0 Republic of Lebanon Ministry of Energy and Water Lebanese Center for Energy Conservation LARGE SCALE SOLAR WATER HEATER MARKET DEVELOPMENT PROGRAM IN LEBANON ( REPORT PREPARED UNDER A WORLD BANK-SUPPORTED ACTIVITY WITH THE LEBANESE MINISTRY OF ENERGY AND WATER AND THE LEBANESE CENTER FOR ENERGY CONSERVATION) DRAFT World Bank June 2011 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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Republic of Lebanon Ministry of Energy and Water
Lebanese Center for Energy Conservation
LARGE SCALE SOLAR WATER HEATER MARKET DEVELOPMENT PROGRAM IN LEBANON
( REPORT PREPARED UNDER A WORLD BANK-SUPPORTED ACTIVITY WITH THE LEBANESE MINISTRY OF ENERGY AND WATER AND THE LEBANESE
CENTER FOR ENERGY CONSERVATION)
DRAFT
World Bank
June 2011
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Large Scale Solar Water Heater Market Development Program in
Lebanon
TABLE OF CONTENTS
Executive Summary 5
1. Introduction 11
2. Electricity Supply and Demand Situation 13
3. Role and Importance of Hot Waters Heaters 14
4. Solar Radiation 16
5. Market Availability of SWH 17
6. Technical and Commercial Potential for SWHs 18
6.1. Solar Water Heater Technologies 18
6.1.1. Type of Solar Water Heaters Systems 19
6.1.1.1. Direct and Indirect Systems 19
6.1.1.2. Passive and Active Systems 21
6.1.1.3. Passive Direct Systems: ICS and CHS 22
6.1.1.4. Active Indirect Systems: Drain back and Antifreeze 22
6.2. Residential and Tertiary Sectors 23
7. Assessment of resources for local manufacture, imports, costs and installation
practices for SWHs 24
8. LCEC‟s and Other Donor Funded Initiatives in the area of SWHs 24
9. SWH Standards in Lebanon 27
10. Implementation Mechanisms for SWH Standards and Associated Regulatory
Approaches To Strengthen Compliance 27
11. Review of Financial Incentives Available for SWHs in the Lebanese Market 27
12 Proposed Programmatic Framework for Large Scale Deployment of Individual 28
SWH Systems in the Residential Sector 28
12.1 Short-term and Long-term Goals 28
12.1.1 Phase 1 Program (2011-2014) for Short-term Goals 28
12.1.2 Phase 2 Program (2015-2020) for Long-term Goals 29
12.2 Conditions of Eligibility of Suppliers, Installers and Products 32
12.3 Supporting Financial Incentives and Innovative Mechanisms 32
12.3.1 Mechanics of the BDL/ NEEREA Financial Incentive Scheme
12.4 Institutional Coordination and Management for the Implementation of the
SWH Scale Up Programs 35
12.4.1 Role of Ministry of Energy and Water
12.4.2 Role of Lebanese Center for Energy Conservation 35
2
12.4.3 Role of Project Management Unit within LCEC 36
12.4.4 Role of BDL through commercial Banks 37
12.4.5 Role of others Stakeholders 37
12.4.6 Role of Suppliers of SWHs 38
12.4.7 Role of Clients 38
12.5 Financial and Economic Analysis: Economic rate of return of SWH 39
12.5.1 Cost of Proposed Program (Phase 1: 2011-2014) 40
12.5.2 Financing Scheme of the Proposed Program 41
12.5.2.1 Benefits to Consumers and Utility 41
12.5.2.2. Environmental benefits 42
13. Proposed Programmatic Framework for Large Scale Deployment of Collective
SWH systems in residential and tertiary sectors in urban areas 42
13.1 Short and long term-goals 43
13.2 Structure of the Program (eligibility of suppliers, installers, products, etc,) 43
13.3 Financial Mechanism 43
13.4 Institutional and Stakeholder Responsibilities 44
13.5 Financial and Economic Analysis 45
13.6 Benefits to Consumers and Utility 46
13.7 Environmental Benefits 46
14. CDM/Carbon Finance Potential Benefits, Methodologies, and Approaches 47
14.1 CDM and Evolution of Carbon Markets 47
14.2 CDM Strategies and Approaches 48
14.3 Post-2012 Carbon Markets 50
14.4 CDM Methodology for Solar Water Heaters 50
15. Capacity Building and Dissemination 51
15.1 Capacity Building 51
15.2 Promotion, communication and awareness program 53
16. Monitoring and Evaluation Approaches 55
17. Conclusions 56
3
Annexes:
Annex 1: Tables of calculation
Annex 2: List of Contact Persons
Annex 3: Eligibility of Suppliers, Installers and Products
Annex 4: Technical Specification of Eligible Products
Annex 5: Copy of Intermediate Circular No 236
Annex 6: List of Lebanese SWH companies
Annex 7: SWH Presentation at the Workshop (to be added)
Figures
Figure 1: Electrical consumption per sector
Figure 2: Electrical consumption per end user
Figure 3: Climatic zones and solar radiation in Lebanon
Figure 4: Evacuated tube solar collector
Figure 5: Flat plate collector
Figure 6: Projected progress of the Program- Phase 1 (2011-2014)
Figure 7: Potential of SWH installed (m2) and energy saved (TOE): 2011-2020
Figure 8: Environmental Impacts of the Program
Figure 9: Institutional structure of management the Proposed Program
Figure 10: Economic impact of phase 1
Figure 11: Total potential of energy saved and CO2 avoided (2011-2020)
Figure 12: Interaction between main stakeholders for Collective SWH Systems
Figure 13: Total potential of energy saved and CO2 avoided Collective sector
Figure 14: Concept of the CDM
Figure 15: CERs issued by sector
Figure 16: Steps in the CDM project cycle
Figure 17: Approximate time line to CDM activity registration
Tables
Table 1: Electricity Tariff
Table 2: Global Radiation Data for Lebanon
Table 3: Market shares of Solar Panels in Lebanon in 2008
Table 4: Economic rate of return calculation
Table 5: Cost of the Proposed Program (US$ „000)
4
ACRONYMS
ABL: Association of Banks in Lebanon.
ALMEE : Association Libanaise pour la Maitrise de l‟Energie et l‟Environnement.
AUB: American University of Beirut
BDL: Banque Du Liban (Central Bank of Lebanon).
CDM: Clean Development Mechanism.
CO2: Carbon Dioxide
CRES: Center of Research of Solar Energy of Greece
EDL: Electricité Du Liban (Lebanese Electric Utility).
EU: European Union.
GEF: Global Environment Facility.
GHG: Greenhouse gas
GIZ : German Technical Cooperation (formerly GTZ)
GoL: Government of Lebanon.
IRI: Industrial Research Institute.
KW: Kilo Watt = power
KWh: Kilo Watt hour =energy.
LCEC: Lebanese Centre for Energy Conservation
LIBNOR: Lebanese Standards Institution.
LSES: Lebanese Solar Energy Society.
LU: Lebanese University
MEDEREC: Mediterranean Renewable Energy Centre (Italy).
MEW: Ministry of Energy and Water (of Lebanon).
MW: Mega Watt (power);
MWE: Mega Watt electric
MWh: Mega Watt hour (energy=1,000 KWh)
NEEAP: National Energy Efficiency Action Plan for Lebanon
NEEREA: National Energy Efficiency and Renewable Energy Action
SWH: Solar Water Heater
TOE: Tons Oil Equivalent
UNDP: United Nations Development Program
US$: American Dollar
5
Large Scale Solar Water Heater Market Development Program in
Lebanon
(Prepared under a World Bank-supported activity with the Lebanese Ministry of Energy and
Water and the Lebanese Center for Energy Conservation)
EXECUTIVE SUMMARY
1. This Report has been prepared by a World Bank team1 working under the “Lebanon
Energy Efficiency Standards and Regulations for Buildings” Project (P113858), which is
providing support to the Lebanese Ministry of Energy and Water (MEW) and Lebanese
Center for Energy Conservation (LCEC), a national energy organization for Lebanon which
is affiliated to the MEW to help design and implement national level projects and programs
in the areas of end-use energy conservation and renewable energy.2 One of the activities of
this World Bank-funded project was focused on solar water heaters (SWH). This SWH-
related activity was to provide support to LCEC in the following aspects: (i) Review the
existing SWH standards and regulations with regard to the quality of available local
manufactured systems, imported systems and installation practices and compare them with
best practices; (ii) Assess the potential financial and economic benefits through the use of
SWHs compared with conventional electrical heating in the context of a market where
electricity prices are subsidized and a parallel large scale private-sector managed back-up
generation market exists; (iii) Identify gaps in the existing standards and develop
mechanisms to enforce the standards; (iv) Develop a framework for scaling up the large
scale deployment of SWHs in the residential sector; and (v) Propose financial mechanisms
including specific incentives and potential carbon/climate financing, and propose regulations
that are appropriate to the Lebanese context, that will support the scaling up of the
installation of SWHs on either a voluntary or mandatory basis.
2. The Report draws mainly from findings of a World Bank mission to Lebanon in
February 2011, which met with LCEC and several other relevant stakeholders (a complete
list is provided in Annex 2), and review of existing reports published by LCEC and other
institutions and development partners in Lebanon. In this context, the February 2011
1 The World Bank team which conducted this work and prepared this Report comprises of Simon Stolp (Senior
Energy Specialist and Task Team Leader, World Bank Lebanon Country Office), Ashok Sarkar (Senior Energy Specialist, World Bank, Washington DC), and Naceur Hammami (Senior Energy Efficiency and Renewable Energy Consultant, World Bank). For questions and more information, please contact Simon Stolp at <[email protected]> 2 LCEC supports the Government of Lebanon to develop and implement national strategies that promote the
development of efficient and rational uses of energy and the wide spread application of renewable energy at the consumer level. LCEC is a financially and administratively independent body, and operates under the direct supervision of the Minister of Energy and Water. LCEC is also legally registered at the Ministry of Interior.
6
mission had focused mainly on further developing the understanding of the SWH sector, and
examining the practical and technical issues and constraints, barriers that exist specifically in
the Lebanese market, with respect to the large scale SWH market development in Lebanon.
The work presented in this report also draws from international experiences with different
approaches for increasing the deployment of SWHs, and the financial incentives and
mechanisms used therein. The overall objective of this Report is to develop a practically
implementable large scale SWH program in Lebanon, taking into account the Lebanese
market context and drawing upon international best practices and adapting them
accordingly.3
3. The benefits of large scale installation of SWHs in Lebanon are many. First, it will
help reduce consumer energy bills, which is especially important when consumers rely on
expensive back-up generation (due to unreliable grid supply) and it will improve the
reliability/availability of hot water supply. Second, from the utility Electricity du Liban
(EDL)‟s perspective, large scale implementation of SWHs will reduce electricity demand
and thus decrease the pressure on EDL‟s power system to supply. Reduced energy demand
will lead to fuel savings and a reduction in electricity generation operating costs, which EDL
is unable to recover from consumers due to subsidized tariffs and high technical and
commercial losses (>30% average). Finally, the fuel savings from the reduction in energy
demand on the grid will lead to lowered import bills and less fiscal pressure on the
Government on Lebanon.
