Volume 1: Renewable Energy Policy

 Solar rooftop (Phase 1) for residential sector 100  Solar rooftop (Phase 1) for commercial/industrial sector 100 (already fully subscribed)  Solar rooftop (Phase 2) for own consumption 100  Solar farms developed by government agencies or 800 agricultural cooperatives 36Biomass  Biomass power projects in 4 southern provinces 10Biogas  Waste/Wastewater-based power projects in 4 southern provincesSource: ERCCompetitive bidding: The competitive bidding process was introduced in 2015. This is applicablefor AE projects in the power sector except solar projects, for which a different set of procedure andcriteria apply. For all non-solar AE project (e.g., wind, hydropower, bioenergy, etc.), the developermust follow the competitive bidding procedures and regulations issued by the ERC.In general, project developers who quote low selling prices have a higher possibility of beinggranted quota in that area, providing that the grid capacity in that area is sufficient. The sellingprice must be quoted by specifying a percentage reduction of the fixed FIT (see column 2 of Table22 and column 2 of Table 23). The feeder capacity is firstly allocated to the project with thehighest percentage of price reduction (lowest fixed FIT). After the first allocation, if the feedercapacity is still sufficient, the remaining capacity will be allocated to the runner-up project in thesame area (project with the second highest percentage of cost reduction). This process continuesuntil the feeder capacity is fully subscribed or the overall quota is fully allocated.Financial Incentives for RE ProjectsThe Energy Conservation Fund (ENCON Fund) was established under the framework of theEnergy Conservation Act 1992. The purpose of this fund is to provide financial support to theintroduction and promotion of AE and EE&C technologies. Under the ENCON Fund, there arethree major EE financial programs, namely tax incentives, the Energy Service Company RevolvingFund (ESCO Fund), and the Energy Efficiency Revolving Fund (EERF). The ENCON Fundprovides capital to these three programs.The fund was built from levies on petroleum products (0.07 THB/liter for kerosene and fuel oil,and 0.25 THB/liter for gasoline, gasohol, diesel oil and biodiesel B5). As planned, in 2016, a totalof 10.152 billion THB (292 million USD) is allocated by the fund to 149 projects, of which 1.855billion THB (53 million USD) is for AE projects, and the remaining fund is for EE projects andpolicy development.Soft loan:Launched in January 2003, the EERFhas provided soft loans to promote and pushinvestments in RE projects, and to increase the confidence of financial institutions in lending toREproject investors. The Fund is managed by DEDE. A maximum of 50 million THB (1.43 millionUSD) with low interest rate of 4% per annum is lent to each project for a duration of 7 years.EERF financing schemeended in 2012. However, local commercial banks continue to offer loansfor RE projects through the open market mechanism.Investment grants: The investment grants are provided by the ENCON Fund to encourageinvestments in biogas, MSW and solar thermal projects. Investor can apply to get an investmentgrant for design, consultants and partial investment under this scheme. The maximum invesmentgrant is 20-50% of capital invesment for biogas, 25-100% for MSW, and 30% for solar thermal 99

(hot water) project, with a maximum capital grant of 50 million THB (1.43 million USD) perproject.Fiscal Incentives for RE ProjectsThe Announcement No. 2 (Year 2010) of the Board of Investment (BOI) introduced severalinvestment promotion instruments for sustainable development industry activities. EE and AE areconsidered as priority activities under this BOI announcement. Therefore, in the implementation ofsuch activities, the following incentives are provided:  CIT exemption and reduction: an exemption of CIT for 8 years is provided for the generation of RE, and the manufacturing of RE equipment and machinery. Additionally, for another five years (the 9th through 13th), the BOI will also provide a 50% reduction of CIT on the profit generated from the investment;  ID&T exemption and reduction: import duty and tax are exempted for imported equipment;  Other incentives: double deduction for transportation, electricity and water supply costs for 10 years, and deduction of infrastructure installation and construction cost from net profit in addition to normal depreciation.Mandatory Grid Access and Prioritized DispatchMandatory grid access: Most AE power plants in Thailand are operated as “non-firm” SPP orVSPP. Therefore, there is no obligation for the power plant to ensure that certain power isgenerated at certain time. The power utilities, on other hand, are obliged to purchase all electricityproduced from such power plants. This makes operating and managing the power grid by powerutilities more complex. As mentioned earlier, the government is trying to assist the power utilitiesby introducing the concept of “SPP hybrid” which aims at using multiple RE resources withenergy storage system to ensure more dependable of AE power plant. It is expected that this canchange “non-firm” power plant to “firm” power plant. Currently, this concept is still under publicconsultation process.The Electricity Generating Authority of Thailand (EGAT) has assessed the ability of thetransmission line to support AEDP2015 by using annual data from its power stations. The resultindicated that there are some grid limits to support the absorption of electricity from RE in 2015-2024 period. However, the capacity of the grid shall be boosted to make sure it can absorb all theelectricity from RE by year 2024 onwards.Grid code: Power utilities at transmission level (EGAT) and at distribution level (PEA and MEA)are responsible to develop a grid code (transmission/distribution codes) to define the technicalrequirements in connecting, using, and operating the grid in the areas under their responsibility.Currently, a joint task force has been established to discuss and develop a grid code thataccommodate certain requirements to integrate variable RE (VRE) into the system.Other RE Policy MeasuresSupport to educational and R&D activities:The ENCON fund remains a main financial source forresearch and development activities in the field of AE. Apart from that, all power utilities haveallocated some budget for R&D activities in the field of AE utilization in the power system. 100

DEDE has promoted the use of hybrid solar hot water system. The use of solar collector combinedwith the waste heat recovery system was promoted. Technical support is provided (e.g., sitesurvey, development of feasibility study, basic design and engineering, etc.). It is reported that theproject enabled 47,686 m2 of solar collector to be installed. Similarly, the solar drying system hasbeen promoted by DEDE. Technical standards and equipment are developed by the DEDE forsuch systems to assist developers to procure a system with good quality. As a result, 284 solardrying systems were installed169. This is equivalent to 35,131 m2.Support to knowledge development and capacity building: DEDE is providing support forknowledge development and capacity building in the RE sector. The DEDE’s Bureau of HumanResource Development (BEHRD) is responsible for setting action plans and providing training forhuman resource development in the fields of ARE. The Alternative Energy and EfficiencyInformation Center, another division of DEDE, provides support for surveying, studying,analyzing, administrating and disseminating information on ARE.Under the AEDP 2015, the GOT has allocated funds for implementing the plan on awarenesscreation, knowledge development and capacity building in the field of AE and RE until 2036. Theplan includes (i) development of RE databases and information management systems, (ii)publication of information and statistical data on RE, (iii) capacity building both in theory andpractice for utilization of RE, and (iv) development of RE and its related networks and encouragethe participation of the whole network both at national and international levels.Support for local service providers/ESCO: The Government of Thailand (GOT) via the E for EFoundation and the Energy Conservation Foundation of Thailand (ECFT) is using several supportprograms and schemes to promote ESCO investments in the RE sector. The ESCO Fund wasestablished in 2008 by DEDE with the objective to encourage investment in AE and EE&Cprojects. Currently, the ESCO Fund is in its 4th phase (April 2015 - March 2017). In FY 2015170,500 million THB (14.4 million USD) were provided to the E for E Foundation (300 million THB)and to the ECFT (200 million THB) to support RE and EE projects, including those implementedby ESCOs.The fund is used for the following activities: equity investment, equipment leasing, ESCO venturecapital, GHG project facility, credit guarantee facility, and technical assistance. These includeequity investment, support for equipment leasing, and credit guarantee facility (see Table 41).Table 41: Incentives for the promotion of ESCO investments in RE sector in Thailand Program Objective Size of investment and interest PeriodEquity Investments in  10-50% of total investment cost 5-7 yearsinvestment RE projects  Not as a majority shareholder  Limited to 50 million THB per project 5 yearsEquipment Long-term  Return: annual dividend in the proportion of investmentleasing leasing service  Support for 100% equipment cost Not more in purchasing  Limited to 10 million THB per project than 5Credit equipment for  Interest rate of 4% per annumguarantee RE projects Guarantee  Depending on the project risk commercial169 DEDE (2016). Annual Report 2015170In Thailand, fiscal year (FY) starts on 1 October of previous calendar and concludes on 30 September 101

facility bank for project  Limited to 10 million THB per project years loans  Project owner will be charged at 1.75% per annum of guarantee amountSource: Energy for Environment Foundation6.1.5 VietnamBased on the reports of the Ministry of Industry and Trade (MOIT) and the Electricity of VietnamGroup (EVN), the total installed generating capacity of the country increased by 13.6% from34,080 MW in December 2014 to around 38,716 MW in December 2015. As shown in Figure 14,fossil fuels (coal, natural gas and oil) made up the largest share (56.2%), followed by large-scalehydropower (>30 MW) with 37.6%, and RE-based power with 6.2%. Wind, 0.35% Solar, 0.01% Biomass, 0.24% Small hydro, 5.62% Large hydro, Fossil fuels, 37.57% 56.21% Figure 14: Power generating capacity mix in Vietnam (Dec 2015)RE Potential, Utilization Targets and PlanningVietnam has a substantial potential for power generation from RE. The total potential capacity ofRE in Vietnam is estimated at 51.11 GW, of which 27.75 GW (54.3%) are from wind power, 13GW (25.4%) from solar, 7.2 GW (14.1%) from small hydropower (<30 MW), 2.82GW (5.5%)from biomass and municipal solid waste (MSW), and 0.34 GW (0.7%) from geothermal171.According to the National Power Development Plan (NPDP) for the 2011-2020 period with avision to 2030 (PDP VII)172, the amount of electricity generated from RE sources will be around42 TWh/year, accounting for 6% of total annual electricity generation in 2030. The revised NPDP(PDP VII-revised) promulgated by the Prime Minister of Vietnam (PMVN) in 2016173 has reducedthe total electricity demand projection for 2030 from 695 to 572 TWh/year. However, the targetfor electricity generation from RE sources (excluding large-scale and pumped-storage hydropowerplants) was increased from 42 TWh/year to around 61 TWh/year, making up 10.7% of totalelectricity generated and imported in 2030. Solar power will account for 3.3% of the totalelectricity generation and import, followed by small hydropower (3.2%), wind power (2.1%), and171 ADB (2016)172 Decision 37/2011/QD-TTg (14/6/2011)173 Decision 428/QD-TTg (18/3/2016) 102

biomass and MSW (2.1%).By 2030, the installed capacity from wind and solar power is planned toreach 6,000 MW and 12,000 MW respectively. These targets are ambitious as an average of 430MW of wind power capacity and 850 MW of solar power capacity have to be added to the nationalpower system every year until 2030.The targets for RE use for heat generation were set in the National Renewable EnergyDevelopment Strategy up to 2030 with a vision to 2050 issued in November 2015174. Under thisstrategy, by 2030, 16.8 Mtoe of heat demand (14% of country final energy consumption) shall begenerated from biomass sources, and 3.1 Mtoe (2.6%) from solar energy. Biofuels produced frombiomass sources will contribute 6.4 Mtoe (5.3%) to the final energy consumption.Table 42: Potential, target and actual installed capacity of RE sources in VietnamNo. Type of RE Potential (GW) 2030 target Actual installed (GW) capacity by Dec 1. Wind power 27.75 2. Solar power 13.00 6.00 2015 (GW) 3. Small hydropower (≤30 MW) 7.20 12.00 0.135 4. Biomass (including MSW) 2.82 3.35 0.004 5. Geothermal 0.34 2.00 2.177 51.11 0.091 Total - -Source: ADB (2016) and ACE (2016) 23.35 2.407As per Table 42, by the end of 2015, only 2.407 GW of RE-based power capacity were installedwhich accounted for 10.3% of the 2030 target or 4.7% of the total RE potential. The smallhydropower plants have a combined installed capacity of 2.177 GW (90.4% of total RE-basedinstalled power capacity), followed by wind power with 0.135 GW175 (5.6%), biomass-basedpower (from the sugar mills) with 0.089 GW (3.7%), solar power (0.004 GW) and MSW (0.002GW).RE Price-based PoliciesFeed-in tariff and SPPA: The main policy instruments currently used for the promotion of RE inVietnam are FITs and the standardized Power Purchase Agreements (SPPAs) for grid-connectedRE-based power projects. Five FITs and SPPAs are in place, for small HPPs (< 30 MW)176, forwindpower177, for solid waste-based power178, for biomass-based cogeneration and powergeneration projects179, and for solar power projects180.The FITs are set on the basis of the avoided costs on the national power system when electricity isgenerated for the distribution power grid from the substitute RE-based power plants. Excepthydropower projects, the FITs for other RE sources were set in USD/kWh. The payment (VAT-included) will be processed monthly in VND which is calculated by using the VND/USD174 Decision 2068/QD-TTg (2015)175 Tuy Phong (30 MW), Phu Quy (6 MW), and Bac lieu (99.2 MW)176 Decision 18/2008/QD-BCT (2008), Circular 32/2014/TT-BCT (2014), Decision 12086/QD-BCT (2014), Decision14579/QD-BCT (2015) and Circular 06/2016/TT-BCT (2016)177 Decision 37/2011/QD-TTg (2011) and Circular 32/2012/TT-BCT (2012)178 Decision 31/2014/QD-TTg (2014) and Circular 32/2015/TT-BCT (2015)179 Decision 24/2014/QD-TTg (2014), Circular 44/2015/TT-BCT (2015) and Decision 942/QD-BCT (2016)180 Decision 11/2017/QD-TTg (2017) 103

