International Workshop on Small and MediumScale Biogas

sasasd ADB Asian Development Bank APMB Agriculture Projects Management Board BCC Biogas Construction Company BME Biogas Mason Enterprises BOF Blue Orchard Finance BP National Biogas Prog

The Evolution of Public-Private Partnerships

to Accelerate the Development of Commercial Biogas Sectors

26-28 NOVEMBER 2013, HANOI, VIETNAM

Report by SNV Vietnam March 2014

Contact person: Dagmar Zwebe, dzwebe@snvworld.org International Workshop on Small- and Medium-Scale Biogas

sasasd

ADB Asian Development Bank APMB Agriculture Projects Management Board BCC Biogas Construction Company

BME Biogas Mason Enterprises BOF Blue Orchard Finance

BP National Biogas Program for the Animal Husbandry Sector in Vietnam BTC Biogas Technology Centre

CSR Corporate Social Responsibility CDM Clean Development Mechanism CER Certified Emissions Reduction DARD Department of Agriculture and Rural Development DGIS Directorate-General for International Cooperation DMHCC Department of Meteorology, Hydrology and Climate Change E4ALL Energy for All

EEP Energy and Environment Partnership EKN Embassy of the Kingdom of the Netherlands EnDev Energising Development programme

GHG Greenhouse Gas GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH ICD International Cooperation Department

LCASP Low Carbon Agricultural Support Project LULUCF Land Use and Land Use Change and Forestry MARD Ministry of Agriculture and Rural Development MEF Microfinance Enhancement Facility

MIFA Microfinance Initiatives for Asia NAMA Nationally Appropriate Mitigation Action ODA Official Development Assistance

PMU Project Management Unit (BP) PPP Public Private Partnership PVC Polyvinyl chloride

QSEAP Quality and Safety Enhancement of Agricultural Products RBF Results Based Financing

RGOB Royal Government of Bhutan SNV Netherlands Development Organisation UNFCCC United Nations Framework Convention on Climate Change VBA Vietnam Biogas Association

VER Voluntary Emissions Reduction VGS Voluntary Gold Standard

Abbreviations

2.3.1 Introduction and short description of the group assignments _ 13 2.3.2 Highlights from each country _ 13 2.3.3 General Conclusions 17

3.1 Domestic Biogas Program 18 3.2 Hung Vuong Composite Company 19 3.3 Medium scale brick biogas installation 20

Table of Contents

Vietnam was honoured to host the International Biogas Workshop on Small- and Medium Scale Biogas from the 26 to the 28th of November 2013 in Hanoi The Ministry of Agriculture and Rural Development (MARD) has been cooperating with SNV Netherlands Development Organisation since 2003 on the development of the Domestic Biogas sector – financially supported by Directorate-General for International Cooperation (DGIS) of the Ministry of Foreign Affairs of the Netherlands; more recently, a start was made with the development of the medium scale biogas sector in Vietnam The first day of the workshop, and especially the opening sessions was fully in the theme of the celebrations of the 10 year cooperation Opening speeches were given by representatives from MARD, the Embassy of the Kingdom

of the Netherlands in Vietnam (EKN), the Asian Development Bank (ADB), the National Biogas Program for the Animal Husbandry Sector in Vietnam (BP) and SNV The jubilee book prepared to mark and celebrate 10 years of cooperation on biogas sector development between MARD and SNV was launched

The following plenary session, addressing aspects of biogas development in Vietnam, was introduced with a film that highlighted many of the significant events and achievements of the national program during the past 10 years Presenters from SNV, the ADB supported Low Carbon Agriculture Support Project (LCASP), MARD and the Institute of Energy provided an overview of the status and future outlook

of biogas activities in Vietnam While the past 10 years has seen very significant uptake of biogas technology in Vietnam, with over 135.000 digesters that have been constructed as a result of BP, it is estimated that some 97% of the potential domestic market is still untapped Until now the main focus has been on domestic installations which have enjoyed a range of subsidies both from government and ODA funding sources, enabling the establishment of a large number of construction and supplier enterprises From this foundation a significant market for medium-scale installations is beginning to emerge while there is increasing demand to include a wider range of digester models in future programs

In addition, the current end-user subsidies are being reviewed and alternative financial mechanisms such as incentives for enterprises, low-interest loans and microfinance arrangements are being considered

During the afternoon session on the first day, country groups addressed four questions about the evolution of Public Private Partnerships (PPPs) as biogas sector becomes more market-based Participants were tasked to consider what market-based means and what the role of government might

be in such a scenario The discussion included issues around decreasing subsidies; quality control in a market-based scenario; and how the market can best leverage its relationship with government to influence policy and enhance the success of PPPs Different countries highlighted that they were at different stages of evolution of the biogas market and in different social and political environments, so these questions generated quite diverse responses according to the local context The positions taken ranged from strong support for full commercialisation with phasing out of subsidies and government intervention in more developed markets through to a strongly held view that government should continue its hands-on involvement including subsidies to be maintained or increased in the market segments consisting of poor households The role of subsidies in quality control was recognised, but also ongoing training and certification were mentioned as measures to ensure standards Collaboration between government and enterprises was strongly supported but there was general consensus that while government should be involved in policy and regulation, the private sector should be responsible for implementation

The second day was taken up with a full day of field visits to three different locations A domestic farm

in Bac Ninh with a 15m3 biogas plant supported under BP showcased some of the best outcomes from Summary

this kind of installation in Vietnam The farm has clean, hygienic surroundings and the household fully utilises both biogas and bioslurry, enjoying multiple benefits from cooking for the household and making rice wine, to providing feed for the fishponds and fertiliser for the large vegetable garden At a farm in Bac Ninh with around 400 pigs, participants visited a 200m3 medium-scale biogas plant, one of 9 built under an EEP supported and SNV implemented pilot project during 2012-2013 This pilot plant has provided key learnings that will inform future medium-scale construction and development The owner

of the pilot plant is looking for opportunities to expand both his farm and the digester capacity The visit

to the premises of the Huong Vuong composite digester manufacturer provided an insight into the intensive methods still being used for this kind of construction Participants were able to see most stages

labour-of the manufacturing process as well as the company’s wide range labour-of appliances Hazardous working conditions at the plant site were of considerable concern to many people, highlighting the need to address workplace health and safety in supporting and helping (to establish) local suppliers