4. Under the directions of MEW, and with support from United Nations Development
Program (UNDP) and other partner and stakeholders, LCEC has led the demonstration of
pilot level efforts to promote the use and installation of SWHs in Lebanon over the past
several years. Existing reports and studies estimate the total potential for SWH in the
residential sector to be 1.6 million sq. meters (m2).4 The Government of Lebanon through
MEW, and in cooperation with the Banque du Liban (Central Bank of Lebanon, BDL) has
embarked on a national energy efficiency program in 2009 to provide financial support to
various measures, including a solar thermal component for households and institutions
(hotels, hospitals, apartment buildings, others). The LCEC is responsible for coordinating
this program with BDL, and other stakeholders including private banks, associations, the
private sector and NGOs. In this context, several pilot schemes have been developed with
the help of development partners from several countries such as Greece, China, Spain, and
3 The main findings of the Report are being presented to LCEC and other stakeholders at a Workshop on
“Energy Efficiency Study in Lebanon: Opportunities and Investments”, on June 27, 2011 at World Bank Office in Beirut, Lebanon. The presentation is attached in Annex XX of this Report. 4 Source: ALMEE
7
international, and national organizations and institutions such as the European Union, GTZ,
and ADEME, in addition to the continued support from UNDP.5
5. In Lebanon a commercial market for both domestically manufactured as well as
imported SWHs has developed over the years, as the uptake of SWHs have been particularly
good in the case of large institutional end-users such as hospitals, hotels, etc. The SWH
market has grown at the annual rate of 15%, and the total number of SWH manufacturers,
importers and installers has increased from only seven in 2007 to about 70 in 2011. The
Lebanese Standards Institution (LIBNOR) has elaborated mandatory energy performance
standards for SWHs (mandatory standards for energy efficiency in appliances also extend to
other end-use appliances such as compact fluorescent lamps). However, the overall
cumulative uptake in individual residential households remains low. This is due to the
relatively lower level of awareness about the benefits of SWH amongst residential
consumers, the high initial cost of SWHs (average cost of US$1,300 for 200 liter SWH
including installation), and the absence of substantial financial incentives available so far.
To address the latter barrier, the European Union (EU)-funded incentive program, managed
by LCEC through the National Energy Efficiency and Renewable Energy Action
(NEEREA), set up through BDL, provides some grants and limited subsidies through two
major existing financial incentive mechanisms to support the growing market for SWHs in
residential households and also in the institutional sector. First is the credit at subsidized
rates (interest rate: 0%), and the second scheme is a grant of US$ 200 for residential SWH
installations (only for first 7,500 units) and of 15% of the capital cost for community
facilities and institutions. With the existing incentive programs and EU funding of Euros 15
million, the overall target for scaling up SWH installations in the residential sector is
190,000 m2 for an estimated 50,000 households by year 2014. UNDP continues to play a
important role as it provides support to the LCEC and its programs.
6. The number of residential households in Lebanon is estimated to be 1.2 million, out
of which more than 70% live in high rise apartment buildings in urban areas. Only about
30% are estimated to live in individual houses in non-urban areas. The majority of
residential apartment buildings in urban areas (such as in Beirut) accommodate a large
number of individual households (could be up to 50 individual households in a 10-storey
building) which results in a situation that, in each building, the available flat roof space
required for the installation of SWHs per household is very limited. Based on the analysis
and discussions with various stakeholders during the mission, the space available for SWH
installations is estimated to be up to 30% of the existing flat roof area only, because of other
competing needs on the roof space (for instance, parabolic antennas for television receivers,
advertisement billboards, roof-top air conditioning units and other equipments, which are
5 LCEC was created in 2002 as a project financed by the Global Environment Facility (GEF) and the Lebanese
Ministry of Energy Water, under the management of the United Nations Development Program (UNDP). Since then, LCEC has gradually established itself as an independent technical national center of expertise in energy efficiency and renewable energy, although it continues to be supported by UNDP, as indicated in the Memorandum of Understanding signed between MEW and UNDP on June 18, 2007.
8
also considered as valuable assets). In addition, the number of individual solar SWHs, in the
existing buildings in particular, will also be constrained by the structural quality of roofs to
be able to withstand extra loads and also by the orientation and height of buildings (where
the roof of a lower building may be shaded by an adjacent taller building). This roof space
limitation can be overcome to some extent by using high quality SWHs with much higher
conversion efficiencies (due to better materials and insulation). However these are even
more expensive and go beyond the existing SWH standards established by LIBNOR.
7. Taking into consideration the technical aspects and constraints, the realistic and
commercial market potential for individual SWH systems in the residential sector is
estimated to be 700,000 m2, for about a total of 200,000 households across Lebanon. This
potential is quite significant given the energy deficit situation in a country which is a net
importer of petroleum products which is used to generate electricity and meet its electricity
demand. Attaining 100% saturation of this market of 700,000 m2 of SWH installation in
200,000 residential households would require an estimated investment of US$ 300 million.
Much of these investments would have to be incentivized through grants and subsidies. In
addition, there will be GHG emission reductions which can potentially be monetized and
realized through the Clean Development Mechanism (CDM) based revenues in the global
carbon finance market which, in turn, could be used as incentives to individual residential
households. The estimated annual energy savings will be about 70,000 tons of oil equivalent
(toe).6 Based on an oil price of US$ 100 per barrel, the payback period for this investment is
around five (5) years.
8. While on one hand, the incentives and promotion will assist to realize a maximum
potential for individual residential household based SWH systems in 200,000 households,
the emphasis should also be put on further promoting the implementation of “collective”
SWH systems. The collective SWH systems could target an additional 300,000 m2 in
institutional buildings, hotels, hospitals, colleges, universities, etc. Most institutional
consumers such as hotels, hospitals and universities will be able to install SWHs even
without much financial incentives, by using their own funds or through financial incentive
programs available for large consumers through the various schemes of BDL. However, in
case of the residential sector, a “collective” system could be more complex in terms of
financing, and more in terms of implementation due to the constraints of limited roof space
and rights, as well as structural challenges of existing buildings. In residential sector,
collective SWH systems could be targeted for new buildings. This approach could be
implemented through intermediary service provider (similar to an energy service company-
ESCO) which could bundle the individual household‟s hot water needs and set up
community or apartment buildings- level collective SWH systems to provide guaranteed hot
water “service” to a group of individual households. This latter approach would be
especially relevant for new high rise residential buildings yet to be built.
6 Which results in an estimated savings of 1.4 million toe over a 20-year period, as the minimum average life
of SWHs is considered to be 20 years.
9
9. Based on the analysis in the Report, it is estimated that 200,000 households (700,000
m2 of SWH) and another 300,000 m2 for collective SWH systems is the practically
achievable potential in Lebanon. To achieve this potential, however, efforts will be required
on strengthening the implementation approach which could be led by LCEC (on behalf of
MEW). Actions will be required on multiple fronts in order to tap into the enormous
untapped potential for large scale SWH deployment across Lebanon. Additional financial
incentives accompanied by a strong quality assurance (in line with the minimum energy
performance standards of SWHs) and extensive consumer awareness program will be the
keys to successfully realize this potential for SWHs in Lebanon.
10. For the program to develop a large-scale SWH market in Lebanon (referred to as the
“proposed program” throughout the Report), which would lead to the practical realization of
the large potential of 1 million m2 of SWH installation (considering for both collective
SWH systems and individual residential household SWH systems) in Lebanon, several steps
and a multi-pronged efforts will be required. These efforts should be implemented under the
overall directions of MEW and leadership of LCEC, and with continued support from the
main local stakeholders through a Technical Committee (comprising of stakeholders such
as LIBNOR, BDL, IRI, ALMEE, private sector and NGOs) along with both financial and
technical assistance from various development partners (such as UNDP, EU, World Bank,
and bilateral donors). The actions and interventions under the proposed program, at several
levels, are summarized in the following paragraphs.7
(i) Institutional Coordination and Leadership: LCEC, as an affiliated institution to the
MEW and with initial support from UNDP and the EU, has effectively initiated the efforts to
systematically promote SWHs in Lebanon, with many successful pilot scale efforts. LCEC
has also received support from LIBNOR in establishing minimum energy performance
standards for SWHs and from BDL in designing and implementing financial incentive
programs (with funding from EU, etc.). As a national energy agency under the MEW,
LCEC is in an ideal position to lead and coordinate the proposed program. However,
strengthening the institutional role of LCEC, with additional resources and capacity
building, to help coordinate and lead the implementation of the proposed program would be
critical for successful deployment of SWHs on a larger scale in Lebanon. There are many
government and private sector stakeholders in the SWH sector in Lebanon, and LCEC‟s
proposed role to lead the coordination should involve them. LCEC has to transition from its
current technical advisory role limited to pilot and demonstration projects to a much bigger
and proactive coordinating and implementation role, in the overall context of the large scale
implementation challenges in the SWH sector. Under the proposed program, it is suggested
that LCEC should continue to strengthen its active stakeholder engagement and
consultations, that would lead to increased ownership of the program by all relevant entities.
Financing schemes would have to be coordinated mainly by BDL along with the local
commercial banks under its purview, even as funds may become available for additional
7 These actions are described in detail in various sections of the main Report.
10
financial incentives needed to achieve the full potential under the proposed program. As a
part of this proposed program, the Project Management Unit located within LCEC could be
supported through a Technical Committee, comprised of the key local stakeholders like the
BDL, LIBNOR, ALMEE, IRI and with representation from the private and NGO sectors.
(ii) Technical Standards and their Implementation: In addition to minimum energy
performance standards for SWH developed by LIBNOR, technical specifications for high
quality SWHs should be developed and made available to all stakeholders. This would help
in easy understanding of the minimum quality requirements for SWHs. The establishment of
a compliance system, infrastructure, and procedures for quality control, monitoring and
evaluation and a control system to reduce the risk of leaks and fraud has to be established,
along with the efforts. This should be accompanied by the establishment of standard and
transparent procedures for the evaluation of the eligibility of products, suppliers and
installers.