exchange rate (selling rate) of the Vietnam Foreign Trade Bank at the time of payment. The FITsfor different types of RE-based power projects are summarized in Table 43.Table 43: FITs for grid-connected RE-based power projects in Vietnam Type of RE sources FITs (VAT-excluded) VND/kWh USD/kWh181Hydropower (≤30 MW) Tariff for electricity sales182 605 - 652 0.02689 - 0.02898 Tariff for capacity sales 2,242 0.09964 Tariff for surplus electricity sales (compared to contracted amount) 310 - 326 0.01378 - 0.01449Wind power 1,755 0.078Biomass-based cogeneration (for excess electricity) 1,305 0.058Biomass-based power generation 1,700 0.075551 For North region 1,653 0.073458 For Central region 1,684 0.074846 For South regionSolid wastes (Garbage) 2,261 0.1005 For direct combustion of wastes 1,638 0.0728 For landfill gas capture for power generation 2,086 0.0927Solar PV (except solar rooftop systems)Source: MOIT website (2017)The introduction of FIT and SPPA for small RE-based power projects in 2008 seems to have hadan impact on the development of small hydropower projects. Although the FIT, based on avoidedcost, was low183, the incentives (tax exemption/reduction, VAT refund, etc.) and other preferentialtreatments offered by the Government of Vietnam (GOV) for the projects implemented in areaswith difficult socio-economic conditions (e.g.,, the remote and mountainous areas) have stimulatedthe investments in small hydropower projects.The regulations promulgated in 2011 on FIT and in 2012 on the SPPA for wind power projectshave had a limited impact on their development because of low FIT offered by the GOV. Theanalysis conducted by the ASEAN Center for Energy (ACE) in 2016 showed that the main driversfor the implementation of the three operating wind power plants were: the access of low-interest loans from the Vietnam Development Bank (VDB) and from the Export-Import Bank of the United States for the 99.2 MW plant in Bac Lieu, and higher tariffs, i.e., 0.13 USD/kWh specifically applied for the 6 MW wind power project in Phu Quy Island and 0.98 USD/kWh for the 99.2 MW offshore wind power plant.The wind power producers, both local and foreign investors, are considering that the current FIT isnot sufficient for them to recover their investments. According to EuroCham, a FIT of at least0.115 USD/kWh is required for wind power projects in Vietnam184. The GOV is revising the FITto become more attractive to the wind power investors.181 1 USD = 22,500 VND, as of October 2016182 The tariff for electricity sales depends on time of use, season and region183 The FIT publicized in 2008 for small RE-based power projects was 403-483 VND/kWh (0.0236-0.0283 USD/kWh)for electricity sales and 1,674 VND/kWh (0.098 USD/kWh) for capacity sales based on the amount of electricity sold tothe grid in the peak hours during the dry season (from November 1 to June 30 of the following year). The calculatedyearly-average FIT is low (616-638 VND/kWh depending on region) compared to the average electricity retail tariff of871 VND/kWh (0.051 USD/kWh) in 2008.184http://www.vir.com.vn/low-feed-in-tariffs-deter-foreign-wind-power-investors.html 104

The introduction of FIT and SPPA for biomass-based cogeneration projects in 2014 aims at thepurchase of excess electricity from sugar mills. Before the introduction of FIT, only 6 out of 41operating sugar mills sold excess electricity to the grid185 from their cogeneration plants, with acombined capacity of 16 MW. The selling tariffs of electricity were low (0.04-0.05 USD/kWh)and the contracting period was short (1 to 3 years). The new FIT and SPPA offer a slightly higherselling tariffs of electricity (0.058 USD/kWh), but with a fixed contract term of 20 years.However, the offered FIT is considered unattractive for the sugar mills to invest in high-pressurecogeneration technology in order to sell more excess electricity to the grid.The late introduction of the policies (FITs and SPPAs) in 2015 and 2016 on the biomass-based andsolid waste-based power generation projects does not show any impact on the development ofthese types of RE. Their impact can only be assessed after 2 to 3 years, which are usually neededfor project development and implementation186.Reduced T&D costs: Under the existing regulatory framework, all costs associated with the gridconnection shall be borne by the power project investors. However, according to the 2015NREDS, in the future, the connection costs of the RE-based power plants shall be paid by theT&D power company.Other price-based policy measures: The development of other price-based policy measures suchas incentives for use of localally manufactured RE equipment, electricity tariff balancing, netmetering mechanism, etc. was planned in the 2015 NREDS. However, until now, no concretepolicy and regulatory framework on these measures is introduced.RE Quantity-based Policies and Procurement MechanismsRE quota obligation: According to the 2015 NREDS, Vietnam will issue a Renewable PortfolioStandard (RPS) for power generation and distribution entities. However, until now, no concretepolicy and regulatory framework on RPS has been introduced. The preliminary proposal is:  For a power generation entity that has a total installed capacity of more than 1,000 MW (excluding BOT-invested projects), the percentage of electricity generated from RE sources (excluding hydropower plants with an installed capacity of 30 MW or above) shall not be less than 3%, 10% and 20% in 2020, 2030 and 2050 respectively;  For a power distribution entity that generated and/or purchases electricity from RE sources, and for end-use customer who generates itself electricity from RE sources, the percentage shall not be less than 5%, 10% and 20% in 2020, 2030 and 2050 respectively;  MOIT shall determine, on an annual basis, the minimum percentage of electricity generated from RE sources for each of power generation and distribution entities.Financial Incentives for RE ProjectsFinancial subsidy: The Vietnam Environmental Protection Fund (VEPF) was established in 2002to support the implementation of the environment related projects. For the RE sector, VEPF isproviding financial support in the form of price subsidies for grid-connected wind power and CDM185 GIZ (2014)186 ACE (2016) 105

projects. For example, VEPF is providing a price subsidy of 0.01 USD/kWh to the EVN to buyelectricity generated from wind power projects187.Soft loans: In 2007, the GOV considered to establish an Energy Development Fund (EDF) tosupport the development of RE projects. The EDF intends to provide RE project developers withinvestment credits at favorable interest rate. However, this EDF is not established yet (ACE 2016).Capital subsidy: In 2015, the GOV planned to set up the Sustainable Energy Promotion Fund(SEPF) to support RE development188. The fund will be financed from the State Budget, revenuefrom environmental fees levied on fossil fuels, various sources of funds and contributions fromlocal and foreign organizations/individuals as well as from other funding sources. The SEPF willprovide the financial support to compensate the costs incurred by the power utilities on theinvestment in new or expanded power grids to connect with RE-based power sources, providedthat these costs are unable to be paid back from the power transmission fees. However, until now,the SEPF has not been set up yet.Fiscal Incentives for RE ProjectsAccelerated depreciation: The accelerated depreciation of fixed assets is among the financialincentives offered to RE-based power projects in Vietnam. The accelerated depreciation rate isallowed to be 1.5 to 2.5 times higher than the standard straight line depreciation rate.CIT exemption and reduction: According to the regulations and guidelines for the implementationof the Law on Corporate Income Tax189, the exemption and reduction of corporate income tax areapplied to the newly-established enterprises working on RE projects. Since the 1st of January 2016,these enterprises enjoy a preferential tax rate of 10% for 15 years from the first year of revenuegeneration instead of normal tax rate of 20%. Moreover, these enterprises enjoy additional taxincentives including tax exemption for 4 years after the enterprises first generates profits and 50%tax reduction for the 9 subsequent years.ID&T exemption and reduction: The RE-based power projects are exempted from import dutiesand taxes on imported goods that would become fixed assets of the project and goods used as rawmaterials, input or semi-finished products for the project operation that are not available on thelocal market. This is according to the Law on Import and Export Taxes and other regulations onimport and export duties (ACE, 2016).Tax incentives for small hydropower projects: The water resource tax, forest environmentalservice fee and VAT are exempted for small hydropower projects. The electricity buyer, i.e.Electricity of Vietnam (EVN) or its authorized units shall pay these taxes and fee to thehydropower producers.Mandatory Grid Access and Prioritized DispatchMandatory grid access: Based on the existing policy and regulatory framework of Vietnam, thepower utilities, i.e., EVN and its authorized units, shall be responsible for purchasing all electricity187 Circular 96/2012/TT-BCT (8/6/2012)188 Decision 2068/QD-TTg (5/5/2015)189 Decree 218/2013/ND-CP (26/12/2013) 106

generated from grid-connected RE-based power generating projects within their jurisdiction. Thepower shall be purchased on the basis of the SPPAs promulgated by MOIT. RE-based powerplants are given priority for the connection to the national power grid.Grid code and technical standards for grid connection: The technical requirements forconnecting RE-based power plants to the national power grid were promulgated by MOIT in2006190 and 2015191. Decision 37/2006/QD-BCN of the Ministry of Industry promulgated thedetailed technical requirements for interconnecting of all types of power plants, including RE-based power plants connection to the national power grid. MOIT’s Circular 39/2015/TT-BCTregulates the power distribution grid operation. This Circular has a separate article to addressspecific technical requirements for interconnecting thermal (including biomass, biogas and waste-to-energy), hydro, wind and solar power plants to the power distribution grid. Circular42/2015/TT-BCT promulgated the regulations on the technical standards and criteria for electricitymeasuring system, and the responsibilities and obligations of the partners involved in powerbuying and selling activities.Other RE Policy MeasuresSupport to knowledge development and capacity building:MOIT and the provincialDepartments of Industry and Trade (DOITs) are responsible for knowledge development andcapacity building in the RE sector in Vietnam. However, due to a lack of budget, the number ofcapacity building events (trainings, seminars and workshops) organized by MOIT and DOITs hasbeen limited in recent years. Most of the knowledge development and capacity building activitiesin the field of RE have been organized by international organizationssuch as the World Bank,UNDP, GIZ, EU, USAID, etc., through their RE-related projects and programs.6.2 Gender in RE Policies and Programmes in Asian Countries6.2.1 Gender in national policies in AsiaInternational research and experience across the world establish firmly that gender equalitybetween men and women enhances and positively correlates with human and economicdevelopment. Gender equality and women’s participation are generally recognized as crucial forsustainable development in national development strategies in South and South-East Asiancountries. Gender inclusion, enhancement of women’s involvement and narrowing the gender gapare included as overall intentions and aims in national development policies. National laws andpolicies guarantee men and women equal rights, and the overall political, institutional and legalframeworks for gender equality and women’s development are in place.Gender exists as a crosscutting theme in national policies of Asian countries, and most of thecountries have separate or joint ministries and gender focal points in different ministriesaddressing gender and women’s development issues. However, implementation of gender policiesis often weak due to lack of financial and human resources. The practical policy incentives andguidelines for gender mainstreaming and for reaching the goal of increased gender equality remainvague, and are left to be assessed in the sector policies and strategies by different ministries, whereconsequently gender issues appear to a varying extent or may be absent depending on eachindividual sector.190 Decision 37/2006/QD-BCN (16/10/2006)191 Circular 39/2015/TT-BCT (18/11/2015) and Circular 42/2015/TT-BCT (1/12/2015) 107