The plenary session on the third day focussed on financial mechanisms, opportunities and incentives A representative from the Department of Meteorology, Hydrology and Climate Change (DMHCC) spoke about the application of Nationally Appropriate Mitigation Actions (NAMAs) initiatives in Vietnam and the issues being faced It was pointing out that while a clear concept of NAMA is still evolving, it is difficult

to raise public awareness and to improve institutional capacity A presentation on Results Based Financing (RBF) outlined its key characteristics and highlighted some of the issues to be addressed in its practical application as the risk is carried by the market rather than by the donor, so it is essential to have strong financial structures in place Finally, the status of current and future carbon markets was discussed, particularly the fact that there are encouraging signs that the voluntary market will offer reasonable returns for biogas in the immediate future because of its appeal on socio-economic impacts This may trigger for example funding by the private sector through Corporate Social Responsibility programs

Four parallel sessions occupied the remainder of the morning In identifying the roles and responsibilities

of Biogas Associations, there was a view that such organisations should promote partnerships and broker links between different market groups, while financial sustainability could best be achieved by providing highly valued services to members Micro-scale biogas solutions were discussed focusing on the provision

of technology that is affordable, easy to install and maintain, but still of good quality to ensure reliability The transition from subsidies to microfinance to support biogas installation should be carefully managed

to ensure access to the market is retained and that quality control issues are addressed

During the final afternoon session an update was provided on the ADB supported activities under the Energy for All (E4ALL) partnership With its commitment to facilitate the installation of 1 million biogas plants by 2016, this group is involved with training, quality control, monitoring and assessment activities

to support sustainable market development Meanwhile, the Global Alliance for Productive Biogas is engaged in knowledge generation and exchange, awareness raising, advocacy and resource mobilisation

to help alleviate poverty and contribute to a sustainable economy by providing people with productive biogas

Participants are looking back at a successful workshop with an interesting but difficult theme of “The Evolution of Public Private Partnerships to Accelerate the Development of Commercial Biogas Sectors” The state of evolution is different in each country and heavily dependent on the local context The workshop offered a great platform to exchange knowledge and interact with each other to – together- move forward towards more sustainable biogas markets Evaluations show again that the workshop was highly appreciated and extremely well organised

1 Introduction

In 2003, the Netherlands-Vietnam cooperation on domestic biogas was initiated Over the past decade, the Vietnam Ministry of Agriculture and Rural Development (MARD) and SNV Netherlands Development Organisation have clearly demonstrated the great value of this public-private partnership for the development of the biogas market in the framework of the National Biogas Program for the Animal Husbandry Sector (BP) Additional financial support was secured from the Asian Development Bank (ADB), the World Bank and others for the further growth of the sector resulting in a total of about 200,000 digesters installed by 2013 of which over 135,000 have been installed by BP The biogas programme achieved international recognition through winning the prestigious World Energy Award, Ashden Award, and Energy Globe Award In April 2011, the Vietnam Biogas Association (VBA) was established with a vision to become the leading organisation representing biogas sector enterprises, institutions and individuals in Vietnam As a spin-off of the domestic biogas programme, a niche market has started to evolve around medium-scale biogas plants

Although a lot has been achieved in just 10 years, there is still work to be done in order to establish a commercial biogas sector in Vietnam In order to achieve this, the partnership between public and private parties in the sector will need to further evolve Carefully designed institutional development will have

to take place: What are the roles to be played by respectively private and government actors? What will

be the added value of the biogas association in the sector? Other countries in Asia, each in a different manner and context, are experiencing challenges in evolving value-adding public-private partnerships

in the biogas sector

Sharing the experiences between these countries is essential to further develop the biogas sectors in Asia More than 50 different organisations cooperate in the Working Group on Domestic Biogas convened

by SNV under the Energy for All Partnership (E4ALL) initiated by the ADB The objective of this group is the construction of one million domestic biogas plants across fifteen Asian countries by 2016, which would provide access to sustainable energy to five million people The achievement of this target will not be possible without adequate institutional set-up and cooperation between public and private actors

In addition, emerging market-based financial mechanisms like results-based financing and climate finance; technical innovations; and demand for medium-scale biogas also need a platform for discussion and advancement

To support this need for on-going discussion and collaboration, the VBA, MARD through BP and SNV, in cooperation with the ADB/E4ALL, organised the International Biogas Workshop in Hanoi, Vietnam, from

26 to 28 November 2013

1.1 Objectives

This workshop had the following objectives:

i To learn and share experiences regarding the progress and challenges facing the domestic and

medium-scale biogas programme in Asia;

ii To present, discuss and advance the current institutional set-up of the biogas sector including

the possible roles of biogas associations and the need for changes in the partnership between private and public actors to arrive at a commercial sector; and

iii To present, discuss and advance the development of market-based financial mechanisms;

technical innovation; medium-scale biogas plants; and productive use of biogas

Expected output is an outline of the main issues, lessons learnt and prospects by country;

To present and discuss the latest developments and opportunities on key issues related to the transition from biogas projects to national programs to sectors

Expected output is opportunities mapped for developing and resourcing of biogas sectors on: carbon financing, product development, bio-slurry, credit facilities and the enabling environment

1.2 Participants

Approximately 150 people participated in the workshop, twice the number anticipated in the first workshop announcement circulated in early September 2013 Interest was such that more than 100 interested people had to be turned away Delegates came from twenty-one countries and included key participants in biogas sector development representing private enterprise, civil society and government initiatives as well as development partners and financial institutions supporting biogas development See Annex 2 for the complete participant list