(iii) Capacity Building and Dissemination: One of the key factors of the proposed
program is to strengthen of human resources and their capacity within LCEC and amongst
other key stakeholders (at strategic and operational levels) for enabling a large scale
successful deployment of SWHs across various sectors in Lebanon. An assessment of the
capacity building needs is required as a first step. Next step would be to add more dedicated
program staff in LCEC who will be responsible for managing and implementing the
proposed program, running the Project Management Unit, and for coordination with all
stakeholders. Finally, the national strategy for the dissemination of SWHs to be
implemented by LCEC should be shared with and supported by all relevant stakeholders.
Finally, a comprehensive training program for technicians and installers and a consumer
promotion and awareness program are required. The dissemination program should be not
only focused on the technology and benefits, but also include information about institutional
and financial mechanisms for individual and collective SWH systems.
11
Large Scale Solar Water Heater Market Development Program in
Lebanon
Main Report
(Prepared under a World Bank-supported activity with the Lebanese Ministry of Energy and
Water and the Lebanese Center for Energy Conservation)
1. Introduction
Lebanon is a net importer of oil. Its electricity supply mainly depends on imported fossil
fuels (mainly from Algeria and Kuwait): approximately 2 million tons of fuel oil and 1.2
million tons of diesel per year are imported. This represents approximately 76% of all oil
imported.
In 2009 the total installed electricity capacity was 2,312 MW (2038MW thermal production
and 274 MW hydropower plant production) out of which only 1,875 MW were available
(1685 MW thermal plants and 190 MW hydropower plants).. The electricity generation is
fueled mainly by heavy fuel oil and combined cycle gas turbine units. The available
generation capacity is insufficient to meet the national electricity demand which is 2000-
2100 MW in 2009. Unreliable grid based electricity supply leads to widespread power
outages, resulting in load shedding, blackouts and brownouts which has in turn spurred the
widespread use of back-up generators, based on diesel. These diesel generators are very
inefficient and contribute to increase in imports of petroleum products, local air pollution
and global green house gas emissions. The utility Electricity du Liban (EDL) is unable to
recover its electricity supply costs and is running into financial losses.
The recent study concluded by the World Bank8 found that the introduction of solar water
heating in residential buildings in Lebanon would have significant benefit in terms of saving
on household energy demand, with corresponding benefits in Government savings on the
cost of supplying electricity. That study estimated that through the use of an individual
residential solar water heater (SWH), a household's total annual energy consumption can be
reduced by up to 42%. The implementation of 290,000 individual residential SWHs could
potentially reduce the electricity demand in Lebanon by about 100 MW, regardless of the
grid's technical and commercial losses. Installation of SWHs in residential buildings is so far
voluntary, and its further dissemination is hindered by the relatively low quality of SWHs
available on the Lebanese market; the lack of awareness, high initial cost (US$1,300 for a
200 liter SWH system) and only limited number of financial incentives and mechanisms and
the lack of effective implementation mechanisms. The Lebanon Center for Energy
Conservation (LCEC) is currently leading the efforts in the area of SWHs in Lebanon,
8 World Bank: Energy Efficiency Study in Lebanon (December 2009)
12
including supervising the execution of two pilot projects that will install 600 SWHs
provided by the Chinese Government, and a further 350 residential SWHs provided by the
Greek Government, in a pilot project village. More widespread installation of SWHs will,
however, have to rely on the introduction of appropriate regulation, the systematic
development of a market for SWHs, and the introduction of a compliance system for
standards for SWHs to ensure appropriate levels of quality control in SWH installation,
accompanied by financial incentive and innovative implementation mechanisms.
Over the years, LCEC has also developed potential financing mechanisms for SWHs
through the Bank du Liban (Central Bank of Lebanon, BDL), with a subsidy of US$ 1.5
million from the Ministry of Energy and Water (MEW) and with the financial support of the
European Union (EU), and continued technical support and grants from the United Nations
Development Program (UNDP). The implementation of standards and regulations remain
weak and the system needs to be strengthened. Better enforcement of norms and standards
for SWHs developed by the Lebanese Standards Institution (LIBNOR), along with effective
financial mechanisms can help scale up the penetration of SWHs on a large scale are
necessary. In this context, it is also critical to have a robust and effective institutional
structure and governance mechanism that would make the implementation of policies and
programs more effective. In this context, it will also be crucial to review the organization
and definition of roles and responsibilities of different stakeholders, to refine the analysis of
the economic and financial impact of the solar program, to identify the capacity building
needs and to develop promotion, awareness generation and information dissemination
strategies.
This Report is prepared on the basis of a study that was conducted by the World Bank team,9
working under the “Lebanon Energy Efficiency Standards and Regulations for Buildings”
Project (P113858), which is providing support to the MEW and LCEC, a national energy
organization for Lebanon which is affiliated to the MEW to help design and implement
national level projects and programs in the areas of end-use energy conservation and
renewable energy.10
This SWH-related activity was to provide support to LCEC in the
following aspects: (i) Review the existing SWH standards and regulations with regard to the
quality of available local manufactured systems, imported systems and installation practices
and compare them with best practices; (ii) Assess the potential financial and economic
9 The World Bank team which conducted this work and prepared this Report comprises of Simon Stolp (Senior
Energy Specialist and Task Team Leader, World Bank Lebanon Country Office), Ashok Sarkar (Senior Energy Specialist, World Bank, Washington DC), and Naceur Hammami (Senior Energy Efficiency and Renewable Energy Consultant, World Bank). For questions and more information, please contact Simon Stolp at <[email protected]> 10
LCEC supports the Government of Lebanon to develop and implement national strategies that promote the development of efficient and rational uses of energy and the wide spread application of renewable energy at the consumer level. LCEC is a financially and administratively independent body, and operates under the direct supervision of the Minister of Energy and Water. LCEC is also legally registered at the Ministry of Interior.
13
benefits through the use of SWHs compared with conventional electrical heating in the
context of a market where electricity prices are subsidized and a parallel large scale private-
sector managed back-up generation market exists; (iii) Identify gaps in the existing
standards and develop mechanisms to enforce the standards; (iv) Develop a framework for
scaling up the large scale deployment of SWHs in the residential sector; and (v) Propose
financial mechanisms including specific incentives and potential carbon/climate financing,
and propose regulations that are appropriate to the Lebanese context, that will support the
scaling up of the installation of SWHs on either a voluntary or mandatory basis. The main
findings of the Report are being presented to LCEC and other stakeholders at a Workshop
on “Energy Efficiency Study in Lebanon: Opportunities and Investments”, on June 27, 2011
at World Bank Office in Beirut, Lebanon. The presentation is attached in Annex XX of this
Report.
2. Electricity Supply and Demand Situation
Lebanon is a net importer of oil, with 98% of its primary energy being imported. The total
supply of primary energy was 6.735 million tons oil equivalent (TOE) in 2009 with an annual
average increase of primary energy demand of 3.5%.11
The share of energy sources are as
follows: 26% of gasoline, 42% of diesel and 20% of fuel oil. The remainder of energy comes
from LPG, hydro power, wood energy, coal and others.
Beyond biomass energy, mainly in the form of fuel wood and charcoal, the contribution of
renewable energies such as solar thermal and photovoltaic, wind and hydropower to the
national energy balance is limited to less than 2 % in the overall energy balance.
In terms of the share of total demand for gasoline, the transport sector alone accounted for
45% gasoline demand, residential and service sector 30% and the industrial sector consumed
25% mainly in the form of diesel in 2009. The total electricity generation is 15,000 GWh, of
which independent power producers generate 3000 GWh or 30% of the total electricity
production, the rest being produced by EDL (12,000 GWh). The national electrification rate
exceeds 98% but electricity generation only accounts for 18% of the final energy
consumption. The grid-based electricity from EDL costs about 12.5 US cents per KWh to
generate. However, the average electricity tariff for consumers is 9.4US cents per kWh.
Due to poor reliability of supply and insufficient generation capacity of EDL, Lebanese
consumers depend largely on alternative sources of electricity supply provided by
independent, private sector owned small generation systems. The tariff charged by the latter
is much higher, with an average of 18 US cents per kWh. Electricity billing is done in
tranches of 100 KWh, the first three tranches are billed at prices still lower than the marginal
cost of electricity generation.
11
Source: ALMEE – Solar Energy in Lebanon.
14
Table 1: Electricity tariffs in Lebanon (2010)
Electricity tariff (LV)
Cosumption
(kWh/month)
Tariff (LL/kWh) Tariff (€/kWh)
<100 35 0.026
101-300 55 0.041
301-400 80 0.060
401-500 120 0.090
>500 200 0.150
Small industry 115 0.086
Agriculture 115 0.086
Public 140 0.105
Electricity tariff (MV)
Industry 320 Pic demand 0.240
Hotel 112 Normal 0.084
80 Night 0.060
Source: EDL(2010)
The electricity generation mix of EDL in 2009 consisted of 85% from thermal power plants
with the generation efficiency below 35%. Of the remaining generation by EDL, 5.1% came
from hydro sources, and 4.9% and 4.3% were imported from Syria and Egypt respectively.
3. Role and Importance of Hot Water Heaters
3.1. Electrical consumption per sector
The electricity generated by EDL is consumed by the following sectors: residential 29.2%,
Systems: Energy efficiency: (lighting, motors, heating, cooling,) and Renewable energy
(solar, wind, hydro, geothermal).
The specific milestones accomplished and proposed steps under the National Energy
Efficiency Action Plan (NEEAP) include promotion of SWHs. The accomplishments and
plans are as follows:
UNDP and LCEC have conducted an assessment of the use of SWHs and analyzed
the market performance.
The UNDP, in cooperation with the Central Bank of Lebanon and the European
Union Fund, the NEEREA have offered interest-free long-term loans to energy
efficiency and renewable energy projects with full risk guarantee.
400 SWHs distributed through a pilot project in 2010.
350 SWHs installed in beginning of 2011.
Subsidies provided for 7,500 SWHs of US$200 each, with a total subsidy financing
of US$1.5 million.
Provision made available of 0% interest rate 5-year loans for purchase and
installation of SWHs, with a total funding of US$ 20 Million available.
A testing facility for SWHs established, in cooperation with the Industrial Research
Institute (IRI). The testing facility is already operational from the beginning of
2011.
Market survey conducted on the use and barriers for use of SWHs to support the
market transformation in the country by the beginning in 2011.
Establishment of a web-based information clearinghouse for solar water heating,
That will be updated regularly to become a central reference.
Launch of a nationwide awareness campaign based on “A solar heater for each
household” initiative. Awareness campaigns and promotion campaigns to educate
consumers and dealers.
Organization of a SWHs trade seminar by the end 2011.
Provision of technical support to SWH manufacturers and suppliers to improve
their product quality in 2011.
Coordination with the Ministry of Finance for the implementation of financial
incentives for the import of SWHs by mid-2011.
Submission of the draft law incorporated into the building code to the Government
of Lebanon (Adoption targeted by 2012).
Promotion of solar water heating systems for collective use and water heating in big
facilities.