Asian countries today have specific national policies and/or strategies for gender equality andwomen’s development. The practical implementation of gender mainstreaming is yet often weak,and gender is not an appearing issue in most sectors. Gender incentives are most commonlyfocused on improving women’s educational and economic status, health, and politicalempowerment. Gender mainstreaming as a strategy is accordingly implemented in the policies andstrategies of the education, health and labour sectors, but also in rural development including theagriculture and livestock development sectors. In order to enhance women’s political andgovernance power, gender quotas may have been made obligatory in different level governmentorganizations and representative bodies. However, in reality, women, as half the population,remain grossly under-represented in most areas of society, both in the public and in the privatesector.Despite the established gender policies and frameworks for women’s rights and gender equalityacross the Asian countries, most of these countries demonstrate in real terms high inequalitybetween men and women. The Global Gender Gap Index192 that measures the internal genderparity193 between men and women in each country and then presents the results across the world,reveals that India is ranked 108/145, Indonesia 92/145, China 91/145, Vietnam 83/145, Thailand60/145, and the Philippines 7/145.The considerably greater gender equality of the Philippines compared to all the other countries isnoteworthy, and demonstrates successful implementation measures of policy intentions. Thecountry launched a 30-year strategic Plan for Gender-Responsive Development in 1995, andgender equality principles were included in all development programs and legislative reforms. ThePlan has been implemented through a Gender and Development Mainstreaming Strategy withguidelines for preparation of agency specific agendas and use of a gender budget. It is especiallysignificant that the Philippines is one of the few countries in the world that has adopted a GenderBudget (since 1995) that requires all government (including local government) units to use at least5% of their total budgets for programs, projects and activities addressing women’s need andfocusing on women’s rights. Moreover, the Framework Plan for Women in 2001 channeled focuson three priority areas: (i) women’s economic empowerment, (ii) protection and advancement ofwomen’s rights, and (iii) promotion of gender responsive government.194Even if large differences exist, many are still living in poverty, both geographically and betweendifferent population groups in the Philippines.195The important lessons that can be drawn from thegender equality development in the country, with relevance for any sector policy development(even for RE policies),is that gender mainstreaming, in all legislative and development initiatives,should take place not only at a general policy intention level but through a clear strategy withrequirements, guidelines and, importantly, ear-marked financial and human resources.6.2.2 Gender in RE Policies in Asia192World Economic Forum 2015193Gender parity is a numerical concept related to gender equality. Gender parity concerns relative equality in terms ofnumbers and proportions of women and men, girls and boys, and is often calculated as the ratio of female-to-male for agiven indicator (definition: http://eige.europa.eu/rdc/thesaurus/terms/1195).194(Lumampao, Lopez & Go, N.D)195 According to the Philippine Statistics Authority, 21.6% of the population were living under the national poverty linein 2015. 108

Reliable and affordable access to energy is globally recognized as a fundamental driver ofdevelopment, a crucial prerequisite for poverty reduction and economic development, improvedhealth and education standard, and for women’s economic and social empowerment. Womentraditionally bear a disproportionately great burden of household level energy production.Therefore, energy initiatives have a direct impact on their lives and livelihoods that will furtherbenefit their entire households.However, gender is virtually absent in national RE sector policies and strategic documents acrossthe Asian countries. Inclusion of women is found only at project level in women-focused cleanenergy projects, a great majority of which are concentrated on clean cooking solutions andhousehold lighting with small income generation development as a potential additional activity.The RE policy documents reviewed provide technical and financial principles and incentives forthe sector, but do not recognize gender or social issues related to energy needs and priorities,access, supply or services.An exception of energy sector policy that does emphasize gender and women’s inclusion isNepal’s Rural Energy Policy. The 2006 policy recognize women’s primary role in management oftraditional energy sources and the implications for their health. Women are included in communitymanagement of RE systems and energy is linked with other sectors to support women. However,the policy fails to address the actual barriers women face in rural energy projects, such asdifficulties to access project benefits, get employed or influence decisions made by constructioncompanies and users’ committees. The Nepalese RE subsidy policy is another example of a policypaying attention to women and allocating special targeted subsidies to women and sociallyexcluded groups.196At program level, the 2012 started 5-year National Rural Renewable Energy Program in Nepalprovides an example of clear definition of gender issues that are supported by practicalinstitutional mechanisms. Gender Equality and Social Inclusion (GESI) is mainstreamed withaffirmative action over all the program components. GESI is integrated in all the program elementsand phases, clear targets are defined and indicators identifies for monitoring. A number ofinstitutional mechanisms have been put in place to incorporate GESI into the program.197Gender-disaggregated data in the RE sector is generally scarce, especially concerning supply andmanagement systems including RE enterprises in urban and rural settings. There are though someprogram and project level experiences of gender mainstreaming, women-focused activities andtheir development impacts198. Lessons from such experiences point out issues for policydevelopment and strategies needed for gender mainstreaming and women’s enhancement in REdevelopment, discussed below in sections 7.3 and 8.1.196ENERGIA 2015197ibid.198For example, Bangladesh Infrastructure Development Company Limited Program is engaging women to select sitesfor solar home systems and street light locations and connecting with micro-finance programs for women’s incomegeneration. In addition, the Maldives Preparing Outer Islands for Sustainable Energy Development Project in which themonetary savings made from a shift from fossil fuels to renewable energy systems is used to support start-up businessesin communities, including those by women. ADB 2016. 109

7. RE POLICY GAP ANALYSISThe objective of the policy gap analysis is to identify the inadequacies and gaps of the existing REpolicy and regulatory framework of Pakistan based on the review of the best practices andlessons/experience from the five studied countries. The policy gap analysis consists of thefollowing steps:  Conduct an analysis to identify the key barriers to a successful adoption of RE in the industrial sector of Pakistan.  Assess the existing policy and regulatory framework of Pakistan vis-à-vis the identified barriers.  Consider the best practices/success factors and lessons learned from the five studied countries, and identify the inadequacies and gaps of the existing RE and EE policy and regulatory framework of Pakistan.  Finally, propose suitable policy measures and instruments to overcome the barriers and fill in the identified gaps.7.1Barriersto RE Adoption in the Industrial Sector of PakistanThe need for enacting policies to support adoption of RE technologies in the industrial sector isoften attributed to a variety of barriers, or conditions that prevent investments from occurring. TheRE technologies that have the highest chance to be adopted by the industries of Pakistan,aremainly: (i) biomass-based power generation and cogeneration, (ii) solar PV power generation and solar water heating, (iii) wind power generation, (iv) biogas-based power and heat generation, and (v) micro-hydropower generation (for industrial establishments located in rural areas).Although the government has taken several steps to promote these RE technologies in theindustrial sector of Pakistan, their increased uptake has been hampered due to several issues. Basedon an in-depth desk study and the findings from the consultation meetings with variousstakeholders in Pakistan, the following key barriers have been identified:  Technical barriers,  Financial and economic barriers,  Legal and regulatory barriers,  Local capacity barriers,  Communication barriers.Technical barriersThere is lack of assessment of economic potential of different RE sources for industrialapplications in Pakistan.Wind power, solar PV and solar heating installations are largely dependent on their location and onthe annual profile of wind speeds and solar irradiance. In 2007, USAID, in collaboration with thePakistan Meteorological Department (PMD) and AEDB, developed solar and wind atlases of 110

Pakistan, providing mapping of wind and solar intensity in the country. According to the maps, themost suitable area for wind projects is the Gharo-Keti Bandur Wind Corridor (in Sindh) whereutility-scale projects are installed. For industries, the adoption of wind power is not very attractiveas it is restricted to certain locations in the country. In case of solar power, most parts of thecountry are suitable but due to the intermittency factor and limitation in storage technologies, theindustry is not adopting it as its first choice to operate its steady state processes. Space availabilityis also a constraint for SMEs. However, there is a NAMA project under progress for providingsolar power through rooftop PV installations to SMEs in the sports, surgical and leather sectors inSialkot.Micro-hydropower plants provide economic and reliable power supply over a period of time, butthese are also dependent on geographic location and low seasonal water flows. The Consultant wasinformed during one of the stakeholders’ meetings that a textile mill in KP is operating on micro-hydel to meets its energy needs. However, a large potential exists in KP for community-basedpower plants.Biomass can provide a stable source of energy matching the other conventional technologies.However, there is a lack of assessment of the economic potential of biomass and biogas forindustrial applications. The WB, in cooperation with the AEDB, has developed a Biomass Atlasfor Pakistan in 2016. This included the assessment and mapping of the theoretical and technicalpotentials of biomass resources for the whole country. For the biomass residues generated byindustries, only bagasse and rice husk were assessed. In order to promote the use of biomass (suchas wheat straw, maize stalk, corncob) and biogas for energy generation in the industrial sector,their economic potential should also be assessed and mapped out.For solar systems, there are no standard requirements to be followed unless it is grid-connected.This allows the use of substandard equipment.There is insufficient capacity of the T&D grid to absorb the power capacities from newly installedor upcoming RE-based power generation plants. This currently constitutesa key barrier to REadoption by the industries of Pakistan.Financial and economic barriersNEPRA already promulgated upfront tariffs for the grid-connected wind power, solar PV, smallhydropower, and bagasse-based HP cogeneration projects in sugar mills. In December 2016,another upfront tariff was announced by NEPRA for sugar mills working at low pressure around22 bar to cover most of the sugar mill in country. However, there is no upfront tariff policy yet forbiomass or biogas-based power generation and cogeneration projects outside the sugar sector.The new upfront tariffs for biomass/biogas-based power and cogeneration projects are needed toencourage the use of biomass and biogas for energy production in the industrial sector. Theexisting upfront tariffs for bagasse-based cogeneration, wind power, solar power and smallhydropower projects are not attractive for industries because these upfront tariffs did not take intoconsideration the specific conditions of RE projects implemented in the industrial sector (such ashigh investment costs, high O&M costs per kWh of generated electricity due to small scale of theprojects).Investment costs for RE projects to be implemented in the industrial sector are rather high.These are often small-scale projects with higher investment cost per installed kW than large-scalegrid-connected IPPs. Investment costs include capital costs for construction of the RE-based 111

energy plant and the costs for major maintenance that needs to be carried out during the lifetime ofthe plant beyond usual operating expenses. The operating costs, including expenditure for normaloperation, maintenance and fuel, are also high. This results in high production costs of energy(electricity and/or heat) which make the industrial-scale RE projects less attractive. The O&Mcosts (PKR/kWh) can be reduced by increasing the capacity factor of the RE plant. For instance, incase of solar rooftop panel, this can be done through the installation of sun-tracker devices, whichresults in additional power generation as compared to stationary panel. Likewise, in case windturbines, a reduction in O&M costs per kWh can be obtained by increasing the hub height of theturbine, which results in additional power generation. However, such measures will increase theinvestment cost for both types of RE plants.There are insufficient financial incentives such as, investment grants and/or other subsidieswhich, based on international experience, are necessary for the promotion and implementation ofindustrial RE projects.Legal and regulatory barriersPakistan had nationawide target for utilization of RE for power generation. However, there is lackof targets for utilization of RE for power and heat in the industrial sector.Complicated and long licensing process: Although the regulatory framework and licensingprocedure for RE-based power projects were already elaborated in the RE Policy 2006, theirimplementation has been far from satisfactory. For instance, a recent survey carried out by EU-Switch Asia in the framework of its HP Cogen Project for the Sugar Industry of Pakistan revealsthat most of the project developers in the sugar sector have been facing multiple barriers. Figure 15provides a comparison of the stipulated time vs the actual time it can take to prepare and receiveapproval for all the documentation required for the development and implementation of HP Cogenprojects. Stipulated Time (Days) Actual Time - Min (Days) Actual Time - Max (Days) 0 100 200 300 400 500 600 700 Letter Of Intent (LOI) IEE/EIA Grid Interconnectivity Study Generation License Award Of Upfront Tariff Issuance of Letter of Support by… Energy Purchase Agreement (EPA) Implementation Agreement (IA) Financial Closure Figure 15: Stipulated vs actual time in HP Cogen approval processFigure 15 shows that the grid interconnection study (GIS) approval process can be the mainbottleneck. Grid interconnectivity studies are time consuming and slow down the process ofimplementation of HP Cogen Plants (especially the issuance of the generation license by NEPRA 112