2 Day 1 – 26 th November 2013

2.1 Plenary Session: Opening of the workshop

2.1.1 Opening Address

Mr Tram Kim Long, Head of Department of International Cooperation, Ministry of Agriculture and

Rural Development (MARD)

On behalf of the Vietnamese Government, Mr Long welcomed all participants to Vietnam, and wished them a pleasant stay, good health and happiness

In his opening speech Mr Long addressed the importance of biogas technology as a response to climate change and as an important pillar of the 2020 outlook for Vietnam

On behalf of MARD he complimented and thanked BP, SNV and the Government of the Netherlands for the close cooperation in supporting Vietnam and specifically the rural farmers of Vietnam with gaining access

to biogas technology Over 70% of the Vietnam people still live in the rural areas, and their farming activities pollute the environment as there are improper waste management systems in place Biogas technology brings happiness to the farmers, and limits GHG emissions at the same time

MARD is very proud of the many international awards the program has won over the years (2006, 2010 and 2012) as it shows there is recognition at the highest level that using cheap and available energy sources, and creating access to these sources for all people can make a difference

During this workshop the aim is to share experiences and knowledge, and to learn about the successes and lessons from the Vietnamese biogas sector as well as the broader Asian market

On behalf of MARD, Mr Long presented flowers to SNV Vietnam’s director Mr Mendez to thank him for

10 years of cooperation

2.1.2 Opening remarks – Introducing the 10 year celebration of Vietnam–Netherlands cooperation on household biogas in Vietnam

Mr Job Runhaar, Embassy of the Kingdom of the Netherlands in Vietnam

In his opening remarks, Mr Runhaar was happy to inform the participants

on the celebration of 40 years of cooperation between the Netherlands Government and the Vietnamese Government For this reason celebrations were being held in Ho Chi Minh City, where a Holland Village has been set-up

Mr Runhaar said that the 40 years of cooperation had been a long and interesting journey with trips off the beaten track, bumpy rides as well

as sunny skies The Netherlands Government has been a proud sponsor

of BP for 10 years now and Mr Runhaar congratulated all the people involved in this journey When the program started the question was asked “could the success of Nepal be replicated in Vietnam and other countries?” Now we know that this indeed is possible, and markets can

be developed with many opportunities for entrepreneurs, farmers and especially women The support for the program will continue through

ENDEV, to which the Netherlands Government is the largest donor The Netherlands Government will continue to support new sustainable developments and poverty alleviation solutions

Recently Mr Runhaar was able to join a field visit to the biogas program The enthusiasm of the BP team, the happiness of the farmers and the developments of the enterprises were clearly visible to him Regarding the field trip organised on the second day of the workshop, Mr Runhaar was sure that participants would all experience the same and would see the changes the biogas technology brings to Vietnam

2.1.3 Opening remarks from ADB

Mr Elmar Elbling, Energy Specialist, Asian Development Bank

In his opening remarks, Mr Elmar Elbling said that ADB believes it is very appropriate to have this workshop in Vietnam in 2013 as there are so many accomplishments that can be presented here today Besides the already mentioned awards and results, the Vietnam program is also now registered as a carbon project both under the Gold Standard as a voluntary project (since June 2012) as well as under the UNFCCC as a CDM project (2013)

ADB is supporting the biogas and low carbon developments in Vietnam through several loan programs One of these is the QSEAP loan of 90 million USD supporting (among other components) the development of domestic biogas in through a loan arrangement for 20,000 digesters and additional support for another 20,000 digesters In June 2012, 26,000 digesters had already been constructed under the program A new development is the Low Carbon Agricultural Support Project (LCSAP), which Mr Hinh from the Agriculture Projects Management Board under MARD would present more on later

The ADB also supports biogas developments in other countries such as Bhutan (supporting the construction of 1,600 digesters) and the development of large scale biogas digesters

ADB’s Energy for All initiative (E4ALL) has very actively supported SNV and the domestic biogas sector

in Asia, with its Domestic Biogas Working Group being one of the most active working groups Mr Elbling said that based on one of the outcomes of last year’s workshop in Chengdu, China, fibreglass digesters (called composite model in Vietnam) are being demonstrated and monitored in Bangladesh and Nepal

Mr Elbling urged any participants who were not already members of the E4All initiative to join so that everybody could partner and work together towards the future development of the biogas sector

2.1.4 Address by Director of the National Biogas Program for the Animal Husbandry Sector in Vietnam

Dr Hoang Kim Giao, Advisor to the Minister of Agriculture & Rural Development (MARD) and Director

of the National Biogas Program (BP)

Mr Giao indicated that as a program director since 2009, he has seen the program growing over those years The biogas market development has been based upon a few strong pillars like national and local promotion, capacity building of mason enterprises and technicians, a quality control mechanism and knowledge exchange Furthermore these developments have been the result

of successful cooperation between MARD, its relevant departments, the Biogas Project Management Unit (PMU) and SNV

He recognized that it is not always easy to develop a sector as local raising takes time, not only with farmers, but also with leaders Not all people are immediately fully committed, and changing circumstances often mean that SMEs may have to withdraw from biogas construction activities (about 25%) Developing a market driven sector is easier said than done, so with current dependence on subsidy mechanisms and strong support from third parties, a real change of heart and mind would be necessary to make this work

awareness-Mr Giao said that climate change and epidemics are a serious issue for Vietnam and the animal husbandry sector In the year 2013, 14 serious storms hit Vietnam, with serious impacts on the livelihoods of many Biogas technology is a way of avoiding greenhouse gas emissions and addressing climate change issues

As the program looks back at 10 very successful years, Mr Giao expressed confidence that there are many, even more successful years to come He wished all participants a very enjoyable workshop, with lots of learning moments and knowledge exchange, and hoped they would not forget to also enjoy Hanoi and Vietnam while they were here

2.1.5 Opening remarks from SNV – The evolution of the Biogas Program and the cooperation

in Vietnam 2003-2013 (including launch of the Jubilee Book)

