermal, as well as hydropower with capacities normally not exceeding 10 MW per facility.

SREP should support complementary technical assistance as this is essential for transformative and enduring change and country engagement and ownership. This could include support for planning and pre-investment studies, policy development, legal and regulatory reform, business development and capacity building (including for knowledge management and monitoring and evaluation) as an integral and complementary part of renewable energy investment operations. 

SREP support should be available for funding the preparation of SREP programs and, recognizing the special needs of low income countries, the SREP Sub-Committee should consider the financing of a dedicated support program to help countries prepare for project implementation. Technical assistance should also be available during project implementation.

Operational criteria are used to prioritize and select activities to be funded by SREP, and can be found in the SREP Design Document

Conditions and eligibility requirements

Eligible new renewable energy applications comprise of:

• Grid and off-grid electricity applications including small hydro or biomass-based power, wind and solar powered systems, and geothermal. Financing would be available for renewable electricity generation and use, and for transmission and distribution grids needed to evacuate/use renewable electricity;  
• Cooking and heating applications including sustainable community forests, improved cook stoves, geothermal heating, and biogas or other renewable-based fuels.

Preference will be given to projects with strong poverty alleviation benefits, through increased economic growth, enhanced generation capacity or improved services to poorer communities that have limited or no access to modern energy to meet household, community service and productive use needs. Economic and/or social development as well as environmental benefits will be key criteria for project selection.

Proposals for SREP co-financing will need to demonstrate how they scale-up from lessons learned in pilot and demonstration projects and programs (such as those supported by the GEF). A key criterion will be the potential of the proposal for demonstration and replication, particularly the potential for removing barriers in the enabling environment beyond the immediate project boundary so as to facilitate scaling up through private sector investments.

• Be country-led, with delivery targeted through a designated national authority. This would enable the full integration of SREP to the national energy plan, and allow it to build on, and draw benefit from, national policies.
• Take a programmatic and outcome-focused approach for investing in renewable energy as an alternative to conventional energy sources such as coal or oil. A “SREP program” in a pilot country would be comprised of renewable energy investments and technical assistance, together with support for policy changes to greatly increase the use of renewable energy.
• Commit sufficiently high levels of SREP funding and leverage significant additional financing from MDBs and the private sector to achieve large scale renewable energy impacts.
• Work in a smaller number of low income countries, selected using robust, objective criteria to maximize the impact and the demonstrative effect of SREP.
• Utilize the transformational potential of the private sector and civil society groups to achieve economic development and support long-term social and environmental sustainability.
• Give priority to renewable energy investments that create ‘value added’ in local economies, by targeting renewable energy technologies that allow for the generation and productive use of energy.
• Seek wider co-benefits, such as improved climate resilience, reduced local pollution and increased energy security.

a) Transparent assessment of need, as determined by high dependence on conventional fuels for electricity generation, low electricity access, and/or high dependence on traditional use of biomass for thermal applications. 

b) Country’s stated interest to take a programmatic approach to large scale renewable energy development that could guide the country towards a low carbon development pathway in the energy sector.

c) Institutional capacity to undertake a large scale SREP-funded program.

d) Country distributions across regions [with a special focus on Sub-Saharan Africa.]

e) The renewable energy resource potential in the country.

While the Trust Fund Committees of the funds may decide on the programming priorities and financing modalities for the CIFs, the development and management of individual funded projects and programmes will be the responsibility of the MDBs and be reliant on their own policies and procedures for disbursement of resources.

More detailed and specific criteria for choosing country pilots can be found here: Criteria for Selecting Country and Regional Pilots under SREP (March 2010)

Funds disbursed to date

As of January 2012, USD 5 mn has been approved and disbursed for administrative expenses and 1mn has been disbursed for projects.  Overall, USD 35.62 mn has been approved for Investment plans, Investment Plan Preparation Grants and project implementation costs. Four investment plans of USD 160mn have been endorsed so far. 

Uptake and projects supported

Proposed life of fund

The sunset clause of the SCF Trust Fund will apply to the SREP.