for which LOI, IEE/EIA and GIS are pre-requisites). Only two service providers, NTDC itself andPower Planner International (PPI) conduct these studies. As there is no standardized design forgrid connectivity, many revisions are required, which further increases the timeframe for theimplementation of a HP Cogen plant.EPA also takes very long to issue the No Objection Certificates (NOCs) to the project sponsor. Itshould be noted that there is no stipulated time-line for approval of IEE/EIA.Figure 15 reveals that the award of upfront tariff is also a hurdle. The major reason for this delay isthat consent of CPPA is required for filing the application for Upfront Tariff Acceptance, whichtakes time while there is no stipulated timeline for CPPA to issue the consent letter.Signing of energy purchase agreement turns out to be another serious hurdle. The reasons fordelays are given below:  Project proponents/sponsors/owners require extensive negotiations with CPPA and NTDC (relevant sections/departments at NTDC are Transmission Network Operator and System Operator) before the energy purchase agreement can be signed.  The approval from the Board of Directors of AEDB takes time.  The approval of the Interconnection Study Report and lengthy discussions of Technical Schedules by CPPA cause further delays.  CPPA considers that the responsibility to approve the Technical Schedules lies with NTDC and vice versa.It should be noted that the barriers presented above are equally applicable to solar and wind powerplants. In addition, the wind and solar power projects face the following barriers:  Land acquisition for wind/solar power plants requires approval from various authorities, which is a tedious and long process.  Due to their intermittency (intermittent generation of power), wind and solar plants face a power evacuation barrier as the power purchaser is reluctant to sign contract with an RE plant which cannot serve the base load and may destabilize the grid.The determination of upfront tariff also takes considerable time, which sometimes results indropping the project idea by the investor. Another significant barrier comes from the lack ofcoordination among policy stakeholders (NEPRA, AEDB, CPPA, MOWP, NTDC, etc.) whichcauses many delays with respect to implementation of RE projects.Since April 20, 2015, AEDB has stopped issuing LOIs, resulting in a number of projects coming toa halt. So far, new proposals of more than 4,500 MW solar PV power projects from 87 companieshave been received by AEDB. However, due to this halt, the requests of these companies have notbeen reviewed.199Local capacity barriersBased on reports from several international cooperation organizations (such as UNIDO, EU-Switch Asia, GIZ, etc.), there is lack of RE technology knowledge among industries in Pakistan. Inthe case of bagasse-based HP cogeneration (HPC), the unavailability of well-trained staff to carry199http://www.aedb.org/images/RoadmapRolloutNetMetering2016.pdf 113

out the operation and maintenance (O&M) of this new technology can eventually discourage sugarmill owners to install and operate a HPC plant.A skilled local workforce is required for the successful development and deployment of REprojects. At present, there is lack of capacity of local manufacturers to provide the latest REtechnology for industries. For instance, there is not a single local manufacturer of steam turbinesand only three companies have experience in manufacturing high-pressure boilers. Likewise, thereis only one solar PV equipment panel manufacturing facility, but no local large-scale wind turbinemanufacturers. Thus, most of the reliance is on the import of RE technology since the capacity todevelop the technology is not locally available.As mentioned in section 4.2, PCRET, with the financial support from the GOP, is carrying outsome R&D programs in RE technologies, mainly on biogas technologies and small-scale windturbines. However, there is not enough involvement of academic or research institutions in R&Dactivities and programs on new RE technologies.Communication barriersBased on the findings from the consultations with various stakeholders in Pakistan, there is a lackof effective communication between the government and stakeholders.This is an obstacle to thesuccessful enforcement of RE policies, and to the development and implementationof RE projects.Awareness barriersLack of awareness and understanding of the social and environmental benefits of using REtechnologies by industry decision makers is one of the major barriers. An industrial sector that issolely dependent on energy from fossil fuels cannot be considered sustainable. Despite theconsiderable potential for increasing the use of RE sources in industrial operations around theworld, progress in this area continues to be hampered by a host of barriers and bottlenecks such as(i) Insufficient levels of awareness and information about the state of technological developmentand the costs and effectiveness of technology among policymakers, energy experts, potentialinvestors and government functional agencies, and (ii) Lack of social promotion measuresresulting in insufficient knowledge of the benefits of RE technologies.7.2Comparative and Gap analysis of RE Policies in Pakistan and five Asian Countries7.2.1 Summary of existing RE policy instruments in Pakistan and fivestudied countriesThe RE policy gap analysis between Pakistan and the five reference Asian countries is based onthe comparison between the existing RE policy instruments in those countries. This comparison isprovided in Table 44.Table 44: Comparison of RE policies in Pakistan and five other Asian countries RE policy instruments CN IN PH TH VN PKRE targets √√√√√√Price-based policies 114

• Feed-in tariff regime/premium √√√√√√• SPPA √√√√√√• Premium/incentive for use of local equipment √√• Reduced T&D costs √O• Net metering √ √OO√Quantity-based policies/procurement mechanisms √√√ O • RE quota obligation / RPS √√ • REC market • Competitive bidding/Auction √O√ √ √Financial incentives √√√√ √ • Soft loan √√ √ • Investment grants/subsidies • Financial subsidy (tariff subsidy, loan guarantee, etc.) √ √√Fiscal incentives √√ √ • Accelerated depreciation √√√ √ • Exempted/reduced VAT • Exempted/reduced CIT √√√√√√ • Exempted/reduced ID&T • Exempted/reduced licensing fee √√√√√ • Exempted/reduced land use fee √ √Mandatory grid access and prioritized dispatch O√ √ √ √ √ √ √ √O√ √ • Mandatory grid access/Prioritized dispatch • Grid code/standards that facilitate RE integrationOther RE policy measures• Support to educational and R&D activities √√ √O• Support to knowledge development& capacity building √√√√√√• Support for local manufacturers √√ O• Support for ESCOs √ √O• One-window clearance system for licensing √√ √“√” – policy already deployed; “O” – policy under developmentTable 45 shows that all studied countries, including Pakistan, have set national RE targets, FITsand SPPAs. They also offer soft loans and fiscal incentives to RE project developers. Special fundsare also available for knowledge development and capacity building.7.2.2 Best practices and lessons learned from all the five studiedcountriesChinaChina has been a global champion in effectively supporting the implementation of RE projects.This success can be attributed to the following factors:  The Medium and Long Term Development Plan for RE (2007) set up achievable targets (15% RE by 2020) which were in fact already met by 2015. They were then revised and might still be further adjusted if the new targets are reached earlier than planned.  According to the RE Law (2005), RE-based power plants are guaranteed grid connection with different pre-set FITs for all RE. The latter were regularly adjusted. 115

 Grid connection costs for RE-based plants are shouldered by the utilities which receive some subsidies from GOC.  Emission Trading Schemes (ETS) have been implemented in some key provinces and cities (2011) providing additional revenues to industries investing in RE projects. Those schemes will be merged into a National ETS which will aim at supporting carbon emission reductions in eight key industrial sectors.  The availability of soft loans from state banks and other local and international financial institutions  A key success factor was the creation of a China RE Development Fund (2006) thanks to surcharges levied on electricity consumption. The surcharges have been increased progressively and help provide: - subsidies for RE power tariffs (in form of FITs), - capital incentives for small-scale power PV projects and - grants for R&D of RE technology.  Some tax reduction measures have also been taken  Support to R&D activities, knowledge development and capacity building via the creation of the Chinese RE Industries Agency.  Support to local manufacturers(import tax exemption, low interest rates, export credits)However some measures taken by GOC were less successful, i.e.:  the Mandatory Market Share mechanism forcing conventional power plants to have a share of non-hydro RE which could be up to 8% by 2020. That was not enforced due to a strong resistance of the state-owned utilities. This mechanism will have to be revised.IndiaIndia has been a pioneer in promoting the use of RE with the creation of the Ministry of NonConventional Energy Sources in 1992. It is now called Ministry of New and Renewable Energy(MNRE). Policy instruments have been in place and fine tuned over the last two decades. India hasindeed the most comprehensive package of RE policy instruments.India has set ambitious but achievable targets for RE. Those targets can be achieved thanks to astrong policy support, including the launch of the net meteringandFIT.GOI has created an Intra state Transmission System to secure the grid integration of large scaleRE projects.The RE Roadmapwas prepared after stakeholder consultations towards an integrated policystrategy for rapid RE implementation. The new policy will establish targets, required financialsupport, integrated energy resources planning, restructure and improve the Renewable PurchaseObligation(RPO) and implement mandatory net metering (NEM)/feed-in tariff (FIT).Establishment of a one-stop-shop for standardized contracting, financial support and disbursalmechanism, streamlined project development and low-cost financing.The broad success of RE in India (38.8 GW by end of 2015) can be attributed to: 116

 An appropriate and adjustable FITs for different RE projects.  Long Term PPA at fixed tariffs (2006)  Compulsary procurement of WTE based power.  RE certificates (2008)  Soft loansandfinancial incentives(accelerated depreciation, tax reduction/exemption)  Establishing Carbon/CDM credit transactions;  The creation of the National Clean Energy Fund (2011) from surcharges levied on imported/produced coal helped support RE activities. It provides both grants and soft loans to projects proposing innovative methods to adopt clean energy technology and R&D. It includes upgrading/creation of power transmission systems, JNNSM’s installation of solar PV systems (solar lights, solar water pumps, rooftop and ground-mounted solar PV plants), pilot projects to assess wind power potential, etc.  The establishment of RE Management Centersand the creation of a Grid code (2010)helped support the mandatory grid access with dispatch priority for RE;  Support is offered to RD&D activities,training(scholarship/fellowship) in RE R&D, knowledge development via a broad use media;  The creation of Innovation Finance Programme allowed to support local manufacturers to embark into innovative clean technologies.However India was not so succesful in the implementation of:  Rooftop solar net metering,meeting strong reluctance from DISCOs) and users as power tariffs very low.  RE Quota obligations for utilities using coal as main fuel.ThailandThailand is considered as the most successful country in ASEAN for its effective support to thedevelopment and implementation of RE projects. It all started in 1992, when the SPP programmeand the ENCON Fund were established, allowing biomass energy projects to sell electricity to thegrid.Hence, many positive lessons can be learned from Thailand’s successful experience in supportingthe implementation of RE projects:  The Department of Alternative Energy Development (DEDE) has conducted thorough potential assessment of all RE resources.  Clear and achievable long term targets have been set for RE to produce power, thermal energy and biofuel.  The Adder Scheme (2007) offered a fix amount to be paid on top of the wholesale electricity tariff. It was regularly adjusted and kept attractive enough to attract project developers and investors. It was replaced recently by the FITs. 117

 The Small and Very Small Power Producer Programmes (SPPandVSPP) have been key instruments supporting RE project implementation. Standard Power Purchase Agreement can easily be signed with utilities.  The first financial Incentives for RE project were coming from the ENCON Fund (1992). The Fund was built from levies on petroleum products. It allowed the funding of RE projects via different mechanisms (tax incentives, ESCO Fund, EE Revolving Fund).  RE projects are granted mandatory grid access.  The grid capacity is being monitored and boosted to absorb additional RE power.  Supportis provided by DEDE to R&D, knowledge development,capacity building in the RE field and to local service providers.The PhilippinesThe Philippines are still relatively new in the implementation of RE projects, except in thegeothermal sector where they are one of the leaders in the world. Therefore only a few lessons canbe learned.The National Renewable Energy Program (NREP) was launched in 2011 to support theachievement of the goals set in the Renewable Energy Act 2008.Targets were set for all RE. It itstill early to assess results in wind, biomass and solar (around 800 MW by end of 2015).However, the future looks promising as most necessarypolicy tools have been put in place.Theyare:targets, FiT for each RE source, net metering, Renewable Portfolio Standard (RPS), financialand fiscal incentives,RE plants given grid connection priority, Grid Code, support to knowledgeand CB development,One-Stop-Shop for RE is alsoin place.It should be noted that the success ofthe geothermal programme in the 1970’s up to the 90’s was due to a strong willingness of theGovernment of the Philippines to tap these huge energy resources. A specific Act allowed thefinancing, construction, O&M of infrastrucure projects by local and foreign private entities,which spearheaded the exploration and development of the geothermal sector.VietnamVietnam’s RE Policy is still very recent and it is hard to assess its impact on RE implementationyet.However, Vietnam is catching up very fast, putting in place some more RE policy tools to beable to fully tap its RE potential. These tools were already in place in 2008, such as FITs, SPPAand tax incentives.The FIT was low and not attractive enough to stimulate the implementation ofRE most projects with the exception of small hydro projects (SHP). SHP electricity productioncosts were indeed lower that those from other RE sources such as biomass, wind and solar. Specialincentives and other preferential treatments offered by GOV for project implemented in difficultsocio economic conditions, like in remote mountainous areas, stimulated these SHP investments.7.2.3 Policy gap analysisPakistan has got many policy instruments in place already. Some have been mentioned earlier,such as the RE targets, FITs, SPPAs, some fiscal incentives and some support to awareness raisngand capacity building. However, additional supporting instruments need to be developed. They areidentified and systematically listed, based on Table 45 which summarizes the barriers, the current 118

measures/policies deployed in Pakistan vis-à-vis the barriers, the international policy bestpractices, and the additional measures recommended for Pakistan to overcome the barriers. Thelatter address technical, financial and economic, legal and regulatory, local capacity,communication, as well a social and environment matters. 119