Miguel Méndez, Country Director, SNV Vietnam

Mr Mendez indicated to be proud to see so many people from so many different countries had travelled to the workshop, from far and nearby, to share knowledge and to network on the topic of biogas There was so much interest as more than 200 participants tried to register

SNV is currently active in the field of domestic biogas

in 20 countries worldwide, with many of these programs having been built upon the lessons learned in Nepal and Vietnam, the first countries with nationally embedded biogas programs The program is celebrating its 10 year anniversary this year – 10 years with many victories and accomplishments but of course also with difficulties Mr Miguel expressed the gratitude

of SNV and the BP for the long term vision, support, close cooperation and flexibility of DGIS – the Netherlands Government He also thanked MARD for having contributed so strongly to the cooperation and success of biogas development

In 2012, BP was finally registered as a carbon credit program, and is now “officially” acknowledged for the emission reductions it accomplishes each year Over 90,000 of the 140,000 plants built under the

program have been registered in a Gold Standard project and the first issuance of credits took place in the first quarter of 2013

To capture all the milestones as well as to acknowledge all the great people that worked for or with the program, the PMU published a 10-year Jubilee book to share with the world Mr Mendez officially presented the first copy of the book to Mr Long of ICD-MARD to thank MARD for the great cooperation, and to thank all MARD directors and supporters for their support during the last 10 years, and the years

to come

2.2.1 10 years of the Biogas Program for the Animal Husbandry Sector in Vietnam: The

results so far

Ms Nguyen Thi Minh Nguyet, National Biogas Program

Ms Nguyet introduced the movie documenting the achievements of the Biogas program for the animal husbandry sector in Vietnam The movie can be found here: http://www.youtube.com/watch?v=BZIe8gupyuk&feature=youtu.be

2.2.2 Opportunities and Challenges in the way forward with the National Biogas Program

Biogas in Vietnam Phase 3

Ms Dagmar Zwebe, SNV Vietnam

Ms Zwebe provided background information on the animal husbandry sector in Vietnam So far biogas has reached less than 3% of an estimated total amount of over 6.3 million farming households Despite the fact that already

an estimated 500,000 digesters have been installed in Vietnam, the untapped potential is still very large With regard to medium scale biogas, to date less than 0.5% of the total population has installed a biogas digester

The biogas program in Vietnam is the result of a close cooperation between SNV and the Ministry of Agriculture and Rural development The aim of this program is to create a commercially viable biogas market, supporting development of a sector that can operate independently So far 30% of the market is already operating without support of the program, a sign that the program is reaching its goal

The program has installed more than 140,000 biogas digesters in 53 provinces, thereby providing a clean, affordable source of renewable energy to over 600,000 people The program has received various prestigious international awards and since February 2013 it has been receiving tradable voluntary emission reduction certificates (VERs) After 10 years it was time for some change and innovation, so for this reason the third phase of the project has started

In the final phase of the project, from 2013-2017 the cooperation between MARD and SNV will continue, financially supported by Energizing Development (EnDev) The final phase will focus on results based finance in order to further stimulate market development, accelerate market growth and overcome market barriers for biogas mason enterprises (BMEs) These BMEs will have more responsibilities as the program reduces costs and phase out subsidies for end users The core activities that will be executed

in the final phase are setting up sustainable training and quality control systems, incorporating additional biogas models and improving access to microfinance for end users

Ms Zwebe indicated that SNV is also further pursuing the market introduction of medium scale plug flow digesters in Vietnam

2.2.3 ADB’s support to the Vietnam Biogas Sector

Biogas activities in the ADB's financed Low Carbon Agricultural Support Project

MSc Nguyen The Hinh, Vice-Director General / Director of Low Carbon Agriculture Support Project,

APMB, MARD

The Asian Development Bank has signed a $74 million loan agreement with Vietnam to develop sustainable, climate friendly agriculture with low carbon emissions and smart utilization of farm wastes for income generation The project will be implemented in ten provinces in Vietnam, and has four focal points:

- Comprehensive livestock waste management

- Credit line for biogas value chains

- Technology transfer with regard to climate-smart agricultural waste management practices

- Project management

Mr Hinh highlighted the importance of end user training because of the potential environmental impacts of not using the biogas and bioslurry in the correct way If biogas is vented it can contribute to greenhouse gas emissions, and discharging bioslurry into drainage systems will result in water pollution He stressed the importance of using the gas in a productive way and the bioslurry as an organic fertilizer, activities which would result in savings and/or extra income In order to do this the correct technologies and markets need to become available Mr Hinh suggested that households could use the gas in many different appliances and share the gas with neighbours through a simple gas pipeline He identified the large potential for organic fertilizers but indicated that government support will be needed to make the transition from the current chemical fertilizers to organic fertilizers

In order to facilitate new technologies the LCASP project will provide demonstrations, and LCASP is currently also developing a database to register all the biogas plants in Vietnam

2.2.4 Medium Scale Biogas

An overview of local technologies being implemented

Ms Ho Thi Lan Huong, Institute of Energy and representative of the

Vietnam Biogas Association

Ms Huong said that the main renewable energy sources in Vietnam are hydro-power, biomass for cooking, biogas and solar for water heating According to Ms Huong one of the issues that impedes renewable energy developments in Vietnam is the subsidy for fossil fuels, resulting in low electricity prices which makes renewable energy sources uncompetitive Limited access to loans for renewable energy investments further complicates the situation

Ms Huong indicated that the potential for small scale biogas in Vietnam is 6.5 million households and for medium scale the total potential is 23,000 plants According to Ms Huong there are currently 1,000,000 small scale biogas plants, 500 medium scale and 150 industrial digesters have been constructed in Vietnam

Ms Huong further described the various medium scale technologies available: the fixed dome plant model from China, the plug flow design of the Institute of Energy and the KT31 design of Biogas Technology Centre Medium scale biogas could be used for animal heating purposes, cooking and to boil water It is also possible to convert the gas into electricity in order to power pumps, lights or motors The bioslurry could be used for cultivation, raising fish or to make compost for fertilizer

Ms Huong concluded that more attention still needs to be paid to quality management, training and promotion for medium scale biogas in Vietnam

time

2.3.1 Introduction and short description of the group assignments

In the parallel sessions four questions were discussed by groups formed on the basis of nationality The questions were:

1 What is does market-based mean and what is the role of government in a market-based sector?

2 As ODA and government subsidies decrease, what market mechanisms need to be developed to replace subsidies and stimulate the market?

