Battery Recycling Arrangements under IDCOL’s Off-grid Solar Home Systems Program - Formanul Islam

Battery Recycling Arrangements under IDCOLs Off-

grid Solar Home Systems Program

S. M. Formanul Islam

Deputy CEO

Infrastructure Development Company Limited

April 2013

About IDCOL

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GoB adopted the National Energy Policy in 1996 to promote Public-Private Partnership in the power sector.

In 1997, GoB undertook the Private Sector Infrastructure Development Project (PSIDP) with support from the World Bank (USD 225 million)

In the same year, Infrastructure Development Company Limited (IDCOL) was established as a non-bank financial institution to channel the fund towards private sector infrastructure projects.

IDCOL is fully owned by the GoB and managed by an eight-member Board of Directors appointed equally from the public and private sectors.

It had successfully financed a 450 MW Combined Cycle Power Plant in 2001 under PSIDP.

Thus far, IDCOL has financed 1,100 MW power plants, five telecom companies, several ICT projects and two land ports, in addition to renewable energy programs.

www.idcol.org

An Overview of IDCOLs SHS program

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Govt. undertook REREDP in 2002 with support from the World Bank and GEF with

a provision for financing 50,000 SHSs in off-grid areas through NGOs, MFIs and

Private Companies.

The initial target was achieved in 2005, 3 years ahead of the deadline and USD 2

million below the estimated cost.

Subsequently, IDA provided additional funds and GIZ, KfW, ADB and IDB extended

support . Recently, JICA has also joined the league.

Till February 2012, more than 2 million SHSs (90 MW) have been installed in the

off-grid areas

The target is to finance 4 million SHSs by 2015

At present, monthly installation rate is more than 60,000 SHSs

A total of 47 partner organizations are implementing the program

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Lead-acid battery is the key element of SHS.

12 local and 1 foreign manufacturers are supplying batteries under the

program.

Sulphuric acid and lead are major components of lead-acid battery.

About 6-7 liters of sulphuric acid is required for a 30 AH solar battery.

About 50% sulphuric acid remain unutilised after expiration of the

battery.

About 4 kgs. of lead is required for a 30 AH solar battery.

About 60-70% lead can be extracted from the expired battery.

Lead Acid Battery Recycling

There are two types of battery recycling practices in Bangladesh

Formal Sector- There are four Govt. licensed battery recyclers in Bangladesh

They have a total capacity of recycling 1,500 Tons of lead per month.

Informal Sector According to Bangladesh Accumultaors and Battery

Manufacturers Association, they need to depend on informal sector for only 500 Tons of lead against the national demand of 2000Tons

But currently informal sector provides more than 50% of required lead because the formal sectors in most cases do not run their plants in full capacity.

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Battery Recycling in Bangladesh

Environmental pollution: Air and water pollution due to emission of lead-oxide and haphazard disposal of sulphuric acid.

Health Safety: as the informal sector is operated by inexperienced staff without protective gears, health hazard is a common concern for the workers.

Commercial aspects: Due to application of traditional technology, the rate of extracting lead is low, which is an important commercial concern.

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Risks Associated with Recycling of Batteries through Informal Sector

Price-from various studies, it has been found out that informal recyclers in most cases give higher financial incentives than formal recyclers.

Communication and collection - as the informal recyclers engage the local people, they have better communication with the customers resulting in better collection of batteries.

Lack of awareness- lack of awareness among the people about the impact of improper recycling from environmental and health safety point of view.

Easy Payment direct cash payment made by the informal recyclers is more lucrative for the customer.

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Challenges to Control Informal Sector

GoB has adopted a Battery Recycling Policy in 2006 for collection and recycling of used/non-functional batteries. The salient features of this Policy are:

Obtaining NOC from the Department of Environment before starting breaking and smelting of batteries;

Prohibition to dump expired batteries indiscriminately;

Obligation to handover the expired battery to approved vendors;

Requirement for battery dealers to sell new batteries against expired batteries.

The GoB amended the policy in February 2008 allowing payment for returning used/non-functional batteries

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Govt. Initiatives for Battery Recycling

In 2005 , IDCOL adopted policy guidelines for disposal of expired batteries. The salient features included:

POs to set-up a collection system of expired batteries and hand them over to the manufacturers/recyclers;

It defines detailed collection process of expired batteries;

It provides for satisfactory battery recycling process;

It requires that batteries will be manufactured in a environmentally safe manner;

According to this Policy, the consumer has to sell the expired battery only to the PO, not to any third party.

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IDCOLs Battery Recycling Arrangements -1

Introducing Buy-back Agreement in 2008. It is an agreement signed between PO and Battery manufacturers. The salient features of this agreement are:

Customer Notification PO shall notify the customers before 3 months of the warranty expiration date

The customer is free to continue using the existing battery after warranty period, if the status of the battery is OK.

The customer will be required to inform the POs representative when s/he would stop using the battery after the expiration of warranty period.

Collection of expired batteries by PO

PO representatives collect the batteries from the customers and store it in the local offices.

PO takes necessary measures to ensure safe storage of the batteries.

The batteries must be collected within 30 days after the notice.

The PO representative will ensure safe collection

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IDCOLs Battery Recycling Arrangements -2

Collection of expired batteries by recyclers/manufacturers

Battery manufacturers/recyclers will collect the batteries from the regional locations and ensure safe transportation of the batteries to the recycling plant.

Currently, the battery manufacturers pays 24% of the current market price of new batteries to the POs for exchange of warranty expired batteries of similar size at their regional collection points.

Both the parties sit in every six months to review the buy-back price. IDCOL facilitates the meeting.

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IDCOLs Battery Recycling Arrangements -3

Incentives- IDCOL pays financial incentive up to USD 10 per battery equally to the

battery recycler for recycling of warranty expired batteries and POs for collection of the same up to 1,00,000 batteries.

Refinance- If the PO extends loan facility for selling new battery in place of

warranty expired battery, it will receive up to 100% of loan amount, which will not exceed USD 100.

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IDCOLs Battery Recycling Arrangements -4

IDCOL has also adopted following measures to ensure environmentally safe recycling by the formal recyclers:

IDCOL has en-listed three battery recyclers as they have successfully complied with ISO 14001:2004 and OHSAS 18001:2007

The recyclers must have proper effluent treatment facility

The recyclers must have proper air treatment facility

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IDCOLs Initiative to Control Battery Pollution