Table 45: Summary of barriers, policy gaps and recommended measures for Barriers Assessment of measures/policies Intern deployed in Pakistan vis-à-vis the toTechnical barriers:Limited assessment of barrierseconomic potential ofdifferent RE resources for  Assessment and mapping of technical  Chinindustrial applications potential of RE resources are in cond progress. potenInsufficient capacity of the appliT&D grid  There is still a lack of comprehensive assessmentof economic potential of  All fi RE resources for industrial close applications (except for sugar their industry) indus  Existing T&D expansion plan, but not addressing industrial RE power evacuationFinancial and economic barriers:Absence of specific tariff  Except for the sugar industry, there is  FIT p powemechanisms for someRE- no upfront tariff policy for imple Philipbased power projects biomass/biogas-based power  Comimplemented in the generation and cogeneration in the has b Indiaindustrial sector industrial sector.  A co  New tariff mechanisms (e.g. finan inves competitive bidding, net metering) subsi provi are under developmentHigh specific investment  Soft loan provided by SBPcosts of industry-based RE  Some fiscal incentivesprojects (exempted/reduced CIT, ID&T and licensing fee) are provided

r Pakistan to promote Measures to overcome barriersnational policy best practices o overcome the barrierna, India and Thailand have M1.Assessment and mapping of economicducted such RE economic potential of different RE resources forntial assessment for industrial industrial applicationsicationsive studied countries have M2.Assessment of the existing andely monitored and expanded upcoming RE projects in the industrial sector T&D grid to absorb that are expected to sell excess power to thestrial RE power grid M3.Expansion of T&D in order to absorb excess RE power produced by industries policy for industrial RE-based M4.Development of new appropriatetariff- er projectsis successfully related mechanisms for RE-based power emented in China, India, the generation and cogeneration projects in the ppines and Thailand. industrial sectormpetitive bidding mechanism been successful in China and a.omprehensive package of M5.Provision of incentives to allowncial incentives (soft loans, industrial RE projects to reach acceptablestment grants, financial economic viability idy and fiscal incentives) are ided in China, India and M6.Development and promotion of

Insufficient financial  Soft loans are provided by SBP Thailincentives for industry-based through the RE Refinance Facility  Spec (RE DRE projects India FundLegal and regulatory barriers: (ENC packaLack of targets for  Pakistan has nationwide targets for RE putilization of RE sources in utilization of RE for power  Chin targethe industrial sector generation only. both the inComplicated and long  AEDB is supporting projectlicensing process for RE developers, but the licensing  A Onprojects implemented in the procedure is still complicated and placeindustrial sector time-consuming, especially for Thail industry-based RE projects the o licenLocal capacity barriers:  AEDB is designated institutionLimited RE technology responsible for RE knowledge  RE Pknowledge (including O&M development Centeaspects) among industries the stLimited capacity of local RE  Insufficient support to knowledge  Strontechnology manufacturers development and capacity building know for local RE equipment capac manufacturers Chin  Insufficient financial support  Finan incen (capa equip provi 12

land. alternative business models for RE power projects in the industrial sectorcial funds established in China M7.Creation of scheme(s)/fund to provide Development Fund, 2006), financial support for RE projects in thea (National Clean Energy industrial sectord, 2011), and ThailandCON Fund, 1992) to provide a age of financial incentives forprojects in the industrial sectorna, India and Thailand had set M8.Assessment of energy requirement andets for utilization of RE for setting of targets for use of RE sources for power and heat generation in power and/or heat generation in thendustrial sector industrial sectorne-Stop-Shop Service is in M9.Creation of a One-Stop Agency toe in the Philippines and centralize and coordinate the licensing land to suport the investors in process and streamlining the licensingobtention of their permits and process to simplify the approval procedurences. and reduce the processing time for industry- based RE projectsPlatform, RE Knowledge M10.Establishment of a RE Knowledge er were established in most of Center with the mandate to support the tudied countries. deployment of RE technologiesng financial support for REwledge development and M11.Creation of a program and provide city building was provided in funding/incentives to support thena, India and Thailand development of capacity of local RE technology manufacturers ncial support (soft loans, taxntives) and other supportacity building) to localpment manufacturersare ided in China and India21

Insufficient local R&D  PCRET, with financial support from  Stronprogramsin RE technologies the GOP, is carrying out R&D schol programs in RE technologies. R&DCommunication barriers ChinLack of effective  Financial support to the localcommunication mechanisms academic and R&D institutions is still  Succbetween the government and limited mechRE stakeholders Com  Lack of stakeholder communication/ (undeAwareness barriers: consultation strategy NatioLack of awareness of the (undesocial and environmental  Lack of awareness and information Indusbenefits of using RE dissemination program the Ftechnologies by industrydecision makers  Succ InforRE in the industrial sector Prog Infor Com in the 12

ng financial support (grants, M12.Creation of a program and provide larships) for educational and funding/incentives to support the R&DD activities in RE field in activites on RE technologiesna and Indiacessful RE communication M13. Development of a policy and protocol hanisms, such as RE to promote communication andcoordinationmmunication Platform in China among relevant RE stakeholders er RE Industries Association), onal Platform for RE in India er RE Federation), and RE stry Club in Thailand (underFederation of Thai Industries)cessful government funded RE M14.Creation of a program to disseminate rmation and Public Awareness information and to raise awareness ofgram (IPAP) in India and RE industry decision makers in using RE rmation, Education and technologiesmmunication Program (IECP) e Philippines22

7.3Gaps and Lessons for Gender Mainstreaming in RE PolicyGaps remain between the RE policy and the practical context of men and women who need and useenergy, women in the key role as major household energy managers, livelihoods providers andmicro- and small entrepreneurs. Some systematic barriers for gender mainstreaming and women’sparticipation appear prevalent in the sector, affecting women’s ability to fully benefit from theavailable interventions.The needs and priorities of energy access and useRE policies and development initiatives tend to have a technology-focused approach. REdevelopment strategies and, consequently, programs and projects are formulated from the supplyperspective and not from the needs and priorities perspective of the target groups that need reliableand affordable energy for their social and economic development. Women’s and men’s needs andpriorities related to energy access and use are different, based on their different roles andresponsibilities in society. Gender perspective should therefore be mainstreamed into theassessment of needs and priorities for formulation of policies leading to RE initiatives that willmeet both men’s and women’s energy needs and priorities of access and use through technologythat is best suitable for the different target groups. Initiatives that are based on the needs andpriorities of both men and women will be best suitable for enhancing their social and economicdevelopment at both household and community level, and for providing potential for enterprise andindustrial development.Inclusion of women as potential RE entrepreneurs and employeesWomen are generally considered to be less adept than men to work in technological branches suchas energy business, and far more men than women are engaged in the RE sector200. Despite the factthat women in rural and poor urban households are usually the main providers of householdenergy, in different RE development initiatives they are typically given merely an end-user role,and women are seldom considered as potential suppliers and maintainers of energy services.The women-focused RE projects have been largely focused on basic household energy such asimproved cooking stoves and home lighting, biomass-based energy production and related micro-business. Little attention has been paid to women’s potential as entrepreneurs and laborers inenergy production, distribution and maintenance, and the economic opportunities these roles couldprovide women.201 Projects supporting women’s small-scale entrepreneurship in RE sector haveshown successful in enhancing local economic, social and living standards development.202Women are typically engaged in the informal sector, and agriculture accounts for more than 60%of female employment in South Asia203. The benefits of improved energy access, such as ruralelectrification for women in terms of saved time and costs are significant, added with new income200IRENA 2013201 Lumampao, Lopez and Go, N.D202Sarkar 2016203Dutta, S. In ADB 2016

earning opportunities through small industries and other entrepreneurial activities. Electrification ofrice mils and other grain, oil and food processing facilities are usually the first rural industries to beelectrified after grid access. Further encouragement of women to become energy entrepreneursrather than only consumers has shown to have multiple development effects through, e.g., home-based women-run micro-enterprises, expansion of economic activities and diversification ofproduction options, energy access enabling new sources of income to support family investments ineducation, health and living standards. Women-owned businesses are a significant source of self-employment and economic growth, but majority of them are small and micro enterprises in tradeand services. Yet across the world, women are establishing RE enterprises such as small electricityproduction and distribution networks, charcoal production and solar businesses.204 Moreover,female RE entrepreneurship tends to have further cumulative impacts on their families andcommunities. Energy policies that support development of entrepreneurial energy activities andbusiness approaches that involve and benefit women, have shown to have positive impactsbeyond the energy sector, such as improved health and education, reduced household poverty, andwomen’s empowerment among others.205Gender-disaggregated data in the RE sector is scarce. RE sector provides for both men and womennot only entrepreneurial but also considerable labor opportunities. The International RenewableEnergy Agency (IRENA) estimates that there are approx. 8,079 million direct and indirect jobs inthe RE industry worldwide, one third of them in the solar industry. IRENA further estimates thatdoubling the share of renewables in the global energy would result in over 24 million jobsworldwide by 2030.206Women, being worldwide the major household energy providers, are involved in numeroussustainable bioenergy projects, for example the partners of the Global Alliance for Clean Cook-stoves manufactured almost 10 million cook-stoves in 2012, employing 76.000 people of whom54% were women207.A recent analysis of women’s economic participation and empowerment in Pakistan208 identifieswomen’s total share in the labor force to be low at 26% of all women in ages 15-64 years, morethan 2/3 of them working in agriculture. Of the total industrial sector labor force, women makeonly 20%. Technical and vocational training for women is occasional, and the training provided iswithin traditional skills such as knitting, sewing and embroidery, which will generate income underthe minimum wage level. Lack of access to finance appears as another major fallback for women’seconomic development; only 5% of women own a bank account and 13% of women have access toloans from microfinance organizations. Microfinance or rural support programs administered byNGOs typically allocate the types of loans taken by women. Majority of the receivers of these pettyloans are women.204IRENA 2013205Dutta, S. 2003206IRENA 2016. Data is reported to be based on information from national agencies and on global and regional studies.Probably a great number of local jobs created through donor, NGO and other programs and projects are not included inthe estimate.207 Global Alliance for Clean Cookstoves 2013208Zaidi Y., Farooq S. et al. 2016 124

Women as entrepreneurs and employees in the RE sector face many barriers such as lack ofaccess to information about new forms of energy, lack of knowledge, education and technicaltraining in RE technology, lack of training in business management, and lack of access to financialsources and services that are necessary for business start-up.209 For gender mainstreaming in the REsector, specific women-focused policy incentives are needed for encouraging and enhancingwomen in energy production and services, as entrepreneurs and employees, with targeted programsproviding required technical and entrepreneurial skills as well as funding mechanisms.210A funding option that could be implemented through policy measures is a requirement for projectowners (government or private developers) to allocate a certain percentage (such as 1-1.5%) of thetotal project costs and of the annual electricity sales for a fund to be administered by localelectricity users (men and women) for energy-based income generation such as micro/smallenterprises and cooperative enterprises, especially those started, driven and benefitting women.211Government policy measures can encourage both the government and private sector to promotewomen’s employment leading to improved gender balance in the RE sector. Policy incentives mayinclude e.g. quotas and economic benefit measures for female employment, training, core laborstandards, non-discriminatory practices and safety in workplace.Inclusion of women in policy formation, planning and decision-makingRepresentation of women is generally low in decision-making bodies in the energy sector and inthe formal governance systems. Few women are involved in the male-dominated RE sector policydevelopment, planning and decision-making. Consequently, women’s perspectives in energy needs,access and use priorities, women’s knowledge, capacities and economic development optionsthrough RE are not considered in the planning of policy incentives, strategies, programs andinvestments. As women to a greater extent than men hold a less technology and more socio-economic and community-focused perspective, the male-dominated RE planning remains rathertop-down, technical and supply-driven.212Quotas for including women at all levels of policyformation, planning and decision making are therefore urgently needed for sustainabledevelopment of the RE sector and RE initiatives.In most countries energy sector management is more centralized compared to other sectors, andless open to input from stakeholders representing local communities and small businesses.Procedures for setting national energy priorities seldom take into account gender-separated needsand use of energy in both household, service and productive sectors.213 Gender mainstreamingcould contribute to increasing effectiveness of RE policy, and increased female representation inpolicy formation, planning and decision-making bodies could enhance the cross-sectoral andcumulative effects of RE strategies. Connecting RE policy initiatives with those in other sectorslike social policy, healthcare, agriculture and rural development have further potential to increasethe positive effects of the RE sector.209UNIDO 2014, IRENA 2013210ADB 2016, IRENA 2013, ENERGIA 2015, Sarkar 2016211There are good experiences of this measure in other countries212ENERGIA 2015, ADB 2016213ENERGIA 2015 125