27
9. SWH Standards in Lebanon
The Lebanese Standards Institution (LIBNOR) adopted European standards that are
already approved by the European Committee for Standardization for solar systems:
a. Solar Energy Vocabulary: BS EN ISO 9488 2000 Solar Vocabulary.pdf
b. Thermal Solar Systems and components- Custom built systems – Part1: General
requirements: DD ENV 12977 1 2001 Thermal solar systems and components
Custom Built Systems 1.pdf
c. Thermal Solar Systems and components- Custom built systems – Part2: Test
methods : DD ENV 12977 2 2001 Thermal solar systems and components
Custom Built Systems 2.pdf
d. Thermal Solar Systems and components- Custom built systems – Part3:
Performance characterization of stores for solar heating systems: DD ENV
12977 3 2001 Thermal solar systems and components Custom Built Systems
3.pdf
10. Implementation Mechanisms for SWH Standards and Associated Regulatory
Approaches to Strengthen Compliance
LIBNOR is responsible for the formulation of standards for the SWHs. However, the
effective implementation of these standards will require systems and infrastructure in place
with capacity building and training of various participating stakeholders. :
1. Lebanese standardization of solar equipment;
2. Qualified human resources to ensure application of and compliance with the
standards;
3. A specialized laboratory for testing and verifying the technical specifications of the
equipment;
4. Technical specifications and design parameters that are in accordance with the
minimum program requirements laid out in the standards.
These technical specifications should be available within the management unit of the
Program in LCEC and shall include Technical Specifications and criteria for eligibility
of solar collectors and SWH under the Program and a technical file for Solar Collectors
and SWH.
11. Review of Financial Incentives available for SWHs in the Lebanese Market
28
Among the 14 actions listed in NEEAP to improve and promote energy efficiency and
renewable energies, one of the initiative focuses on SWHs for Buildings and Institutions.
Two major financial mechanisms are put in place by the Central Bank of Lebanon to support
the growing market for SWHs in households and in the institutional sector, to be
implemented in coordination with the domestic private sector banks. First one is a program
of providing credit at subsidized rate (rate: 0%) for the purchase of individual and collective
SWH systems the second initiative is for a grant of US$ 200 per individual SWHs. This
subsidy is limited to 7,500 SWH units.
The SWH program for the residential sector aims at the installation of 190,000 m2 by 2014.
This program is jointly managed by LCEC, BDL, private banks, suppliers of SWHs and
consumers. UNDP and EU funding is available (15 million Euro) at the BDL to finance energy
efficiency projects. The collective solar installations are eligible for this funding.
The Intermediate Circular No 236 sent by the Governor of the Bank of Lebanon to other
banks about the decision No 10572, of November 25, 2010 relating to the amendment of the
basic Decision No 7835, of June 2, 2001 (statutory reserve) attached to the basic Circular No
84. Copy of Intermediate Circular No 236 (Annex2).
12. Proposed Programmatic Framework for Large Scale Deployment of Individual
SWH systems in the Residential Sector
12.1. Short-term and Long-term goals
As discussed in earlier sections of this Report, given the roof space limitations and
competing uses, it is estimated that the available space to accommodate installation of
SWHs is only 20% to 30% of the total roof surface in the case of residential sector.
Furthermore, the number of individual SWHs that can potentially be installed is also limited
by the quality, structural strength, and durability of roofs to withstand the additional weight
of the water tank for SWHs.
12.1.1. Phase 1 Program (2011-2014) for Short term Goals
The objective of the proposed Program is to enable the widespread deployment of high
quality SWHs in the residential and institutional sector (hotels, hospitals, schools, etc) of
Lebanon. The program will be implemented in two phases. Phase 1 will adopt an approach
driven primarily by financial incentives that relies on grant and credit schemes and which
would enable the consumers to purchase and install solar water heating systems for
households and the institutions (hotels, hospitals, schools etc). The Phase 1 initiative will
also include the strengthening of standards for SWHs and establishment of implementation
mechanisms required for quality control procedures to ensure the availability of high quality
SWHs in Lebanese market which would foster and promote trust between the equipment
suppliers and consumers.
29
The Phase 1 of the proposed Program will support the long-term development of the SWH
sector in Lebanon in a sustainable manner through:
a) The establishment of appropriate financing mechanisms for the sustainable development
of SWHs;
b) Market Promotion of SWHs through local commercial banks ;
c) Encouraging financial institutions to support operators in the sector (suppliers,
manufacturers, installers, importers, etc.),
d) The establishment of a monitoring and evaluation system
e) The establishment of a compliance mechanism for adherence to minimum technical
requirements to ensure the quality of products on the market, as per the standards
established by LIBNOR.
It is expected that by the end of Phase 1, SWHs market transformation would have taken
place. Phase 2 will be market-driven wherein a larger number of high quality SWHs will be
deployed by consumers on their own.
The Phase 1 of the proposed Program is targeted to achieve the deployment of 190,000 m2
of
SWH in the residential sector by 2014. This program is expected to produce primary energy
savings of 19,000 of TOE per year (or 220,000MWh /year). Figure 1 illustrates the gradual
deployment of SWHs during the period 2011-2014. By the end of the Phase 1 program
period, that is, by 2014, a total of 190,000 m2 would be installed.
Figure 6: Projected progress of the Program- Phase 1 (2011-2014)
12.1.2. Phase 2 Program (2015-2020) for Long term Goals
As discussed earlier in the Report, out of the total number of 1.2 million households in
Lebanon of which 70% live in apartment buildings, only 20 to 30% of the roof space is
0
10000
20000
30000
40000
50000
60000
2011 2012 2013 2014 2015
Num of Households
Total m2 installed
Primary Energy Saved per year (TOE)
Cumulated primary energy saved(TOE)
30
estimated to be available for the installation of SWHs. This accounts to about 700,000 m2
of SWH, which could serve the hot water needs of about 200,000 individual households.
The associated annual energy savings are estimated to be 70,000 TOE. As shown in Figure
7, the deployment of about 500,000 m2 of SWHs is expected to be rolled out between 2015
and 2020. By the end of 2020, cumulative energy savings is estimated to be 489,240 TOE.
Considering the average useful lifetime of the SWHs, the energy savings is estimated to be
1.4 million toe during the lifetime of the equipment.
Figure 7: Potential of SWH installed (m2) and energy saved (TOE): 2011-2020
(a) SWH installed (m2 )
(b) Potential of energy saved per year (TOE)
(c) Cumulated primary energy saved (2011-2020)
0
20000
40000
60000
80000
100000
120000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Num of Households
Total m2 installed
0
20000
40000
60000
80000
100000
120000
Total m2 installed
Primary Energy Saved per year (TOE)
31
The environmental impact of this program is significant, it could exceed 1.5 million tons of
CO2 avoided cumulative over 2011-2020.
Figure8: Environmental Impacts of the Program
0
20000
40000
60000
80000
100000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Cumulated primary energy saved (TOE)
Cumulated primary energy saved(TOE)
0
50000
100000
150000
200000
250000
300000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Tons of CO2 avoided/year
Tons of CO2 avoided/year
32
12.2 Conditions of Eligibility of Suppliers, Installers and Products
The key success elements of the sustainability of the proposed Program are the quality of
the SWHs, and various stakeholders ranging from equipment suppliers to installers to
inspectors have specific roles to play. To ensure that the quality of SWHs is high the
following provisions are proposed to be incorporated into the Phase 1 of the program. To be
eligible for the proposed Program, all transactions must involve products and participants that
are previously approved by the program, and must be conducted by participating operators
that are also pre-approved.
Eligible Products: To be eligible, the products must appear on the list of certified products
previously approved by the program. Eligible products are solar collectors and unitary systems
of heating hot water. These products must meet the provisions of the "specifications on the
eligibility of products" which will be consistent with the minimum energy performance
standards established by LIBNOR.
Eligible Operators: Suppliers of SWHs must meet the stipulations of the "specifications on
the eligibility of suppliers to the proposed Program” to supply the SWHs to the individual
residential households. The eligible operators will also be able to obtain the available financial
incentives, on behalf of the residential households. These participating suppliers can be local
or foreign manufacturers, or assemblers or distributors, with offices established in Lebanon
(under national laws and procedures) or have authorized national representatives in case of
imported products.
Installers of individual and collective systems. Installers must meet the provisions of the
"specifications on the eligibility of installers”.
Supervisors and technical controllers for collective solar systems must meet the provisions
of "specifications on the eligibility of supervisors and technical inspectors”.
The eligibility criteria for the suppliers, installers and products is described in Annex 3.
12.3. Supporting Financial Incentives and Innovative Mechanisms
In order to encourage the uptake of SWHs in Lebanon, the Government has already
implemented several recommendations that provides financial incentives for the development
of this sector. These include: the removal of import tax and customs duties for solar
technologies and the establishment of financing mechanisms to support the adoption of new
technologies. The latter was described briefly in an earlier section of this report. The
proposed Program aims to further remove barriers to the development of a SWH market such
as its high initial costs compared to electric and gas water heaters and the long (and potentially
33
unattractive) payback periods for such investments. The financing mechanisms in proposed
program phase 1 will support all eligible beneficiaries in the target sectors intending to
purchase and deploy SWHs.
The realization of the total estimated potential of 700,000 m2 for SWH installation by 2020
(Phase 1 and 2) requires an estimated total investment of $ 300 million. The total energy
savings are estimated at about 70,000 tons of oil equivalent (toe) per year or 1.4 million toe
during the lifetime of the equipment. Based on a price of $ 100 $ US per barrel, the payback
of investment is around 5 years.
The phase 1 of the proposed program which targets 200,000 m2 of solar water heating, will be
supported partly by financial incentives already in existence such as through the NEEREA and
BDL. As a part of NEEREA, dedicated funds of US$1.5 M has been mobilized by the GoL, to
be added to US$3 M from other donors to promote the installation of 190,000 m² SWHs by
2014 (50,000 m²/year). Based on the request of the Ministry of Energy and Water, the
Government of Lebanon committed to invest 1.5 million USD to implement a financing
mechanism to subsidize residential SWHs and offer no-interest loans (Council of Ministers
decision No. 59, on March 10, 2010).