Further information

For all SREP related documentation, visit: http://www.climateinvestmentfunds.org/cif/srep

SREP Programming Modalities and Operational Guidelines

SREP Financing Modalities

Decision-making structure for fund disbursement

Establishment of Sub-Committee: Following the pledge of the United States, the SCF Trust Fund Committee approved by mail the establishment of the SREP Sub-Committee with the following membership: 

1. Current contributor country members: Australia, Denmark, Japan, Korea, Netherlands, Norway, Spain, Switzerland, United Kingdom, United States
2. Representatives from eligible recipient countries to the SREP were selected on a regional basis and identified through a consultation process among recipient countries.  Current recipient country members: Armenia, Ethiopia, Honduras, Kenya, Nepal

The SREP Sub-Committee is responsible for:

• appointing the Expert Group and approving criteria and guidance to be followed;
• selecting country and regional programs;
• approving financing terms and modalities;
• endorsing further development of activities in country plans;
• approving SREP financing for programs and projects;
• approving a results measurement framework for SREP and periodic effectiveness and impact reviews of SREP programs and activities;
• ensuring lessons learned are applied to future investments and shared through the SCF Trust Fund Committee to the UNFCCC, the Partnership Forum and interested stakeholders;
• preparing periodic reports to the SCR Trust Fund Committee on the operations of SREP;
• ensuring SREP activities complement the activities of other development partners active in the field of climate change (including the Global Environment Facility (GEF), United Nations Development Programme (UNDP) and United Nations Environment Programme (UNEP));
• exercising other functions deemed necessary to fulfill the functions of the SREP.

Decision-making is done by consensus by the Sub-Committee. 

Consultations with non-government stakeholders

The Expert Group comprises 6 members, from Civil Society and the Private Sector as at May 2010. The current composition can be found on the SREP Expert Group web page here http://www.climateinvestmentfunds.org/cif/SREP_Expert_Group

SREP Sub Committee observers:

Recognizing that it is important to ensure good linkages with key partners in order to promote the efficient use of resources and complementarity with other sources of financing, the SREP Sub-Committee will invite as active observers to its meetings, representatives of Global Environment Facility (GEF), United Nations Development Program (UNDP), United Nations Environment Program (UNEP), the United Nations Framework Convention on Climate Change (UNFCCC), and a representative of the Energy for the Poor Initiative (EFPI).

According to the SREP Observers web page, there are also 8 observers from Civil Society, and 3 observers from the Private Sector. 

Role of Observers:

1. Request the floor during discussions of the Trust Fund Committees and Sub-Committees to make verbal interventions. Selected observers from each of the constituency groups are requested to work together to coordinate their interventions so as to maximize efficiency of the Trust Fund Committee and Sub-Committee proceedings. 
2.  Request the Co-Chairs to add agenda items to the provisional agenda.
3.  Recommend external experts to the Trust Fund Committee and Sub-Committees or the Co-Chairs to speak on a specific agenda item.

  Responsibilities of Observers:

1. Consultation with other stakeholders of their constituency.
2. Representation in meetings of the interest of their constituency, not just their own organization.
3. Compliance with agreed consultation guidelines/standards developed by a representative group of their constituency.

More information about SREP Sub Committee Observers can be found here http://www.climateinvestmentfunds.org/cif/SREP_Observers

How fund disbursement is reported

Issues raised by the public

The World Bank’s CIFs will create parallel structures for financing climate change adaptation and The SCF has been criticised by civil society groups for creating parallel structures for financing climate change adaptation and mitigation outside the ongoing multilateral framework for climate change negotiations and within a process dominated by G8 countries. Developing countries have long argued for greater commitments and increases in financial resources under the UNFCCC to enable them to fulfil their obligations under the Convention but have maintained that such resources should be placed under the guidance of the state parties to the Convention to ensure consistency with internationally agreed priorities and principles (See: Celine Tan, Third World Network, ‘World Bank’s Climate Funds Will Undermine Global Climate Action’ 10 April 2008: www.twnside.org.sg/title2/finance/docs/Climate.Funds-Commentary.Revised.doc).

The CIFs are also criticised for the significant speed at which they have been designed, promoted and implemented without due consultation with wider stakeholders. (See: Celine Tan, Third World Network, ‘No additionality, new conditionality: a critique of the World Bank’s Climate Investment Funds’ Briefing Paper 2, 2008: www.foe.org/pdf/CIF_TWNanalysis.pdf).

The language of the Fund has been criticised for implying recognition of the UNFCCC principles as merely guidance for the Fund’s policies rather than as binding internationally negotiated commitments of state parties which must be respected. They also demonstrate a lack of familiarity with the principles negotiated under the Convention and the legal status of commitments under the UNFCCC (see: http://www.twnside.org.sg/title2/finance/twninfofinance20080510.htm).