8. POLICY RECOMMENDATIONSFOR THE PROMOTION OF RE IN THE INDUSTRIAL SECTOR OF PAKISTAN8.1 Policy recommendations for RE promotion in the industrial sector of PakistanBased on the identified barriers, on the comparison and gap analyses of the existing RE policyframework in Pakistan with the five Asian countries, and on the findings from consultations withvarious stakeholders in Pakistan, the following RE policy instruments are recommended forPakistan to promote the RE adoption in the industrial sector.Table 46: Recommended policy instruments for promotion of RE adoption in industrial sector ofPakistanPolicy Short description of the policyno.P1 Create a program to assess and map the economic potential of different RE resources applicable to industries and industry-based projects (existing and potential) that generate power and/or heat using RE resources (Covering measures M1 & M2 in Table 45)P2 Formulate a plan to expand and strengthen the T&D network that will allow the system to absorb excess RE power produced by industries (Covering M3)P3 Formulate a regulatory policy that regularly sets the target for utilization of RE for power and/or heat generation in the industrial sector, and promotes the use of RE in the industrial sector through attractive tariff-related mechanisms such as feed-in-tariff (FIT), competitive bidding and net metering. (Covering M4 & M8)P4 Develop a program or scheme to provide fiscal and financial incentives to projects utilizing RE resources in the industrial sector. The program should include the development and promotion of alternative business models for RE power projects in the industrial sector. (Covering M5, M6 & M7)P5 Create a program that will establish a one-stop agency to centralize, coordinate and help streamline the licensing process by reducing the processing time. The agency will be the focal point for communication and coordination among key RE stakeholders (Covering M9 & M13)P6 Create a program that will establish a RE Knowledge Center with the mandate to support the deployment of RE technologies. The Center will also be responsible to collect information, create awareness, share knowledge, and build capacity on RE technologies forlocal RE technology manufacturers, R&D personnel, O&M service providers and other stakeholders. The program will include the provision of funding and incentives to support the activities of the Center and build the capacity of the stakeholders. (Covering M10, M11, M12 & M14)P7 Formulate a policy to establish required standard procedures for gender mainstreaming in industrial RE initiatives and projects, to support women’s economic and entrepreneurial development opportunities, and ensure a gender balance in policy development, planning, decision-making and leadership including quotas for women at all levels (Covering gender issues) 126

8.2 Implementing rules and regulations &implementation roadmap for the recommended policiesThe policies that have been recommended in the previous section will have high-level provisionsthat will provide the overarching basis and guidelines for the objectives being pursued. Further tothis, the implementing rules and regulations, as well as the implementation roadmap, need to beelaborated for the guidance of the implementing agencies and those affected by the policies. Thissection provides the guideposts and suggestions in drafting these documents once the policies havebeen approved.Definitions of the key terms used in this section:“Clean Energy Fund” is a multi-partner trust fund whose objective is to improve the energysecurity in the country and decrease the rate of climate change through increased use of cleanenergy. A National Clean Energy Fund can be created from levy of conventional fuels based on the“polluter pays principle”.“Economic potential” refers to the amount of economically viable resources that are available forRE generation at a location or within a defined area. It also means that available resources have notyet been tapped and fully developed or exploited.“Feed-in Tariff”(FIT) system is a scheme that involves the obligation on the part of electric powerindustry participants to source electricity from RE generation at a guaranteed fixed price applicablefor a given period of time.“Financial incentives” mean financial benefits offered to industry-based RE projects.“Fiscal incentives” mean tax measures geared to encourage industries to adopt RE projects.“Gender mainstreaming” means assessing the implications of any initiative or project on both menand women, and making both women’s and men’s concerns and experiences an integral part of itsdesign, implementation, monitoring and evaluation so that men and women will benefit equally.“Industrial sector” means small-scale, medium-scale and large-scale industry involvingmanufacturing, making, formulating, altering, repairing, finishing, packing or otherwise treatingany article or substance with a view to its use, sale, transport, delivery or disposal.“Levelized Avoided Cost of Energy” (LACE) is the avoided costs from other sources divided bythe annual yearly output of the non-dispatchable source.“Levelized Cost of Energy” (LCOE) is the net present value of the unit-cost of electricity over thelifetime of a generating asset. It is the average price that the generating asset must receive in amarket to break even over its lifetime.“One-Stop Agency” (or One-Stop-Shop) is a one-stop integrated service center that shall helpstreamline licensing processes by simplifying the approval procedures and reducing the processing 127

time. It is also the focal point for communication, consultation and coordination among REstakeholders on policy issues.\"Qualified industrial facilities\" (QIF) refer to entities that generate electric power from an eligibleon-site RE generating facility, that can be connected to the grid for the purpose of entering into aFIT System, and other grid export mechanisms.“RE Knowledge Center” is a one-stop integrated information service center that will be thedepository and source of RE technology awareness and knowledge, and will be capacity-buildingprovider in Pakistan on RE matters.“RE target” is an official commitment, plan or goal set by the GOP to achieve a certain amount ofRE utilization in the industrial sector by a pre-set date.“Technical potential” represents the achievable energy generation of a particular technology givensystem performance, topographic limitations, environmental, and land-use constraints.P1. Create a program to assess and map the economic potential of different RE resourcesapplicable toindustries and industry-based projects (existing and potential) that generatepower and/or heat from RE resources.Title of the Program: Economic Potential Assessment Program (EPAP) of RE resources for theIndustrial Sector of PakistanPurpose/coverage: The aim of the Program is to assess the economic potential of all RE resourcesapplicable for industries, and to map the industry-based projects (both existing and potential)able togenerate power and/or heat from RE resources.The program will cover the assessment andmapping of both the potential and ongoing RE projects that are expected to sell power to the grid.The outputs of this Program can be used for the development of the T&D Expansion Plan (P2) andfor setting RE targets for the industrial sector of Pakistan (P3).Key elements of the Program and the guidelines on their design and formulation:Identification of key stakeholders: Industries that are covered by the EPAP shall be identified. Theenergy intensive industries with high consumption of power and/or heatshallbe given priority suchas textile, leather, sugar, pulp and paper.A preliminary list of identified industrial sites shall beprepared in consultation with relevant Industry Associations and Chambers of Commerce andIndustry. Other key stakeholders who will participate in the program shall also be identified, suchas information providers, potential beneficiaries, institutions (university, institutes,…) orconsultants who will conduct the survey and assessments, among others.Selection of industrial sites to be included in the Program: The existing atlas for wind, solar andbiomass commissioned by the ESMAP/World Bank and other sources of data shall be used toidentify areas with the highest technical potential of RE resources. Based on these technicalpotential maps,adetailed list of selected industrial sites shall be prepared.Conduct of site surveys:The site surveys shall be conducted in all selected industrial sites to collectinformation and data for the assessment of economic potential. 128

Determination of economic potential: It is recommended that the economic parameters such as theLevelized Cost of Energy (LCOE) and, if possible, the Levelized Avoided Cost of Energy (LACE)shall be used for assessing the economic potential of RE resources applicable for industries. Theyshall be based on consultation with other relevant agencies (such as DISCOs, NTDC, CPPA andNEPRA) in order to estimatethe most realistic economic potential for industries.The methodologyused by NREL214could be followed for determining the economic potential: a. For each industrial site, LCOE is calculated based on RE technologies (biomass, biogas, solar, wind, or hydropower)applicable to that site, incorporating regional plant construction costs, technology cost, performance and estimated intra-regional transmission costs. b. LACE is calculated for the same site by estimating the potential revenues available fromthe same RE technology. It can be interpreted as the amount the project would be paid for the electrical energy and capacity itcan provide (or alternatively, what a utility or other entity would not have to purchase fromother sources). c. The Economic Potential is calculatedas the net value of LACE - LCOE for each site and each RE technology. A specific location is considered economically viable if its net value is positive. The technical potential associated with locations and RE technologies with positive net value is summed and deemed the economic potential.Informationdissemination: Dissemination Workshops shall be conducted to present the findings ofthe assessment of the economic potential of different areas and industries. The result of theassessment shall be made available to key stakeholders and investors at a minimum price or at nocost. A website shall be developed for the information dissemination.Annual updating on RE technology: RE technology options shall be regularly discussed with localand international suppliers to deploy the most resource efficient systems and shall also be madeavailable to the key stakeholders and investors. This part of the program will be interlinked withthe program on information dissemination and workshops.Budget/Funding of the Program: Estimate and identify sources of fundings and recurring budgetand cost for the program based on the frequency of the updating of data.Mandate/Tasks and responsibilities:The following tasks are to be implemented to support thedesign, formulation and establisment of the Program:AEDB, in collaboration with SMEDA, Industrial Associations, Chambers of Commerce andIndustry, etc.:  Identify the industries and other key stakeholders to be involved in the Program.  Design the site surveys,and identify and contract the entity for conducting the surveys.  Conduct an assessment of the economic potential of the different RE resources for each industrial site, and develop a list of potential industry-based RE projects.  Identify and assess the existing,ongoing and potential RE projects in the industrial sector that are expected to sell power to the grid for the purpose of supporting the T&D expansion plan to cater for these grid connections.  Establish a program and procedure for the regular updating of the data and list of industry- based RE projects.214 NREL (2016) 129

 Conduct periodic information events (e.g., workshops, investment fora,…) on the latest economic potential assessment with investors and relevant industry stakeholders.  Develop a website for information dissemination.  Design and formulate the Program for approval by GOP including the budget and sources of funding.The GOP (i.e., MOWP, and other concerned ministries):  Allocate sufficient budget from GOP or source funding from other sponsors for the execution of the program and its activities.  Encourage and rally identified key stakeholders who should participate in the program such as information providers, financiers, investors, academic and R&D institutions and consultants, among others.  Conduct consultation meetings with relevant stakeholders on the components and benefits of the program.Timeframe:Within 3 to 6 months from the approval of the policy recommendation by GOP, AEDBshouldinitiate the development of the Program. The design and formulation should be completedwithin 6 to 12 months.P2. Formulate a plan to expand and strengthen the T&D network that will allow the systemto absorb excess RE power produced by industries.Title of the Program: T&D Expansion Plan for RE-based generation from the Industrial Sectorof Pakistan.Purpose/coverage: The aim of the Plan is to expand and upgrade the T&D network so as to allowthe system to absorb excess RE power produced by QIFs in a timely manner and at the least cost. Itshall cover voltages from 11 kV up to 132 kV.Priority shall be given to the economically-viable REpower projects identified in the EPAP (P1).Key elements of the Plan and the guidelines on their formulation and design:Eligibility: Applicable only to QIF.Output capacity of RE power projects: Specify the minimum capacity of the industrial RE-basedpower system that will be allowed to connect to the grid, where grid expansion is required.The maximum capacity allowed will depend on the available T&D line where the RE project willconnect.As an example, India designed an Intra State Transmission System to secure the gridintegration of large scale RE projects.Monitoring of RE power projects: Incorporate in the annual electricity demand forecast and supply-demand scenario all the planned, under-construction and newly commissioned RE power projectsfrom QIF. Thailand regularly monitors grid capacity and upgrades the system to absorb additionalRE power. All five studied countries have similar procedures. 130

Reporting of RE power projects: All RE power projects developed by QIFs in all their stages shallbe reported for incorporation to the monitoring system as early as possible. Only RE projectsreported within the cut-off periods will be included in the forecasts.Required data: The maximum capacity of excess power to be sold to the grid, the planned route ofthe expansion, the connection point and the voltage level should be clearly indicated by theapplicant.Funding and tariff setting: Applicants must indicate their intention or option to undertake the costof the expansion of the T&D, the cost coverage and the cost recovery mechanism. Other fundingoptions will also be specified. In China, grid connection costs for RE-based plants are shoulderedby the utilities through subsidies from GOC. In the Philippines, all T&D expansions areincorporated in the rate recovery.Scheduling of installation and completion: Expansion plans upon approval shall have fixedduration of completion in line with the power plant commissioning.Mandate/Tasks and responsibilities:The following tasks are to be implemented to support thedesign and formulation of the Plan:NTDC/DISCOs:  Establish T&D expansion plans, demand forecasts and supply-demand scenario with RE projects from QIF, technical standards, application procedures and checklist of requirements for QIF applicants.  Design and facilitate a fast-track Grid Interconnectivity (Impact) Study to assess the baseline grid situation and potentialities for T&D expansion and other similar studies, licenses and permits.  Receive and process applications for connections from QIF and sign off-take agreements in a timely manner.  Implement the T&D expansion plan in line with the RE plant commissioning.  Design and formulate the Plan for approval by GOP.NEPRA:  Establish guidelines and mechanism for the recovery of cost of T&D expansion and upgrading for QIF in the least cost manner. External, funding, grants and other incentives should be considered.  Issue generation permits and other similar licenses in a timely manner in line with the RE plant planning and commissioning.The GOP (i.e., the MOWP, together with other concerned ministries):  Create an inter-agency committee to develop the Program/Scheme that will include NEPRA, NTDC/DISCOs.  Conduct consultation meetings with key stakeholders on the formulation of the Plan.  Allocate sufficient budget and funding to cater for the T&D Expansion Plan.  Approve the Plan. 131