3 What will be the essential features of a market-based quality control system and how can it work?

4 What are the issues that impede success of PPPs; how can the market optimize communications with government and overcome such issues in helping to drive future policy development?

Following the discussions each group presented their conclusions to the audience The responses were relatively similar despite the different national situations and experiences The main points for each country are listed below

2.3.2 Highlights from each country

Bangladesh

1 Relates to supply and demand, and there is a huge

difference between gas and electricity demand;

Traditionally Bangladesh renewable energy market is

supply driven with different donor/development partners

running lots of grants and subsidy programs

The government role is not effective as there is lack of

coordination among agencies/departments and lack of

policies or consistency re waste management and

renewable energy promotion

2 Subsidy for biogas installation in Bangladesh has increased

recently by 50%, difficult to change due to high subsidies

on traditional energy alternatives

Market mechanisms should include awareness raising and more coordination among stakeholders, including government departments/agencies; Introduce more fi’s to this sector; More R&D, cost benefit demonstration and rationalization of energy costs

3 Bangladesh not market based yet and project prioritization based on market demand Government should play as facilitator for an enabling environment to promote the biogas value chain

4 PPP policy yet to be finalized - Difference between existing policies and practices; Lack of coordination among the institutions

Overcome through Advocacy to address issues; create pressure group to address this issues (BBDF can play a vital role)

Taskforce combining with different agencies to develop and implement policy about PPP

Bhutan

(Bhutan received applause for completing 900 biogas digesters)

1 Right now there is little demand from end users – it is still supply driven; Private sector means the biogas masons

We hope to develop into a demand driven system, so far no commercial biogas plant has been built

RGOB supports resource mobilization – everything is done by the government

2 Fossil fuels are still very cheap, heavily subsidized by India; If subsidies for fossil fuels would be removed biogas would have a very good chance; Right now we cannot start to think about removing the subsidy for biogas

3 Presently only done by department of livestock with support from SNV

4 No barriers, market is currently the main issue; Stimulus economy plan, reduce imports, encourage national energy production

2 Subsidies still required for stimulating the market

Carbon finance could replace ODA; More responsibility towards private sector; Strengthen capacity

of BCC is required

Program is important to enforce quality; Lobbying with the government for national budget allocation

3 Subsidy used to control the quality, without subsidy low quality plants will enter the market QC is most important so a clear monitoring procedure and database is needed In future government could provide funds for QC; BCC association could manage; Commercial verification service (part of costs

of building digesters); Appliances, import them in bulk by BCC’s

4 Open to investors and private sector that want to enter the market; Role of MFI’s more active

China

1 Supply and demand; demand from government for

energy security, environmental standards; demand from

farmers for clean energy, clean indoor air, environment

improvement, market prices of traditional fossil energy

Private sector – engaged in product development and

services, new technology, mass production and economies

of scale to cut down costs; fully market based system not

yet in place, sector still mainly led by government, market

has a role

Role of government: favourable policies; mid and long term

development plan; Formulate standards and market

regulations; Initial or limited financial assistance

2 End user financing (loan/credit for productive use of biogas and commercial use of bio slurry); Value chain extension to high value use of biogas, such as vehicle fuel, and feed into natural gas pipelines after upgrading; Chemical fertilizer and fuels have become more expensive, this helps biogas

3 Standardization of biogas projects, testing, monitoring and technology; Quality supervision authorities and third party certification institutions, minimum technical requirements

4 Establishment of after sales biogas service network; Learn from other countries

India

1 Barriers to commercialization – High prices (domestic biogas system); Subsidies and support from government of India programs; Inadequate capacity of quality construction masons and suppliers; Inadequate implementation of quality standards; System for certification of masons is absent Role of government: reduce fossil fuel subsidies; training & certification of technicians/construction masons; Develop standards for biogas value chain; we expect a slow change toward pure commercial biogas market (for small systems)

2 Market mechanisms – micro finance: Enhance role for banks and government (loan guarantee by government); Pay for use, role by service providers, gas supply to domestic users, comparable to energy service company; Community system is an option

3 Quality of raw materials is a challenge in India - Web based quality control system can assist effective support but private sector needs to be committed to quality

4 South-South cooperation (IFAD success story); Technology commercialization trust fund/incubation support to entrepreneurs; Promote appropriate role for self-help groups or community based biogas groups

Indonesia

1 Create supply and demand; Supply high quality digesters;

Demand from end users

Government - Encourage households to buy biogas, build

awareness

2 MFI’s are required; it can come from the rural bank; Easy

credit with low interest; After sales services

3 Standardization of biogas; Technical support, compete for

better quality and better service

4 Subsidy from government; Government must allocate fund

for promoting biogas and support biogas constructor

Nepal:

1 120 construction companies are active

Access to technology solutions for users – supply of digesters and related products and services including financial services to end users Lead role is for the private sector, dependent on the stage

of development

Role of the government: as the market develops their role will decrease; Subsidies should be used

in a smart way; Technical support when and where it is needed; Bring regulations and policies, be a facilitator and protect consumer rights

2 Risk of collapse of the market Government should increase level of income of people, and then subsidy is less needed; Subsidy should only be available for the poorest people, at a higher level; Technical and other support may still be needed

3 There should be systems and standards for products and services; regulations and policies for quality control; Testing and certification systems in the country; Capacity building; Developing physical infrastructure; Harmonization with international standards