The specific financing mechanism includes a grant of USD 200 per SWH installation
combined with a 5-year tenured, zero interest loan. This loan is distributed by four
participating commercial banks under the auspices of the BDL. The private sector commercial
bank is a free access one and half time the amount of equity borrowed to the customers. The
US$200 grant is given as a deduction of the last reimbursement. The MEW, in cooperation
with the Central Bank of Lebanon, offers to the concerned bank a grant of US$ provided that
the supplier is among the eligible companies specialized in selling and installing solar water
heating systems and approved by LCEC. In return, the statutory reserve of any participating
private sector bank is reduced by 150% of the balances of loans granted to finance the
purchasing of solar water heating systems, provided that the interest equals 0% and that the
overall purchasing value is settled in monthly installments extending over five years.15
The consumer awareness campaign about this financial incentive program includes
advertisement through media (TV spots, newspapers, etc.), and through billboards and posters
in/on public transportation (buses) and was co-financed by several participating local private
sector banks such as Fransa Bank, Banque Libano-Francaise and Credit Libanais.16
Three new
banks have joined the program recently, to use the new financing mechanism. These are
Banque Audi, Byblos Bank and Intercontinental Bank of Lebanon (IBL).
15
Refer article n°18 of Intermediate Circular No 236 Addressed by la Banque De Liban to Banks Attached is a copy of Intermediate Decision No 10572, of November 25, 2010 relating to the amendment of Basic Decision No 7835, of June 2, 2001 (statutory reserve) attached to Basic Circular No 84.) 16
Fransa Bank and Banque Libano-Francaise took immediate advantage of the newly
developed mechanism while Credit Libanais has not offered it so far.
34
LCEC has developed a list of eligible SWHs, and any customers is eligible to participate in
this financial incenetive program and apply for a grant as long as the SWH model to be
installed is certified and labeled by LCEC (cf. Solar Water Heaters report).
Since its launch by the LCEC in 2010, the operation US$ 200 grant subsidy scheme has been
quite successful. As of 31 January 2011, more than 2,000 candidates applied at commercial
banks to benefit from this financial incentive scheme.
12.3.1. Mechanics of the BDL/ NEEREA Financial Incentive Scheme
The financial incentive systems supported by NEEREA through BDL are based around two
types of mechanisms tailored to different category of consumers, which intend to purchase
and install SWHs:
1. For individual SWHs
A grant of U.S. $ 200 for the 7,500 first individual SWHs installed (total funds
corresponds to US$ 1.5 M).
A credit for 80% of the SWH value with an interest rate of 0%, and 5-years
loan tenure, to end use customers.
2. For collective solar water heating facilities in buildings, hospitals, hotels,
schools, etc.
The BDL, with support from the European Union, offers a grant through
participating banks to subsidize the loans to end-use consumers, for projects
with value of loan not exceeding LBP 1.5 billion (equivalent of US$ 1
million). This grant is targeted to finance small and medium-enterprises to
support environmentally-friendly projects in the energy sector (including large
collective solar water systems), the maturity of which shall not exceed ten
years, along the following lines:
15% of the value of the loan granted to non-productive sectors, whose interest
rates are not subsidized by the Lebanese State.
5% of the value of the loan granted to productive sectors, whose interest rates
are subsidized by the Lebanese State.
The Central Bank of Lebanon benchmarks, upon request, the value of the grant for the
concerned project following the technical investigation of the project performed by a
specialized institution, in coordination with LCEC in case of energy efficiency projects. The
grant amounts allocated to the project are disbursed through the participating bank, the
provider of the loan, upon a request submitted following the completion of the works
35
pertaining to saving energy, renewable energy, and green buildings, etc., and based on
documents proving the good execution of these works.17
12.4. Institutional Coordination and Management for the Implementation of the
SWH Scale Up Programs
The first phase of the proposed program is scheduled to last for four years (2011-2014).
During this period, the program will be supported by BDL through their participation in
financing the subsidy to end users for the purchase of SWHs, as described above. At the
institutional level the program involves the participation of all relevant actors, such as:
12.4.1. Role of Ministry of Energy and Water
Ministry of Energy and Water: which is in charge of the national policy development and
formulating strategies for the energy sector. Its role in the proposed Program will mainly be to
provide overall directions, and support at the national and international level, in order to
ensure that all economic, social and environmental objectives are met.
12.4.2. Role of Lebanese Center for Energy Conservation
The LCEC is the central and lead stakeholder in the proposed program, with overall
coordination responsibility of its design, implementation, monitoring and evaluation. In this
context, LCEC has a much broader role to play in terms of a national-level agency, whose
mandate shall be to implement the Government‟s policy and facilitate its implementation with
regard to energy efficiency and renewable energy sources through the study, design,
promotion and coordination of programs, including the proposed program.
As part of the broad-based mandate, the LCEC shall have the responsibility to:
(i) Coordinate all programs aimed to promote and exploit energy resources in the country
(conventional energy, renewable energy sources, substitute energy sources, energy
saving equipment, etc);
(ii) Conduct studies on energy supply and demand, evaluation and programming of actions
for energy harnessing (rational use of energy and new and renewable energy sources)
and more generally any studies in line with its mandate;
17 Participating private sector banks in this scheme shall obtain the consent of the BDL over
any amendment of the loan, the value of which exceeds LBP 30 million (equivalent of
US$20,000), granted to the financing of environmentally friendly projects, of the maturity, the
ceiling, the currency or the settlement table of loan. They shall also notify the BDL of any
other amendments on the loan.
36
(iii) Promote and implement projects to demonstrate innovative techniques and processes in
the area of energy, rational use of energy, new and renewable energy sources for central
administration, local public communities or others;
(iv) Promote training actions in the area of energy, rational use of energy, new and
renewable energy sources;
(v) Organize sensitization campaigns for consumers of energy in all its forms;
(vi) Contribute to technical and scientific development in the area of rational use of energy,
renewable and substitute energy sources;
(vii) Collaborate with relevant national organizations to set up standards of energy efficiency
for equipments and materials using energy as well as products contributing to energy
saving;
(viii) Identify investment projects requiring profit and incentive measures granted by
Government and aimed at developing the energy sector, rational use of energy, use of
renewable and substitute energy sources prior to their use;
(ix) Make proposals to the supervising Ministry on policies relating to rational use of energy
sources, use of renewable and substitute energy sources;
(x) Centralize and disseminate data and information on production, processing, distribution
and energy consumption through: design, orientation and coordination of works relating
to collection of statistical data on production, processing, distribution and consumption
of energy;
12.4.3 Role of Project Management Unit within LCEC
In the proposed program, a dedicated Project Management Unit will be in charge of managing
and coordinating the program. It will be established within LCEC, and with endorsement from
the MEW, will provide the interface between the different actors involved in this program.
This Unit will also facilitate and supervise the proposed program‟s progress. The major
activities to be implemented by this Unit are detailed below.
(i) Providing necessary inputs and support to all stakeholders represented in the
Technical Committee for its smooth functioning, including the Committee‟s help to
the Project Management Unit within LCEC to review of applications submitted by
suppliers and installers to become associated with the proposed program and work
37
under the initiative. It is anticipated that the Chairman of the Committee will oversee
the proposed Program Management Unit in LCEC. The Committee will be responsible
for ensuring all approved suppliers and installers are compliant with the standards
required by the proposed program.18
(ii) Planning activities related to achieving optimal performance of the program,
including facilitation of the program within government through awareness raising,
training of installers and information exchange between all stakeholders of the
program
(iii) Organizing training for installers and technicians for maintenance of the
installed systems and developing a promotion and awareness campaign for the
proposed program and SWH technology to increase consumer awareness.
(iv) Maintaining complete records of all grant applications submitted by suppliers
including type of system, products used and type of grant applied for.
(v) Monitoring and evaluation of the program progress.
(vi) Management of disputes due to non compliance with the technical
specifications, granting certificates of eligibility to suppliers, installers and products.
(vii) The establishment of a real time computer system to manage the grants to
providers and the collection of funds from customers, ensuring their transfer to
suppliers within the proposed program.
(viii) Forwarding information about SWH customers (name, meter number, address,
other references) to the relevant suppliers. Holding regular meetings with stakeholders
on the assessment of the progress of the solar program.
(ix) Developing proposals and requests for funding in cooperation with the
Ministry of Finance to be submitted to donors and development partners
12.4.4. Role of BDL through commercial banks
(i) To award grants and loans to suppliers and recover loans made to customers
through the commercial, private sector banks;
(ii) To be represented in the Technical Committee for granting licenses to suppliers
and installers, monitoring the status of program development.
12.4.5. Role of Others stakeholders (LIBNOR, IRI, LSES, GBC, ALMEE, NGOs)
18 The Committee may invite any other institution to provide support to the work.
38
The other stakeholders will support the proposed program in many ways.
(i) To contribute for the development of proposed program
(ii) To provide training and information to staff involved in this program,
(iii) To provide suppliers with necessary information about technology, standards,
clients (customers),
12.4.6. Role of Suppliers of SWHs: manufacturers, importers with networks of
installers
In addition to these stakeholders there are numerous additional stakeholders who will be
involved in the program including banks, consulting firms and consulting engineers,
12.4.7. Role of Clients: Are households or consumers (hotels, hospitals, ..) who are
eligible for the proposed program.
Figure 9: Institutional structure of management of the proposed program
Technical Committee BDL +Banks
Suppliers
Installers
Product
Others specific
dossiers
Studies
Planning
Approval
Capacity building
Promotion
M&E
Others
MEW
Grant Eligibilities
LCEC
Management of the
Program
39
12.5. Financial and Economic Analysis: Economic rate of return of SWH
As shown below in Table 1, the average prices of SWHs with a capacity of 200 liters and 300
liters are $ 1,200 and $ 1,800 respectively. Without the subsidies, the payback period for the
acquisition of a SWH (in place of conventional electric water heater) remains high, with
payback period of 6.75 years for 200 liters model and 5 years for 300 liters. This is due to the
high cost of primary energy saved in Lebanon. Using the funding mechanism (credit +
subsidy) through the BDL scheme with participating local banks, the payback periods are
estimated to be approximately 5.6 years for the 200 liters and 4.5 years for 300 liters SWH
models. This is bound to attract customers to join the program and install their own SWHs.
Two ways to calculate SWH economic rate of return.
a. Based on primary energy saved (tons of oil equivalent) and the international
price per barrel
Table 4 : Economic rate of return calculation
SWH(200 L) SWH(300 L)
Cost ($) 1200 1800
Area (m2) 2.4 4.8
Energy Saving per m2/year (TOE) 0.1 0.1
Energy Saving per SWH (TOE/year ) 0.24 0.48
Cost of TOE(based on barrel cost 100$ ) 740 740
Cost of quantity of energy saved (TOE) per year ($) 177.6 355.2
Payback period (Years) 6.75 5
Cost with subsidy ( 200$/SWH for 7500 first SWH sold) 1000 1600
Payback period with subsidy(Year) 5.6 4.5
b. The substitution of electricity as compared with an electric water heater and
based on the price of local kWh (Lebanon)
Average solar radiation: 5 kWh/m2
/day
Annual solar radiation: 1825 kWh/ m2
/year
Family (2 to 3 persons) needs of hot water: 200 l/day
Efficiency of SWH: 40%
Energy production of SWH: 730 kWh/ m2 /year
SWH area (200 l model): 2.4 m2
Final energy production of SWH (200l): 1752 kWh/ year
Primary energy substituted (Electric water heater η=90%): 1946 kWh
Cost of energy saved (substituted): 1946 kWh *0.094$= 183 $/year
Payback period: 1200 $/183$/year= 6.6 years
40
12.5.1. Cost of Proposed Program (Phase 1: 2011-2014)
The National Energy Efficiency Action Plan intends to improve and promote energy
efficiency and renewable energies over a period of four years. One of the initiatives of this
Plan aims at promoting the use of SWHs, mainly in the residential sector, with the aim to
facilitate the installation of 190,000 m2 of solar collectors by 2014. The number of households
benefiting from this program is estimated to be 52,000 or 25% of the estimated potential
market.