Timeframe:NTDC/DISCOs and NEPRA should develop the policy within 3 to 6 months from approval of thepolicy recommendations.The design and formulationof the policy should be completed within 1 to2 years (depending on the completion of the Economic Potential Assessment Program).P3. Formulate a regulatory policy that regularly sets the target for utilization of RE forpower and/orheat generation in the industrial sector, and promotes the use of RE in theindustrial sector through attractive tariff-related mechanisms such as feed-intariff (FIT),competitive biddingand net metering.Title: RE Target and Tariff-Related Mechanisms for IndustriesA) RE TargetPurpose/coverage: The RE target shall promote the use of RE resources and reduce dependencyon fossil fuels by industries. It is expected that as the cost of RE generation is becoming on par orcheaper than other conventional sources, meeting and exceeding the RE target will eventuallyreduce the cost of electricity for consumers and industries.The RE target being recommended shallcover specifically the utilization of RE resources for power and heat in the industrial sector.Key elements of the Program and guidelines on their design and formulation:RE technologies: The RE target shall be set for each RE technology, based on the results of theeconomic potential assessment conducted in P1..Timing of the RE target: The RE target for industries shall include the most appropriate timing thatwill be incorporated in their nationwide goals and development plans. Based on experience fromChina, India and Thailand, RE targets for the industrial sector were set for short-term (5 years) ormedium-term (10 years) periods. With the recent fast development of RE technologies particularlyin solar, the RE targets have to be monitored and adjusted.Principles for RE target setting: The RE targets for industries shall be defined, based on evaluatingthe balance between the costs of achieving them and the benefits of using RE sources for powerand/or heat generation in the industrial sector. The benefits of RE adoption in terms of GHG andcarbon emission reduction shall also be considered. The RE targets can be defined as thepercentage/amount of increase in power and/or heat utilization using RE resources orpercentage/amount of RE economic potential utilized.AEDB shall decide whether the RE targetwill be set for each industrial site or for the whole industrial sector. Based on experience fromChina and India, RE target was set for each RE technology for the whole industrial sector (forexample,India has set a target to install 50 gasifiers for decentralized power generation in rice millsand other industries for the 2015-2020 period.Types of RE target:AEDB shall decide whether the RE targets will be voluntary or compulsory. 132

Mandate/Tasks and responsibilities:The following tasks are to be implemented to support thedesign, formulation and establisment of the Policy:AEDB:  Determine the RE technologies to be prioritized, based on the results of the Economic Potential Assessment Program (P1);  Determine the appropriate timing of RE targets;  Evaluate the balance between the costs of achieving the RE targets and the benefits of using RE for heat and power in the industrial sector, and set the RE targets;  Design and formulate RE targets for industries for approval by GOP.The GOP (i.e. MOWP together with other concerned ministries):  Conduct consultation meetings with key stakeholders on the formulation of the policy.  Approve RE targets for industries.Timeframe:AEDB shall develop the policy within 3 to 6 months from the approval of the policyrecommendations.The design and formulation of the policy shall be completed within 1 to 2 years(depending on the completion of the Economic Potential Assessment Program).B) Tariff-RelatedMechanismsPurpose/coverage: The tariff-related mechansims (FIT, competitive bidding, net metering)areused to meet the RE targets for industries. These mechanisms are applicable for all REtechnologies and industries which are included in the RE targets.Key elements of the Program and guidelines on their design and formulation:New tariff-related mechanisms shall be developed for RE technologies applicable to the industrialsector of Pakistan with a focus on RE technologies included in RE targets.The following guidelinescan be used for designing and formulating the new tariff-related mechanisms:Eligible system size: Specify the minimum and maximum size of the system that could connect tothe utility and avail of the FIT scheme. Stipulate the limit of the aggregate capacity of the systemsthat will be contracted to avail of the FIT scheme, for instance, stipulated in terms of total MWcapacity. In Thailand, the success of the RE development came from private investors under twoschemes: SPP with a sale capacity of 10 MW up to 90 MW and VSPP with a sale capacity of up to10 MW.FIT rate: Stipulate the tariff rate for the purchase of power from the QIF for every unit (kilowatt-hour) of electricity delivered to the grid. The scheme shall be clearly delineated based on (i)technology, (ii) size of the system, (iii) geographical area and (iv) time of delivery, among others.The policy shall specify whether the rate offered is (i) fixed or based on a (ii) formula, which shallclearly indicate the calculation procedures and the parameters involved. RE generation grew 133

remarkably through the introduction of attractive FIT in the studied countries. Some best practicesthat can be adopted from the studied countries are as follows:  China:(i) techno-economic performance of different RE technologies, (ii) geographic location of the project, and (iii) availability of RE resources were used.  India: FIT is combined with net metering for solar rooftops.  Thailand: FIT premium are offered to more depressed provinces and use of bio-energy for power generation.  Philippines:FIT Tariff Allowance Fund was established to ensure RE producers are paid.Duration: Stipulate the duration of the contract between the seller of electricity and the utility forthe applicable FIT. If periodic reviews of the tariff will be made to reflect certain changes inparameters such as inflation rate, the occurrence of these periodic reviews shall also be specified.In China and the Philippines, FITs are regularly adjusted based on the RE targets, prevailing cost ofproduction and other market forces.Guidelines and procedures: The following guidelines and procedures shall be developed:  Guidelines and procedures for FIT application and implementation for industry-based RE power projects,  Guidelines and procedures for competitive bidding implementation for industry-based RE power projects, and  Guidelines and procedures for net metering implementation for industry-based RE power projects.Mandate/Tasks and responsibilities:The following tasks are to be implemented to support thedesign, formulation and establisment of the Policy:AEDB and NEPRA  Establish new tariff-related mechanisms for industry-based RE power projects.  In consultation with NTDC/DISCO and other stakeholders, to set the guidelines and procedures that are deemed appropriate and necessary for the full implementation of the newly-established mechanisms.  Determine the amount and source of the budget to be allocated for the FIT scheme.  Design and formulate the policy for approval by GOP.The GOP (i.e. MOWP together with other concerned ministries):  Conduct consultation meetings with key stakeholders on the formulation of the policy.  Approve the amount and source of budget and allocate sufficient funding for the implementation of the policy.  Approve and promulgate the policy.Timeframe:AEDB and NEPRA shall develop the policy within 3 to 6 months from the approval of the policyrecommendations.The design and formulation of the policy shall be completed within 1 to 2 years. 134

P4. Develop a program or scheme to provide fiscal and financial incentives to projectsutilizing RE resources in the industrial sector. The program should include the developmentand promotion of alternative business models for RE power projects in the industrial sector.Title of the Program/Scheme: Renewable Energy Incentive Program for the Industrial Sectorof Pakistan.Purpose/coverage: The Program aims to reduce the high specific investment costs of industry-based RE projects, improve their financial performance, and make them more commerciallyattractive to the industrial facility owners and investors through a provision of fiscal and financialincentives. The Program will also provide suitable incentive support to QIF. The program shallinclude the development and promotion of alternative business models for RE power projects in theindustrial sector.Key elements of the Program and guidelines on their design and formulation:Duration of the Program. It is suggested that the Program/Scheme is first implemented over aperiod of 3 to 5 years. The impact shall be monitored and further modification or extension shall beimplemented. In China, the CREDF raised surcharges levied from electricity consumption fourtimes since 2006 to finance capital incentives and others.Types of incentives to be included in the Program. Based on the experience from the five studiedcountries (see Table 45), the following types of incentives can be used:  Financial incentives: investment grant/subsidies, financial subsidy, tariff subsidy, loan guarantee, and tradable carbon credit.  Fiscal incentives: accelerated depreciation, exempted/reduced VAT, and exempted/reduced land use fee.Magnitude (level) of incentive. Based on the experience of the five studied countries, the followingassessments shall be conducted to define the magnitude of incentives included in the Program:  Economics of RE projects, i.e. how much are the incentives needed to help the RE projects reach their expected performance (rate of return on investment, payback period, etc.). For example, the level of financial incentives (soft loan, investment grant) in Thailand was defined based on the criterion that investments in RE projects shall be paid back within 7 years.  Impact of the incentives on RE adoption in the industrial sector and on GOP budget (e.g. tax revenues for GOP for the case of fiscal incentives).Eligibility for receiving incentives. GOP can consider setting the following eligibility criteria forthe QIF to receive incentives from the Program (based on experience from India for funding fromNCEF):  using high-efficiency, high-quality equipment (e.g. high-pressure cogeneration technology in sugar mills)  sponsored by a ministry/department of the GOI,  submitted by QIF, and  including a minimum of 40% of total project cost contributed by the QIF. 135

Procedures and guidelines for granting fiscal and financial incentives. A support documentshouldinclude the following key issues:  Administration of the RE Incentive Program,  Eligibility for incentives,  Incentive application procedures, including application form templates,  Procedures and criteria for evaluation of incentive applications,  Procedure and criteria for incentive award,  Incentive award contract/agreement,  Guidelines on project monitoring and reporting.Sources of budget/fund for the incentives. The following sources of budget and funds can beconsidered for providing incentives to RE projects in the industrial sector of Pakistan:  For fiscal incentives: GOP budget,  For financial incentives (investment grant/subsidy, financial subsidy, tariff subsidy): create a National Fund,similar to theENCON Fund of Thailand, the National Clean Energy Fund of India and/or the RE Development Fund of China.This National Fund can be created and funded by (i) grants from GOP, (ii) assistance and grants from local and international agencies, and (iii) tax levies on fossil fuels and electricity consumption (e.g. tax levy on petroleum products in Thailand, on coal in India, or surcharges levied on electricity consumptionin China).Alternative business models:A study of alternative business models for the development andoperation of RE projects that could be applied to QIF shall be conducted. Most suitable models willbe promoted through support such as technical assistance and/or incentives. Based on theexperience of India, common models to be studied are as follows:  Public Private Partnership such as Build-Own-Operate-Transfer (BOOT), Build-Own-Operate (BOO), and Build-Operate-Transfer (BOT), Build-Own-Lease-Transfer (BOLT);  Multiparty Ownership or Joint Venture (JV).Mandate/Tasks and responsibilities: The following tasks shall be implemented to support thedesign, formulation, establisment and operation of the Program:Inter-Agency Committee led by AEDB:  Conduct a study on the different incentive options, and their impact on RE development in the industrial sector and on the GOP budget (i.e., tax revenue).  Design the modalities for the selected incentive options and obtain approval from the relevant authorities.  Develop mechanisms and procedures for granting fiscal and financial incentives to QIF.  Conduct a study and recommend to GOP the sources of the budget/fund for deployment of the incentives.  Conduct a study on suitable support mechanisms for RE projects that are developed through alternative business models (e. g. JV, BOOT, BOO, BOT, BOLT)  Design and formulate the RE Incentive Program/Scheme for approval by GOP.The GOP (i.e., MOWP/MOIP/Ministry of Finance (MOF) and other concerned ministries): 136

 Conduct consultation on the Program/Scheme with relevant stakeholders.  Create an inter-agency committee to develop the Program/Scheme that will include AEDB, FBR, Customs, etc.  Approve the budget and allocate sufficient funding for the deployment of the incentives, and establish the Program/Scheme.  Approve the policy.Timeframe:The inter-agency led by AEDB should start the development of the Program/Scheme within 3 to 6months after approval of the policy recommendation.The design and formulation of theProgram/Scheme should be completed within 6 to 12 months.P5. Create a program that will establish a One-Stop Agency to centralize, coordinate andhelp streamline the licensing process by and reducing the processing time. The agency will bethe focal point for communication and coordination among key RE stakeholdersTitle of the Program: Pakistan Renewable Energy One Stop Agency for IndustriesPurpose/ Coverage: The One-Stop Agency shall be created to provide a fast, simple, transparentand integrated issuance of licenses and permits for RE projects of the QIF in a single location. Thewhole procedure could also be done online. The program is expected to reduce costs and delays inprocessing the required permits and will speed up the project development and improve theinvestment climate on RE projects in industry in Pakistan. It shall facilitate communication andcoordination with RE stakeholders on policies and regulations regarding RE development andimplementation. The One-Stop Agency will encompass the licensing requirements for RE-relatedproject development, implementation and operation for the whole country and all sectors, includingthe industrial sector.Key elements of the Program and guidelines on their design and formulation:Host: It is suggested that the One-Stop Agency is hosted by AEDB. Examples from studiedcountries are as follows:  Philippines (DOE): Energy One-Shared System (EVOSS) under ongoing RE One-Stop-Shop,  Thailand (BOI): One Stop Center,  India (MNRE): The Alternative Energy and Efficiency Information Center / One Stop Shop.Management: A Director shall head the Agency and be supported by at least an IT specialist withgood communication skills who will maintain an online application and its processing.Role and responsibilities: The management team will manage the inception, implementation,coordination and monitoring activities of the One-Stop Agency. The management will handle thecoordination and assistance to the QIF representatives, but the representatives of the respectiveagencies that are issuing the licenses and permits shall handle the lodging and processing of theapplications. 137