4 Develop space for regular dialogue and understand the role of each party; Clear cut leadership, private sector should take leading role; Regular dialogue forums

Pakistan

1 Around 6000 plants, potential of around 3 million

Private construction companies are trained, so far no real demand from

farmer side, mainly government and NGO driven;

Efforts underway to link with MFI’s; Bio slurry research being conducted

with universities and research institutes

Biogas appliances are being developed

Government role: planning to install 100,000 biogas plants, subsidy

25-50% depending on size of the plant; Combination of government subsidy,

MFI, farmer investment

2 Government led innovation framework - Major government intervention

to kick start the biogas market sector

Project cost 300 million with payback one year through energy savings

and training of 5000 plus masons and 2000 technical supervisors

Social mobilization; Awareness/advocacy; Environmental issues; Partnerships of international successful organizations

Capacity building/skill development

Networking with other stakeholders; notifying standards of training, certification and quality control

Africa

In Zimbabwe the biogas program is still very young, with only 9 digesters built

1 Customers and suppliers who act freely and can agree on prices, customers can choose from various suppliers

Role of government: legislation and policy to protect customers and suppliers, standards and QC enforcement, create enabling environment for suppliers; Possible duty exemptions

2 Purpose is to create demand from the market mechanism – can be seen as promotion or incentive

It also serves to enable quality control and can be used to manage risk; when the market matures market forces will take over but now we must invest in the market because it is new; Customers are made aware of QC issues and they will enforce them themselves

3 Training, standards, certification, after sales; Reputation of masons,

4 Private players may be more interested in profit than partnership while Government is too much led

by politics; NGO’s can be driven by sexiness of issues, but are not aware enough of issues on the ground; Government likes to talk about private sector but does not want to let them in

If there is genuine demand for the product, and if suppliers can provide quality products at affordable prices the dialogue will follow naturally

3 Quality issue is there, but not for government or for NGO’s We are concerned about our profile and reputation, we give three year guarantee, we have a maintenance and after sales service policies Government was supportive but wanted to set criteria - four registered enterprises

MARD agreed to have an independent company to develop and institutionalize the biogas sector

4 Laws regulations and policies have to be further developed - Different areas are very different Enforcement, how do you enforce the laws and regulations and make it transparent All the basics are there, how it will be done depends on the next phase There is a clear shift from project implementation towards a long term strategy which we call value chain development

Vietnam 2

1 Biogas in Vietnam is already partly market based There are still some issues why we need government and NGO involvement

Four stakeholders, government, private actors, NGO’s, end users

Have to follow the regulations of the government Slowly need to phase out subsidy, from direct subsidy to support with training, technology and different services from the private sector Stimulate and have good promotion for the private sector for all services

2 MARD has four projects related to biogas, from different financial partners with different subsidies SNV provides Government should set the direction that direct subsidy needs to be phased out and focus more on indirect support

Need to strengthen private sector in form of capacity and service – could replace subsidy between 10-30%, with bank loan, but now the interest is still very high Good communication about benefits

is required, also the end users need better information about the various models

3 QC not always easy, also not if it is done by the government or even if it is done by the biogas association Government has to set up clear policy and regulation and in the near future should set

up a law with minimum standards for biogas digesters

Strengthen capacity building for VBA which could have very important role Database is required, right now there are different programs but we cannot analyse the data and there is no standard M&E system

4 PPP for biogas is very new, government does not have much experience Also there is no regulation how to deal with PPP We would like to learn more from different countries how they address public private partnerships

5 What are the issues that impede success of PPPs; how can the market optimize

communications with government and overcome such issues in helping to drive future

For each of the questions posed, the prevailing views were as follows

1 Market-based means that supply and demand are the determining factors, with suppliers providing

a choice of quality products and services to end-users who want clean energy at a competitive price The role of government should be to ensure policies support good environmental and economic outcomes; to promote awareness among end-users and encourage uptake; and to ensure quality through mason and technician training and certification

2 Market mechanisms to replace subsidies and stimulate the market may include: the promotion of the real savings generated through biogas plants with accessible cost-benefit analysis information; removal of subsidies on fossil fuels and replacement of biogas subsidies with carbon financing; and supporting easy access, low interest financing options

3 A market-based quality control system should include documented international-level quality standards, certification and monitoring and must address materials, construction/installation and appliances and provide warranties It should be government funded but industry/association managed via monitoring/evaluation/reporting database

4 The success of PPPs is limited by lack of appropriate policies and the fact that different groups have different drivers – political (Government) vs profit (Private sector) vs appeal (NGOs)

Market-government communications and future policy development should be addressed by setting

up a joint multi-agency (government) and private sector policy development taskforce and ensuring implementation is a private sector responsibility while Government is only involved with policy Support should be provided to entrepreneurs for technology commercialization, and accountable after sales service should be ensured

3 Day 2 – 27th November 2013 – Field visits

3.1 Domestic Biogas Program

This farm is a great example of the benefits that biogas brings According to the household, neighbours and extended family often come to eat the food which is cooked on the biogas stove The pigs live in a clean stable as the household now has an improved manure management system The bioslurry is used for both the large fishponds and for the vegetable garden on the property Because the garden is some distance from the location of the stable and digester a PVC pipe has been installed to transport the slurry

to a second slurry pit, from where it is applied to the vegetable garden with a pump and a hose This household is a perfect example of the closed loop system that is possible with biogas technology

The factsheet of this field visit can be found in Annex 1

3.2 Hung Vuong Composite Company

Hung Vuong Composite Company is one of the leading Composite Model Biogas digester (also called