The total number of SWHs to be installed during this period is estimated at 52,000 units. It is
estimated that the size (capacity) of SWH units will be split evenly between the two standard
sizes: 200 liters and 300 liters capacity.
Figure 10: economic impact of phase 1
The SWH units will be deployed in a phased manner over the Phase 1 period, with 52,000
households.
0
10000
20000
30000
40000
50000
60000
2011 2012 2013 2014 2015
Num of Households
Total m2 installed
Primary Energy Saved per year (TOE)
Cumulated primary energy saved(TOE)
41
Table 5: Cost of the Proposed Program (US$ ,000)
Year 2011 2012 2013 2014 Total (2015)
Number of Households 10000 12000 15000 15000 52000
Number of SWH 10000 12000 15000 15000 52000
( Average m2/SWH based on 50% of
SWH 200 L and 50% SWH 300 L)
3,6 3,6 3,6 3,6 3,6
Total m2 installed 36000 43200 54000 54000 187 200
Final Energy saved MWh/m2/year 0,55 0,55 0,55 0,55 0,55
MWh saved 19800 23760 29700 29700 35640
Cumulated saved MWh 19800 43560 73260 136620
Primary energy saved: TOE/m2/year 0,15 0,15 0,15 0,15 0,15
Primary Energy Saved per year (TOE) 5400 6480 8100 8100 9720 Cumulated primary energy saved(TOE) 5400 11880 19980 37260 Average cost of SWH 1000 $US 1,5 1,5 1,5 1,5 1,5
Investment 1000 US $ 15000 18000 22500 22500 78000
Cost of TOE 1000 $ 0,73 0,73 0,73 0,73 0,73
Cost of cumulated Energy Saving 1000$ 3942 8672,4 14585,4 20498,4
12.5.2. Financing Scheme of the Proposed Program
12.5.2.1. Benefits to Consumers and Utility
Based on an the average estimated cost of $1200 and $1800 respectively per installed 200 liter
or 300 liter SWH respectively, the investment required to implement the proposed program
over 4 years is estimated at US$78 million, including the budget for providing loans to the
beneficiaries of approximately US$ 62.4 million , as described below. The cumulative
primary energy savings during this period is estimated at 37,260 TOE, and the cumulated final
energy savings is 136,620 MWh.
a. For the end use consumer, cost effectiveness and viability of solar systems is
calculated on the basis of the following assumptions:
• The price per KWh sold by EDL at 9.4 US cents..
• The price of SWHs is $ 1,200 for 200 liter systems and $1,800 for 300 liter
capacity,
• Annual production (saving) of final energy is 550 KWh per m2 of SWH.
• The lifetime of the SWH is 20 years;
• The interest rate for credits for the purchase of a SWH is 0%.
• Maintenance costs are negligible.
The payback period is quite high is around 5-7 years
42
b. For institutions, banks and the government, profitability of the program is calculated
based on the following assumptions:
• Energy conversion efficiency of thermal plants is around 35%
• Conversion efficiency of electric water heaters is around 80%;
• The price of oil is at an average of $ 100 per barrel;
• The amount of primary energy is 3 times larger than the minimum amount of final
energy used for heating water
• Price of kWh produced by EDL is around 12.5 US cents
• The price per m2 of SWHs installed is around $ 500.
The payback of the investment is 5 to 7 years
During the Phase 1 (first four years), the proposed program would allow EDL to achieve
cumulative energy savings equivalent to 300 GWh (primary energy) or 28080 TOE a saving
in foreign currency of $ 21 million and a reduction in its budget deficit.
12.5.2.2. Environmental benefits
As mentioned above, Lebanon is generating the bulk of its electricity from imported oil
through thermal power plants. This import is growing continuously due to the growing
electricity demand. This contributes significantly to the costs of supply of EDL.
This program will contribute to achieve significant cumulative energy savings of about 28080
TOE and 84 000 tons of CO2 avoided. in first 4 years (upto 2014).
Based solely on the proposed program about (190,000m2) 187,200 m2 of SWHs installed in
Phase 1, it would achieve annual savings in primary energy of about 28,000 TOE up to 2014
and prevent the emission of 84,000 tons of CO2 into the atmosphere annually.
13. Proposed Programmatic Framework for Large Scale Deployment of Collective
SWH systems in residential and tertiary sectors in urban areas
Collective solar water heating in public institutions, including hotels, is widespread on a
global level. Lebanon has some experience with these collective solar systems, through a few
pilot operations. Large scale collective SWH systems should be promoted on a larger scale for
collective housing (apartment buildings) and institutions such as hotels, hospitals, clinics and
health centers, university campuses, colleges and schools, sports centers, etc.. Hot water needs
are estimated to be more than 40 million cubic meters in these buildings and institutions per
year.
It is estimated that many of the of collective systems can be applied to new residential
buildings. However, most institutional consumers such as hotels, hospitals and universities
will be able to install SWHs even without much financial incentives, by using their own funds
or through financial incentive programs available for large consumers through the various
43
schemes of BDL. However, in case of the residential sector, a “collective” system could be
more complex in terms of financing, and more in terms of implementation due to the
constraints of limited roof space and rights, as well as structural challenges of existing
buildings. In residential sector, collective SWH systems could be targeted for new buildings.
This approach could be implemented through intermediary service provider (similar to an
energy service company-ESCO) which could bundle the individual household‟s hot water
needs and set up community or apartment buildings- level collective SWH systems to provide
guaranteed hot water “service” to a group of individual households. This latter approach
would be especially relevant for new high rise residential buildings yet to be built.
There is only limited amount of available space for installation of solar collectors and water
heaters on residential buildings and their roofs, as described in the Report. It is estimated the
SWH collective installations will require a surface area of around 300,000 m2. The
realization of the collective program will require financial and institutional mechanisms
slightly different from the one related to individual SWHs.
13.1. Short and long term goals
The dissemination of large scale solar systems requires the several steps including:
(i) Collecting information on hot water needs and available surface area;
(ii) Conducting an energy audit of the institution to be equipped with solar water
heaters;
(iii) The completion of a technical and economic pre-feasibility study to make an
offer to the client.
(iv) Conducting a study for the execution of the installation;
(v) Mobilization of funding since the initial investment is generally much higher
than individual SWHs;
(vi) Obtaining the consent of all residents for apartment buildings who represent
more than 70% of the available technical potential.
(vii) Implementing the project.
13.2. Structure of the Program (eligibility of suppliers, installers,
products, etc.)
The eligibility of suppliers, installers and the product is similar to the mechanisms
described above for the eligibility of individual SWHs. However, in addition to the
described procedures, a technical and economic feasibility study will have to be
carried out by a specialized consulting firm and approved by LCEC before the
installation of the system, because such systems will not be of standard design and
specifications which can be generalized.
13.3. Financial Mechanism
44
The total cost of this program is estimated to be around US$ 100 million to be invested
over a period of 10 years. It requires tailor made financial and regulatory incentives
and additional incentives including exemption from customs duties and VAT on
imported equipment, local products and services.
Under the NEEREA program, the Circular 236 that is related to energy corresponds
with the line of credit managed by the BDL and companies involved in energy
conservation and renewable energy are eligible for loans. For new projects dealing
with collective SWH systems, loans of value greater than $ 20,000 could be granted by
the BDL after the approval of the LCEC. The repayment period could extend over a
period of 10 years from the end of the grace period ranging from 6 months to 4 years.
Loans smaller than $20,000, or equivalent, need approval from the Board of the
Central Bank
Loans with values of more than $20,000 need individual approval from the
Governor of the Central Bank.
13.4. Institutional and Stakeholder Responsibilities
The implementation of the program for collective SWH systems requires several steps
to be undertaken:
1. Technical study
2. Financial analysis
3. Proof of creditworthiness of the beneficiary customer
4. Eligibility of the product, supplier and installer
5. Credit approval
6. Project approval
7. Project implementation
8. Monitoring and evaluation
9. Disbursement of credit
10. Credit recovery
These activities must be performed by different key actors, namely: the beneficiaries,
consultancy companies, commercial banks, BDL, LCEC and other stakeholders.
LCEC has a critical role in the implementation of the program and its success. MEW
shall support and strengthen LCEC in its mission of coordinating the program so that
all stakeholders can be integrated fully into the proposed program.
45
Figure 12: Interaction between main stakeholders for collective SWH systems
13.5. Financial and Economic Analysis
Taking into account all these elements already mentioned above and with the support of
promotional campaigns, the objective of establishing 300 000 m2 of SWH up to 2020 could
be achievable. The estimated required investment is 104.3 million USD, and the cumulative
energy savings achieved during the period (2011-2020) are in the order of 137,700 TOE.
BENEFICIARIES
Service Companies
ESCO
Commercial Bank
BDL
LCEC
BDL
Consultancy Office Financial Analysis + Technical
study of the project
Financial review and
compliance with criteria
for granting credit
xamen financier et de conformité aux critères d’octroi du crédit
Approval the Technical Review and Eligibility
Final approval of Credit and Credit Granting
Review and
contract
preparation,
Review the client's file + agreement + formulating of the application
46
Based on a price of U.S. $ 100 per barrel, the monetary savings are estimated at U.S. $ 100.5
million, at a payback time of 10 years.
13.6. Benefits to Consumers and Utility
From consumer‟s standpoint, considering the cost of electricity of 12.5 US cents per KWh,
and the benefits of tax exemptions for equipment and services (for both imports and local
production), the payback time of 10 years is quite long. However, considering the other
benefits, such as the quality and reliability of service of hot water supply will be improved
(since power cuts will no longer affect the availability and reliability of hot water service).
The benefit of this project to EDL is substantial. With regard to electricity demand, is
estimated to produce more than 1,500 GWh cumulative energy savings during the period
2011-2020. This translates into reduction of greenhouse gas emissions by an amount
equivalent to 1,313 000 tons of CO2 over the lifetime of the project19
.