Processing of applications: QIF representatives requiring licenses and permits for theimplementation of RE projects in the industrial sector may submit applications online or atcounters where questions could be answered and guidance and assistance provided during theapplication process.Activities and Assistance to Industries: The activities of the One-Stop Agency shall include, but notbe limited to the following: a. designing the flow of the applications that will be handled within the One-Stop Agency; b. streamlining the number of licenses and signatories; rationalizing and streamlining the procedures; c. determining the maximum duration for approval of the licenses; d. creating a database system for monitoring of the applications and their results; e. promoting the One-Stop Agency and disseminating its successes; f. create a protocol and act as a focal point for the communications and coordination among RE stakeholders.Permits and licenses: The One-Stop Agency shall be in processing and issuance of the following: a. Environmental Compliance Certificates (IEE/EIA), b. Grid Interconnectivity (Impact) Study, c. Generation License, d. Award of Upfront Tariff, e. Issuance of Letter of Support, f. Energy Purchase Agreement (EPA), g. Implementation Agreement (IA), h. Final Closure, i. Letter of Intent (LOI), j. Building permits including heat pipelines, biogas plants, etc., k. Construction and Operation permits, l. Regulations on use of biomass/biogas feedstocks, m. FIT tariff permits/certificates/contracts, n. Net metering agreements, o. Local administration clearances, p. Others.Website: A web-based application and monitoring system shall be developed for RE projectapplications, information and permits aimed to facilitate and streamline the process of REapplications and licensing. The system shall provide an interactive system that will allowcommunication, consultation, feedback and question and answer from applicants.Budget/Funding of the Agency: Based on the experience from other countries, GOP, throughMOWP should allocate a budget for the operation of the One-Stop Agency. The operating budgetof the Agency shall be prepared annually, and submitted to the GOP for approval. However, AEDBshall coordinate with international and local donors for raising funds for the Agency, especially forsome specific public awareness campaigns and for producing information materials. Sponsors fromdifferent organizations or companies should be sought. In the Philippines, EVOSS is being funded 138

by USAID. After a few years of operation, the Agency will be asked to prepare a sustainabilitybusiness plan for the transition to a more sustainable operation.Mandate/Tasks and responsibilities:The following tasks are to be implemented to support thedesign, formulation and establisment of the Program:Inter-Agency Committee led by AEDB:  Design the organizational/management structure of the Center.  Centralize and coordinate with other government agencies and local administrations the acquisition of permits and streamline and rationalize the licensing procedure for QIFs such as (i) Conduct a study on the current licensing requirements, their procedures and the timeframe for approval, and analyze the ways the streamline them; (ii) Create a program that will centralize and coordinate with other government agencies and local administrations the application and approval of permits and streamline the licensing procedure for QIFs; (iii) Propose suggestions for the streamlining and fast-tracking of licensing procedures and have them approved by relevant authorities; and (iv) Process applications according to streamlined procedures and monitor progress of the applications.  Establish the protocol for the communication, coordination and consultation among RE stakeholders on matters related to RE policies and regulations.  Plan the activities of the Center.  Establish the Pakistan RE One-Stop Agency and oversee its operation.  Determine the budget and source the funds for the sustainable operation of the Center.  Endorse the annual budget for GOP approval.  Design and formulate the program for approval by GOP.The GOP (i.e., MOWP and other concerned ministries):  Conduct consultation about the Agency with relevant stakeholders.  Create an inter-agency committee to develop the Program/Scheme that will include AEDB,NTDC/DISCOs, NEPRA, CPPA, EPA, etc.  Issue a mandate to all agencies concerned with issuing the licenses and permits for RE projects to coordinate and work with the one-stop agency in centralizing the licensing processes and streamlining the procedures.  Approve the establishment of the One-Stop Agency.  Approve the annual budget of the One-Stop Agency.Timeframe:AEDB should start the development of the Agency within 3 to 6 months from approval of thepolicy recommendation. The design and setting up of the One-Stop Agency should be completedwithin 6 to 12 months.P6. Create a program that will establish a RE Knowledge Center to support the deploymentof RE technologies. The Center will also be responsible to collect information, createawareness, share knowledge, and build capacity on RE technologies for local RE technologymanufacturers, R&D personnel, O&M service providers and other stakeholders.The 139

program will include the provision of funding and incentives to support the activities of theCenter and build the capacity of the stakeholders.Title of the Program: Pakistan Renewable Energy Knowledge CenterPurpose/coverage: The Pakistan RE Knowledge Center shall promote the deployment of REtechnologies in the industrial sector of Pakistan by creating awareness, developing knowledge andbuilding capacity of all relevant stakeholders.Key elements of the Program and guidelines on their design and formulation:Host: AEDB or an established agency within MOWP that has a strong mandate related to humanand institutional capacity building may host the Center.This is based on lessons learned from other studied countries. In China, the Center is hosted by agovernment agency, the Chinese RE Industries Agency. In India, MNRE leads the RD&Dactivities, training (scholarship/fellowship) in RE R&D, knowledge development and fund raising.MNRE has introduced in their 12th Five-Year Plan Period a Human Resources Development(HRD) Program in New and Renewable Energy. In Thailand, DEDE promotes RE deploymentthrough the Bureau of Human Resource Development (BEHRD) and the Alternative Energy andEfficiency Information Center.Management: The Center shall be headed by a Director to be supported by dedicated personnelcomprising at least an IT specialist and three specialists of major RE technologies applicable to theindustrial sector (such as solar and its variations, biomass/biogas/MSW and wind) with goodcommunication and training background. Relevant external service providers or experts will behired on-need basis for producing information material for dissemination and capacity buildingactivities. PCRET, REAP and other educational or research institutions can be involved inexecuting the knowledge development activities.Role and responsibilities: The Center will act as:  the think tank of Pakistan on RE technology for industrial sector applications;  the knowledge depository and information provider covering all aspects of RE technology, production and utilization in the industrial sector of Pakistan.As such, its responsibilities will encompass the following aspects: + Create awareness on the benefits, opportunities, production and utilization, among others, of RE through awareness campaigns and suitable information media; + Collect, store and disseminate information on RE matters to stakeholders; + Build capacity of relevant stakeholders such as local RE technology manufacturers, R&D personnel, O&M providers, consultants, government officials and other stakeholders of RE technologies, through the conduct of training, workshops, seminars, site visits, study tours and other activities. + Develop capability in R&D, manufacturing, implementation and O&M of RE technologies and projects. So far, some R&D programs are carried out in biogas and small wind turbine technologies. This needs to be expanded also to high potential RE technologies in the industries. 140

+ Develop and recommend incentives, whenever appropriate, to local companies to promote local manufacturing and R&D.Information collection. To reduce the operating costs of the Center, information in digital format(text files, photos, videos, etc.) will be prioritized in the collection effort. The information willinclude, but not limited to:  Latest news and events on RE local and international applicable to industries;  RE training programs for local manufacturers, R&D personnel, O&M providers, and other stakeholders of RE technologies;  Job opportunities;  Publications, books and reading materials;  International & local assistance & funding, RE financial support for R&D;  Government & private funding, support and incentives for local manufacturers.Information processing and storage. The collected information will be stored in computers in theiroriginal forms or after some processing. The Center therefore shall be equipped with sufficientequipment and software for producing high-quality information products, such as videotapes,brochures, posters, stickers.Information dissemination. Information will be disseminated through meetings, media (television,newspapers, advertisement posters on buses, etc.), exhibitions, websites and social networks. Themost common forms used in the five studied countries are website and television. The Center shallcreate a website that will publish the latest information on RE technologies and their adoption inthe industrial sector of Pakistan. The system shall provide an interactive portal that will allowfeedback and Q&A. A sample of a web-based Knowledge Exchange Platform (KEP) in India in EEcan be found at http://knowledgeplatform.in/about-kep/. A similar web-based KEP in India for REbeing managed by private RE practitioners can be found at https://trexergy.wordpress.com/about/.A National RE Database can also be developed in a similar way as in the Philippines.Service fees for information access. It is suggested that the information access will be free ofcharge.Capacity building activities and financial assistance. The Center shall institutionalize REeducation and training in a similar way as China, India and Thailand. The Center shall set actionplans and conduct training on RE. This will include financial assistance for the conduct of short-term training programs as being done in India and through the ENCON fund in Thailand.Budget/Funding of the Center. Based on the experience from other countries, GOP, throughMOWP should allocate a budget for the operation of the Center. The operating budget of theCenter shall be prepared annually, and submitted to the GOP for approval. However, AEDB shallcoordinate with international and local donors for raising funds for the Center, especially for somespecific public awareness campaigns, for producing information materials and for capacity buildingactivities to eligible companies and individuals. Sponsors from different organizations orcompanies should be sought. After a few years of operation, the Center will be asked to prepare asustainability business plan for the transition to a more sustainable operation. 141

Mandate/Tasks and responsibilities:The following tasks are to be implemented to support thedesign, formulation, establisment and operation of the Pakistan RE Knowledge Center:AEDB:  Design the organizational/management structure of the Center.  Plan the activities of theCenter.  Design and formulate the policy for approval by GOP.  Establish the Pakistan RE Knowledge Center and oversee its operation.  Determine the budget and source the funds for the sustainable operation of the Center.  Endorse the annual budget for GOP approval.The GOP (i.e., MOWP and other concerned ministries):  Conduct consultation about the Center with relevant stakeholders.  Approve the establishment of the Center.  Approve the annual budget of the Center.Timeframe:AEDB should start the development of the Center within 3 to 6 months after approval of the policyrecommendation. The design and setting up of the RE Knowledge Center should be completedwithin 6 to 12 months.P7. Formulate a policy to establish required standard procedures for gender mainstreamingin industrial RE initiatives and projects, to support women’s economic and entrepreneurialdevelopment opportunities, and ensure a gender balance in policy development, planning,decision-making and leadership including quotas for women at all levels.Title of the policy: Policy on Gender Mainstreaming in Industrial RE Initiatives and Projectsin PakistanPurpose/coverage: Improved sustainability and benefits through inclusion of different groups ofpeople in all industrial sector RE initiatives and projects in Pakistan.Key elements of the Policy and guidelines on their design and formulation:Gender impact assessment. RE policies shall establish required standard procedures for gendermainstreaming in industrial RE initiatives and projects:  Establish a gender analysis/impact assessment followed by the formulation of specified gender targets and indicators in any RE initiative or project;  Establish a gender-separated monitoring and evaluation system for tracking the extent of economic and non-economic impacts and benefits for different target groups, both men and women;  Allocate specified and earmarked human and financial resources for enhancing women- focused economic activities in any RE initiative. 142

Support to women involved in RE sector. RE policies shall support women’s economic andentrepreneurial opportunities:  Establish quotas and special educational programs for training women in RE technology and organize capacity building programs for women;  Establish quotas for women to be trained and employed in RE programs and projects;  Establish mechanisms and support systems for female graduates in engineering for working in the RE sector and for remaining in the work even when married;  Establish special incentives and programs supporting women’s business start-ups and business development in the RE sector, including loan programs.Gender balance requirements. RE policies shall be gender balanced in policy planning, decision-making and leadership:  Establish quotas for women and develop mechanisms to increase the number of women in RE policy development organizations and decision-making bodies;  Target recruitment of women and establish quotas for women in management and leadership positions in the RE sector;  Establish a gender focal point/ gender officer position in policy development and decision- making bodies;Mandate/Tasks and responsibilities:The following tasks are to be implemented to support thedesign, formulation and enforcement of the Policy:AEDB, in collaboration with other relevant agencies (i.e., Women Development Departments,Center for Gender and Policies Studies, Women Chambers of Commerce and Industry, SocialPolicy and Development Center):  Conduct gender-impact analysis.  Assess the capacity building needs of women in RE aspects.  Develop mechanisms and procedures for gender mainstreaming in industrial sector RE initiatives and projects.  Design mechanisms and support systems for women involved in RE sector.  Formulate the Policy for approval by GOP.The GOP (i.e., MOWP/MOIP and other concerned ministries):  Conduct consultation on the Policy with relevant stakeholders.  Approve and promulgate the Policy.Timeframe:AEDB should start the development of the Policy within 3 to 6 months after approval of the policyrecommendation. The development of the Policy should be completed within 1 to 2 years. 143

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