“fiberglass model) producers and suppliers in Vietnam The founder started his career in the biogas

sector as a trained and certified mason of the Domestic Biogas Program and developed his company into

what it is today Hung Vuong doesn’t only make and sell the composite model, but is also one of the

suppliers of biogas appliances in Vietnam During the visit to this factory the workshop participants could

observe the production process of the composite biogas digester – and especially the differences with

the production methods observed in China a year ago – and could see, try and learn more about the

most common appliances in Vietnam

3.3 Medium scale brick biogas installation

This is a medium-sized farm with about 400 pigs serviced by a biogas plant with 200m3 capacity While the plant has only been installed for a little over a year and fully functioning for less time than that, the farmer is already looking into expanding the construction Prior to installing the plant there was a significant animal waste problem, and permission to expand the farm was denied until the waste problem was properly dealt with However, the digester has enabled very effective waste management, and so the farmer now wants to increase both the number of pigs stocked and the digester capacity so that a greater quantity of waste can be processed Conveniently, the design of the biogas plant is such that it can be relatively easily enlarged as stock increases simply by building additional tanks The gas generated is used for cooking and to generate electricity which is used to run the pump which delivers bioslurry to fish ponds and fields

The factsheet of this field visit can be found in Annex 2

4 Day 3 – 28th November 2013

4.1 Plenary Session: Financial mechanisms, opportunities and

incentives

4.1.1 NAMA developments for Biogas in Vietnam – What can this practically mean for Vietnam and

the Vietnamese private sector?

Mr Nguyen Trong Hung, DMHCC, Division of GHG Emission Monitoring and Low Carbon Economy,

Vietnam

In 2011 the Prime Minister of Vietnam presented the national strategy response to climate change which addressed three goals:

 Reduce intensity of GHG emissions by 8-10%

 Reduce energy consumption per unit of GDP by 1-1.5% per year

 Reduce GHG emissions from energy activities by 10-20%

A national greenhouse gas inventory has been made for Vietnam The sectors with the most emissions will be addressed with mitigation options: agriculture and LULUCF Currently the first steps to develop the biogas NAMA are under preparation

Even though Vietnam has a high potential for developing a NAMA on biogas there are also many challenges that need to be addressed The main challenges are related to a lack of a clear defined concept on NAMAs, public awareness and institutional capacity

4.1.2 Results Based Financing – What does it mean for project implementation and management

Mr Marco Huels, Energy Advisor, EnDev Program, GIZ, Germany

The purpose of Results Based Finance is to move from up-front subsidies to

conditional payments for pre-agreed, verifiable results This helps to shift

risks from donors to market actors

The basic characteristics of RBF are:

 No upfront payments, only ex-post after verification of delivery: no

delivery, no payment; risk entirely at private sector

 Provides temporary incentives to overcome market failures, trigger

market growth: only nascent markets with growth potential and no other

constraints

 Private sector chooses own business models but safeguards are set for

quality and sustainability

 RBF will require a mind shift where the market sets the price while the private sector decides whether

or not it requires technical assistance and bears the full risk of implementation

In order for RBF to work the capacity of the private actors has to be sufficient and there needs to be a strong financial sector If these preconditions are not met RBF will not work and the classical pre-financed

TA approach will work better

RBF is very complicated; it involves many intermediaries and a lot of checks and balances between sectors If you want to set up RBF properly you need to have many monitoring and evaluation services

in place

4.1.3 Carbon Markets – What does the future hold?

Ms Annyta Luo Qun, Technical Expert, Gold Standard Foundation, China

The CER price is very low now, less than $1 per ton; the market is not bankrupt but the price is terrible However, the voluntary carbon market is very different from the compliance market with the average price of a VER quite stable at around $6 per ton VERs only occupy a very tiny part of entire carbon market, and there are a number of different standards in this voluntary market

The best prices are paid for gold standard VER’s Previously only renewable energy and energy efficiency were allowed under the Gold Standard, but now LULUCF has been included If we can base the future

on the past we see continued growth in the VGS market which is expected to be $2.3 billion by 2020 Credits are bought by companies such as DHL, KLM and Lenovo Coca Cola has bought credits to offset their carbon emissions and increase social capital These purchases are based on CSR objectives which are the main reason companies decide to buy VGS credits

Gold Standard not only looks at reduced emissions but also includes things as air, water and soil quality (environment) while the project must also have a poverty impact With a very positive social development matrix, buyers are willing to pay more for credits Biogas scores high on this Sustainable Development matrix due to the many social benefits

Carbon finance helps biogas projects because it can reduce investment and operational barriers Monitoring carbon emissions can guarantee the operation of the biogas digester in the long term, and more than half of all biogas credits are in the voluntary scheme

4.2 Parallel Sessions

4.2.1 The roles and potential responsibilities of Biogas Associations and other private sector

initiatives

How can such initiatives be financially sustainable?

Facilitator: Ms Nguyen Thi To Uyen

1 Mr Keshav Goela -Principal Coordinator, Indian Biogas Association: Biogas in India – an Intense

Opportunity

 IBA was founded in 2011 and is now fast developing with the prime objective of

the association Propagating biogas in a

sustainable way IBA is facing many

challenges including Finance, Technical concerns, Social engineering, Costs, Policy issues, and Energy Management

 In the Indian Biogas scenario there is a scattered market which lacks an experienced and skilled workforce and has no established player at national level Supply chain management needs to be streamlined and more active government intervention is required In addition a different approach is needed for SME scale biogas plant promotion while there is insufficient promotion of organic crops

 The biggest project of IBA, Project Uniqueness: Bhitbhudrak model showed the importance of social engineering at village level along with technology to make biogas a success using simple and yet robust The 2500 meter pipeline in the village provides with a clean and consistent source of energy for cooking The project has improved economics of village; improved health and hygiene; provided smoke free atmosphere in kitchens; creates a cleaner environment in to village and empowers women

2 Mr M A Gofran, Consultant Biogas Program Bangladesh: Role of Biogas Associations in

Developing a Sustainable Market Driven Biogas Sector

 Some problems with existing bio-digesters include: unable to be moved if required; high cost of construction; takes 10-15 days to construct; dependent on skilled manpower; cannot install during monsoon; construction faults result in significant failure rates; and sub-soil water creates problem