13.7. Environmental Benefits
Figure 13: Total potential of energy saved and CO2 avoided for Collective SWHs
19
Based on during period (2011-2020) cumulated CO2 avoided is 413 000 Tons. Beyond 2020, the quantity of CO2 avoided per year is 90 000 tons for 10 years more (life time of the project: 20 years)
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
Years
Cumulated primary energy saved(TOE)
Cumulated CO2 avoided(Tons)
47
14. CDM/Carbon Finance Potential Benefits, Methodologies, and Approaches
14.1 CDM and Evolution of Carbon Markets
The Clean Development Mechanism (CDM) provides the opportunity for developing
countries to participate in the global carbon market, and is currently the only option under
the Kyoto Protocol for developing countries to attract climate-friendly investment. The
CDM is also a source of climate finance for countries in the Middle East and North
Africa region20
, as illustrated by a growing number of projects under development in this
region21
. The rules and regulations of the UN climate regime will change after 2012,
when the first commitment period of the Kyoto Protocol comes to an end. Whether there
is another commitment period of the Kyoto Protocol, and if so, what rules will apply, is
yet to be agreed. New mechanisms to support climate financing in developing countries
are being discussed within the context of the international negotiations on a post-2012
agreement on the mitigation of climate change. Many countries are exploring
opportunities to understand and engage with these emerging climate finance mechanisms.
Figure 14 - Concept of the CDM
Source: IGES, CDM in Charts (2011)
The concept of the CDM is illustrated in Figure 14. A project located in a non-Annex I
country like Lebanon reduces greenhouse gas emissions more than would be the case in
20
The majority of current CDM projects are located in India and China (UNEP Risø Centre, CDM Pipeline. http://cdmpipeline.org/publications/CDMPipeline.xlsx 21
82 CDM projects located in the Middle-East have to date been submitted for validation, 56 of which in 2008 or later. UNEP Risø Centre, CDM Pipeline. http://cdmpipeline.org/publications/CDMPipeline.xlsx
48
the business-as-usual scenario (e.g. SWH replaces grid based electricity which would
generate GHG emissions). If registered as a CDM project, one 1 carbon credit, called a
Certified Emission Reduction (CER), is issued for each 1 ton of carbon dioxide
equivalent (1 tCO2eq). This CER can then be traded on the international carbon market,
also called the global “compliance” market.
Approximately than 3000 CDM projects have reached the stage of registration with the
UNFCCC, while around 7000 projects are in the CDM pipeline, as of April 2011.
Around 576 million CERs have been issued by the UNFCCC.
Figure 15: CERs issued by sector
Source – www.cdmpipeline.org (April 2011)
14.2 CDM Strategies and Approaches
With regard to eligibility of CDM projects, it is important to keep in mind that: The
emission reductions have to be additional to the emissions in the baseline or business-as-
usual scenario; Participation in a CDM projects is voluntary; The CDM host country has
to confirm that the project contributes to sustainable development of the country;
Emission reductions from nuclear facilities are not allowed; Only afforestation and
reforestation are eligible sequestration activities. Before being able to generate carbon
credits, CDM projects have to follow a range of steps within a pre-determined project
cycle. Figure 16 shows the main steps in the CDM process.
The process of preparing a CDM project for approval by the country‟s Designated
National Authority (DNA) and for validation and registration is rigorous and time
consuming. Figure 16 shows the different steps involved and the estimated duration of
each step. The lead time is highly dependent on: The Letter of Approval issuance process
of the DNA; The quality of the Project Design Document (PDD); Independent accredited
auditor (Designated Operational Entity) involved.
In general, the more carefully and better prepared the CDM documents are, the faster the
project will proceed through the registration process. In the figure below the average
times for each step are indicated. The total duration of the registration process depends on
the quality of the PDD, capacity of the project sponsor and the processing speed of the
DOE and the CDM secretariat. In 2010, the average CDM project took over 600 days to
progress from validation to registration.
Figure 17: Approximate time line to CDM activity registration
Preparing Document Validation
Request Registration
CDM Registration
4-6 Months 4-12 Months 4-6 Months Total: 12-24
Pr o j e ct de si gn
PD D D e v e l o pm e n t V a l i da ti o n
Registratio
n
I m pl e m e n ta ti o n
M e t h o d o l o g y
M o n i to r i n g I s s u a n c e o f c r e d i t s
L e tte r o f A ppr o v a l
V e r i f i ca ti o n
50
14.3 Post -2012 Carbon Markets
The parties to the UNFCCC are discussing a follow-up of the GHG emission reduction
commitments under the current commitment period of the Kyoto Protocol. The CDM is
dependent on the Kyoto structure and without an extension of the existing commitments, the
carbon market will change, altering the value of investments in CDM projects.
The European Union (EU) will continue to accept some CERs in the EU emission trading
scheme (EU-ETS) also post 2012. This is the largest compliance carbon market, reaching a
trading volume of 118.5 billion US$ in 201022
. The EU-ETS largely determines the price of
the carbon credits until 2020, for projects that: Are registered by 31 December 2012; Are
located in a Least Developed Country (LDC). As Lebanon is not an LDC, Lebanon CDM
projects need to be registered with the UNFCCC by 31st December, 2012
23. Considering the
lengthy lead times for registration, this effectively means that the validation of CDM project
documentation should start in the summer of 2011. Therefore, the preparation of the PDD
should start in the first half of 2011.
14.4 CDM Methodology for Solar Water Heaters
In April 2011, a new small-scale CDM methodology for SWH, AMS I.J, was approved by
the UNFCCC‟s CDM Executive Board.24
This category comprises the installation of
residential SWH systems and commercial SWH systems for hot water production. The SWH
systems displace electricity or fossil fuel that would otherwise have been used to produce hot
water.
There are two types of projects included in the new CDM methodology AMS I.J: retrofits
and new construction. For the purposes of defining baselines and other requirements the
following definitions apply: (a) Retrofit projects are SWH project(s) that replace existing
electric or fossil fuel based water heating system(s) in existing facility(ies); (b) New
construction projects are: (i) SWH project(s) installed in new facility(ies); (ii) SWH
project(s) installed in existing facility(ies) that, prior to the project implementation, do not
have installed water heating systems; (iii) SWH project(s) installed in existing facility(ies)
which require water heating capacity expansions; or (iv) Replacement of failed solar water
heating system(s). For retrofit projects, the baseline system(s) are the operating water
heating system(s) and fuel source (fossil fuel or electricity) that existed immediately prior to
the start of the SWH project activity. For new construction projects, the baseline system and
fuel source (fossil fuel or electricity) assumed to be used for water heating is one that is
demonstrated to be typical of new construction, for the given project activity as defined in
paragraph 2 (b), in the region of the project activity at the time of the start of the project
activity. Such demonstration shall include that typical water heating systems in the project
22
State and Trends of the Carbon Market, 2010. 23Article 11a of the DIRECTIVE 2009/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, of 23 April 2009, amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community
24 For the detailed CDM methodology, see UNFCCC CDM website <cdm.unfccc.int>.
51
region are not solar water heating systems. Emission reductions are calculated as the energy
savings that result from the project implementation multiplied by an emission factor for the
electricity and/or fossil fuel displaced.25
Energy savings that result from the project implementation of SWH CDM project shall be
determined using one of following methods and the choice of a method shall be made ex ante
and specified in the PDD and cannot be changed during the crediting period. These three are
not presented in order of preference. Project developers shall select one of these methods
based on the following guidelines: (a) Model based method; (b) System metering method;
(c) Stipulated energy savings method.
15. Capacity Building and Dissemination
15.1 Capacity Building
Standards for SWH Systems: The standards established by LIBNOR are
comprehensive and consist of documents which are divided into several volumes
covering solar energy vocabulary, solar thermal systems, components, and custom built
systems. Part1contains: General requirements; Part2 contains: Test methods; and Part3
contains: Performance specifications for water storage tanks for solar water heating
systems. The documents contain specific information and definitions and the application
of standards can lead to more effective implementation only when the users and
beneficiaries (suppliers of solar systems, installers) are trained well to be able to
understand the requirements for certificates or approvals. The smooth implementation
of the standards also requires training of operating personnel of LIBNOR, LCEC, etc.
This training will be organized during the program establishment phase and shall be
conducted by the organization who developed the relevant standards, or ouside
specialized agencies.
Program Management Unit of the Proposed Program at LCEC:
The staff of the Program Management Unit (within LCEC) will consist primarily of
engineers, planners and financial managers. It will be essential that staff be involved in
targeted training sessions held in other countries with more experience in this field.
The solar programs in these countries are managed by national institutions like LCEC
and collaboration should be sought from some of these countries in sharing
implementation experiences and building capacity in Lebanon.26
Personnel responsible
25
For calculating the emission factor for displaced fossil fuels, reliable local or national data shall be used. IPCC default values shall be used only when country or project specific data are documented to be either not available or not reliable. 26
Similar programs are developed in several countries, including France, Greece, Tunisia and Morocco.
52
for managing the program specially in LCEC could benefit from visits to and targeted
training within similar agencies like the Agency for the Environment and Energy Saving
(ADEME, France), the National Agency for Energy Saving (ANME -Tunisia), the
Center for Renewable Energy Sources (CRES, Greece), or the Agency for Renewable
Energy and Energy Efficiency and Moroccan Agency for solar energy (Morocco). An
exchange of experiences, best practices, management and planning tools, and
monitoring and evaluation approaches could also be implemented within the framework
of partnership agreements with these institutions.
Training of suppliers and installers of SWHs, engineering firms, architects and
other stakeholders.
This training must be practical and provided by installers of SWHs already experienced
in other programs, by experts from consulting firms and architecture firms operating in
similar programs.
During the first two years of the proposed program, it will be necessary for LCEC
(Program Management Unit) to organize training sessions for suppliers, installers and
local consultants. These sessions should be taught by expert trainers in:
a. Project feasibility studies
Equipment sizing
Development of technical specifications
Control and performance testing of SWHs
Installation of SWHs
Maintenance of equipment and facilities
b. Technical and economic evaluation of a facilities, projects and programs.
c. Awareness, promotion and communication techniques.
Assisting research institutions to equip themselves with performance and
quality testing equipment for SWHs, solar panels and tanks
Although the proposed program sets strict specifications for the importation of
SWHs, solar panels and tanks, it is envisaged that laboratories (IRI, AUB, etc.) will
be equipped to test all components of SWH. The laboratories can also provide
facilities for tests of locally produced products.
Supporting a training center provide professional training modules targeted
for installers, service technicians, plumbers and electricians.
53
Market development of SWHs in Lebanon requires the development of a specialized
local labour pool with the necessary skills to provide sustainable and high quality
customer service. This objective can only be achieved through the establishment of a
specialized training centre for renewable energies with a specific focus on solar products
and systems. One of the existing training centers could be strengthened through training
modules and by hiring trainers with extensive experience. It is recommended that the first
two training sessions are geared towards the training of trainers who will then go on to
provide further training for technicians in electricity, plumbing and equipment
installation.