 Challenges the BBDF is facing are: lack of policy; insufficient knowledge; lack of funds; shortage of manpower; inadequate R&D; high costs; negative attitudes; and lack of coordination

 Some solutions: Establish a common platform of stakeholders and experts at country level and country level; Draw attention of all towards the importance of biogas technology and need for these platforms; Identify best practices at home and abroad and share experiences; Identify and support local initiatives; Establish a central information centre and ensure availability; Negotiate sharing of internal and international resources to achieve common objectives

inter- Financial Sustainability of Associations will come from a combination of: Members’ contributions; 2 Sharing national budget; Sharing donors’ support; Sharing project costs

3 Mr Bishnu Belbase, Executive Director, Nepal Biogas Promotion Association: Roles &

Responsibilities of Nepal’s Biogas Private Sector and its Association

 NBPA is a Non-Government, Non-Profit Organization established in 1994 As the umbrella organization of private biogas construction companies and appliances manufacturing workshops There are 7 regional offices of NBPA and member companies cover all districts of the country building 25,000–30,000 new biogas plants annually

 Services to the members are: Biogas promotion to expand the market; Public relations, lobbying and

advocacy; Self-Regulation through Code of Conduct; Support on Quality management; Demand

based technical support & capacity development; Support to companies to import appliances or

accessories; and serving as the interface with government and the biogas program

 Main Focus Areas: The Code of Conduct (CoC) is for the establishment of healthy competition

between the companies; R&D; After Sale Service (ASS) and Supply of Appliances

 NBPA financing comes from membership and other sources as well as revenue from partnership in

program implementation

4 Ms Nguyen Thi To Uyen, Business Development Coordinator, VBA: About the Vietnam Biogas

Association

 The VBA was established in April 2011 and plays a role as the professional biogas association in Viet

Nam It represents enterprises, institutions and individuals; promotes the biogas sector to

government, business, industry and the community; provides networking, knowledge sharing and

skills development; and currently has 57 financial members

 Member benefits include a range of personal rights, professional development opportunities as well

as standards and certification:

 Factors that will support the financial sustainability of the VBA: build financial membership and to

increase revenue from fees; develop projects e.g surveys, new biogas models that might attract

funding; bid for contracts and tenders; participate in the CDM market; participate in the

environmental service market; and contribution from centres belonging to VBA

5 Summary

 Roles and responsibilities of Biogas Associations

1 Promote Public Private Partnerships, brokering links between government, enterprises and finance

providers;

2 Address specific objectives – quality standards, technology transfer, networking, shared learning

platforms;

3 Members should enjoy significant benefits over time from value-adding services provided; and

4 Promote regional platform for synergies amongst national biogas associations

 Financial sustainability for Biogas Associations

1 Become the valued service provider linking government and private sector entities;

2 Facilitate delivery of valued training, information dissemination and knowledge sharing

opportunities;

3 Secure commitment of stakeholders with paid, continually renewed membership;

4 Partner with donors to facilitate program delivery

4.2.2 Micro-scale Biogas Solutions – What are the current developments?

1 Micro-scale Biogas Solutions in Vietnam – Ms Ho Thi Lan Huong –Institute of Energy; Vietnam

Biogas Association

Challenge: Target poorer households with low demand for biogas for cooking and lighting; Ability

to pay is low

Solution: Micro-biodigester + Material for construction / installation + Low investment + Simple in

operation and maintenance + Multi-substrate as feeding material

Technologies (R&D phase):

 Plug-flow with biofilm digester (4 cm); PVC or composite; Substrate can be waste water from livestock or food processing

 FOV model (1-2 cm); Rubber, technical canvas/cloth; Food waste/kitchen waste + Piece of vegetable, roots, fruits

 Localize FOV model (1 cm); hard plastic; food waste and pig manure

2 Innovation in Cambodia – Mr Eric Buysman, SNV Cambodia

National biogas program is increasingly reaching the poorer farmers

 There is a trickle-down effect

 Average volume is decreasing (6.3 m3 in 2006 to 4.7 m3 in 2012

More scope for smaller plants

 Low plant utilization ratio (~50 to 75%)

Main design criteria

 Small(er) (2,3 and 4 m3) for daily feeding of 10 to 40 kg/day

 40 days HRT

 More affordable than current design

 Durable (lifespan over 10 years)

Technologies (R&D phase): pre-fabricated reinforce concrete rings (RCF) floating drum and manhole; and plastic bag biodigesters

3 Micro-scale Biogas Solutions in India – Mr Choppalli Venkata Krishna, Creat, India

Models being installed are:

 Swati 2 in 1 Model Fixed Dome Biogas Plant (1 & 2 m3/day size)

 Gareeb Bandhu (Pro Poor) Fixed Dome Biogas Plant (Pre-fabricated reinforced concrete rings) Micro-scale designs have been conceived to generate gas starting with 18 kg dung per day as feed stock up to 50 kg dung per day

They are designed to be affordable to the poor, with greater ease of construction and quicker instruction All components are ready made, pre-tested and pre-cured eliminating all the possible errors a mason can make with on-site construction so they are cheaper than conventional designs and more functional, but are guaranteed for 5 years

4 FOV Biogas – Swedish Cleantech – Mr Fredrik Johansson, FOV Sweden

Technology: Bag biodigester industrially prefabricated of advanced materials in Sweden

 Lightweight and foldable

 Durable and of high quality

 Highest Quality Cutting-edge reactor design ensuring uninterrupted production

 Supported by local service providers

 Installation, optimization and maintenance by local experts

 Unique Scalability

 Customizable with different sizes and scale-up scenarios

 Cost Effectiveness

 Quick & easy installation = 1 day

 Durability > 10 years with reliable gas production and payback time < 3 - 5 years

 Household Reactor: Do-it-yourself kit available

 www.fovbiogas.com

Summary

 Focus is on more affordable and appropriate technology for poorer households