Organizing two training workshops for engineering offices and architects for
the design of facilities, technical and economic studies for collective solar water
heating systems.
The first phase of the proposed program will focus primarily on the residential sector
(households). But the tertiary sector (hotels, hospitals, etc.) with collective solar water
heating systems is another important area for development. Provision of collective solar
water heating systems for the tertiary sector is more complicated than individual SWHs
for the residential sector because, in the case of former, each installation requires a
detailed individual study before implementation. In order to undertake this study, it will
be necessary to train engineers and architects in the design of small solar water heating
systems, in conducting technical and economic feasibility studies and in monitoring and
evaluation. In this respect at least two comprehensive training sessions will be organized
by LCEC with the assistance of international consulting firms.
15.2 Promotion, communication and awareness program
Promotion and awareness campaigns are aimed to provide the different stakeholders with
information on the proposed program: Its objectives, specific conditions, eligibility for
the program, its impact on the level of the consumers and the government and its
institutional and financial mechanisms. The target group are: commercial banks,
representatives of concerned institutions, NGOs, the private sector, the big consumers,
the donors and development partners.
The promotion campaigns is intended to:
• promote the financial mechanism specific to individual SWHs and collective SWH
systems ;
• promote solar equipment and demonstrate their economic and environmental benefits;
• provide procedural information about the steps involved, and the main stakeholders,
who can provide guidance, information, finance, supply and installation of equipment,
These campaigns shall include radio and TV spots, brochures and posters and the
organization of one or more debates on local television channels.
54
Organization of a conference in Lebanon with representatives of public institutions
and private companies of other Mediterranean Countries who have successfully
developed national and regional markets for SWHs. During this event similar
programs will be presented along with the funding mechanisms and sources, the
institutional arrangements and roles of different stakeholders, objectives and outcomes
and the encountered barriers and identified solutions. This conference could be
organized in the middle of the first year of the proposed program..
Events for the various stakeholders to present the proposed program:
Organization of conferences and workshops to inform the public, policymakers, and
professionals about the institutional and financial mechanisms for the proposed
program (objectives, characteristics, conditions of eligibility) and its micro and
macroeconomic, social and environmental impacts. The target group: commercial
banks, representatives of relevant institutions, NGOs, private sector, large customers,
donors and development partners.
Elaboration of program content (TV spot, radio, spot, posters, stickers,
newspaper articles, conferences).
LCEC is in the process of sensitizing the general public on the importance of energy
efficiency, ways to achieve energy savings and reducing wastage.. To support the
broad-based effort for SWHs under the proposed program, the MEW along with
LCEC, will launch a dedicated campaign to promote the use of SWH. Promotion and
awareness raising will be critical toward success of the proposed program, and to help
establish a positive image for SWHs, and to trigger effective behavioral change in
energy savings and managing consumption without waste.
Target audience: The general public, institutions (building owners, hotels, hospitals,
etc.) policy and decision makers, SWH and component suppliers and installers, etc.
Strategy: Create awareness through advertisements that clearly state the benefits of
using SWH. As explained previously in the paper, there are clear benefits of large
scale use of SWHs to the consumers and to the electric utility, EDL and at country
level. People should be able to see that they are assisting the country in addressing the
energy crisis while at the same time, the actions are , directly beneficial to an
individual by lowering the household spending on electricity bills, and for getting
more reliable supply for meetnig the individual‟s hot water needs.
Media strategy: All forms of media are necessary to obtain the best outcomes from
the communication campaign.
Press strategy: Press is effective in building visibility and is particularly relevant to
reach the middle class.
55
Radio: Radio will be a key media to ensure that the message reaches the target market
sectors. LCEC should design appropriate and innovative programs
Television: A creative TV spot will reinforce the message and create widespread
awareness amongst the target group across the country.
Outdoor media: Use of outdoor media creates synergies across the media, building
recognition and consolidation of the advertising message. It is proposed that a more
innovative branding of street signs be undertaken in urban centers across the country.
Design and development of a website for the proposed program.
In order to facilitate promotion and increase visibility, it is important to develop a
web site, updated on a regular basis (at least once a quarter). This site will be hosted
within the LCEC and BDL websites.
16. Monitoring and Evaluation Approaches
Monitoring all activities of the proposed program will help to track and measure the success
as well as impacts of the program. In this context, specific studies should be carried out at
the end of the first two years, to help measure the impacts and to analyze the following:
Comparison of the achievements made in relation to planned activities;
Structure and evolution of the application for SWHs by consumers and suppliers
(number and types of beneficiaries, etc.).
Industrial dynamics created: number of suppliers and their capabilities, number of
installers, jobs created, integration and local manufacture, export;
Economic, environmental and social impacts :energy savings at the household level
and macroeconomic level, contribution to household savings (financial) and comfort
created, reduction of greenhouse gas emissions, improved quality of life
Conducting a prospective study on the development of a SWH sector in the medium
and long term.
o Organizing periodic meetings with the private sector (suppliers, installers and
banks) to discuss the behavior of SWH markets, problems, solutions and
improvements
There are three categories of stakeholders in the SWH sector in Lebanon:
1. Direct beneficiaries: beneficiary households and institutions (individual residential
Total CO2 avoided (Tons) 16650 36990 63540 92340 130500 176400 234900 297900 373500 458100
1880820
65
0
20000
40000
60000
80000
100000
120000
2011 2013 2015 2017 2019
Total m2 installed
Primary Energy Saved per year (TOE)
0
10000
20000
30000
40000
50000
60000
70000
80000
2011 2012 2013 2014 2015 2016
Num of Households
Total m2 installed
0
20000
40000
60000
80000
100000
120000
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
Num of Households
Total m2 installed
0
20000
40000
60000
80000
100000
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
Cumulated primary energy saved(TOE)
Cumulated primary energy saved(TOE)
66
Annex 2: List of contact persons
Pierre El Khoury Manager Solar Water Heaters Market Transformation and Strengthening Initiative, LCEC Tel/Fax: +961 1 565108 / 569102 Mobile: +961 3 427283 E-mail: [email protected] www.lcecp.org.Ib Ministry of Energy and Water Corniche du fleuve – 1st Floor , Room 303 Beirut-Lebanon
Nader Hajj Shehadeh Energy Engineer Solar Water Heaters Market Transformation and Strengthening Initiative, LCEC Tel/Fax: +961 1 565108 / 569102 Mobile: +961 70 153119 E-mail: [email protected] www.lcecp.org.Ib Ministry of Energy and Water Corniche du fleuve – 1st Floor , Room 303 Beirut-Lebanon
Rani Al Achkar Site Engineer Solar Water Heaters Market Transformation and Strengthening Initiative, LCEC Tel/Fax: +961 1 565108 / 569102 Mobile: +961 3 112766 E-mail: [email protected] www.lcecp.org.Ib Ministry of Energy and Water Corniche du fleuve – 1st Floor , Room 303 ; Beirut-Lebanon
Dr. Raymond Ghajar Advisor to the Minister Ministry of Energy and Water Republic of Lebanon Tel/Fax : +961 3 340547 E-mail : [email protected]
Dr. Adel Mourtada Board Member LGBC- Lebanon Green Building Council ECOTECH; P.O.Box: 113/6359 Beirut- Lebanon Tel/Fax: 00961 1 66 88 87 Mob: 00961 360 75 90 P.O.Box:11-3060 Riad El Solh Beirut-Lebanon [email protected]
Mohammad Tassi AUB-American University of Beirut BME,MEM,LEED Accredited Professional Project Manager; Facilities Planning & Design Unit P.O.Box 11-0236 , Riad El-Solh , Beirut 1107 2020 Lebanon Tel:+961-1-350000 (Ext:2080), Fax: +961-1-360107 Email: [email protected]
Lena Dergham Acting Director General Republic of Lebanon Ministry of industry Lebanese Standards Institution-Libnor Sin-el-Fil , City Rama Street , LIBNOR Bldg, P.O.BOX: 55120 Beirut , Lebanon Tel: +961 1 485927 – Fax: +961 1 485929 E-mail: [email protected]:www.libnor.org
Samir R.Traboulsi Board Member LGBC- Lebanon Green Building Council Thermotrade P.O.Box: 15 5400 Beirut- Lebanon Tel/Fax: 00961 1 84 10 65 Mob: 00961 3 38 29 60 P.O.Box:11-3060 Riad El Solh Beirut-Lebanon [email protected]
Loans granted for the above-mentioned projects should fulfill the following conditions:
1- They should be granted to finance new environmentally friendly projects or to finance projects in
place to turn them into environmentally friendly projects.
2- The settlement duration of the loan granted to finance a new environmentally friendly project shall
not exceed ten years, starting following the expiry of the grace period which varies between six months
and four years from the date the loan is granted.
3- The duration of the loan granted to finance the development of a project in place to turn it into an
environmentally friendly project shall not exceed ten years, including the grace period which varies
between six months and two years, starting from the date on which the loan is granted.
4- The loan shall not be fully or partially settled before maturity unless following the prior consent of
Banque du Liban.
Article 12:
28
NEERA was set up due to the joint efforts of the Banque du Liban and the United Nations Development Program (UNDP).
96
-Concerning the environmentally friendly loans whose value each does not exceed
thirty million LBP or the equivalent in foreign currencies:
It is necessary to obtain the approval of the Central Council of the Banque du Liban over
the overall amount to be invested in these loans.
-Concerning the environmentally friendly loans whose value each exceeds thirty
million LBP or the equivalent in foreign currencies:
It is necessary to obtain an individual consent from the Governor of the Banque du Liban
to benefit from the provisions of the present decision. To this end, the application is
submitted to the Financing Unit at the Banque du Liban in three copies, one of them
being original, comprising the following documents:
1- The loan contract duly signed between the borrower and the donor bank, clearly and
explicitly stating the objective of the loan.
2- A table showing the movement of withdrawing and settling the loan up till the date of
final maturity.
3- For the energy projects the client wants to be rated as environmental:
a- A report from a specialized engineering office (consultant) showing in detail the
environmental costs and the availability of environmental conditions according to
documents which prove the adopted standards and the execution plan based on a set
and clear timeline and showing the level of environmental rating the project may obtain
by an internationally recognized rating agency.
b- A document proving that the borrower did the registration to obtain an
environmental rating at the Leadership in Energy & Environmental Design (LEED)29 or at
an internationally approved rating agency.
29
LEED (Leadership in Energy & Environmental Design (LEED)) is an internationally acknowledged rating system of green buildings, affiliated to the US Green Building Council, which provides an independent rating to any building which was designed or built in order to save energy and the effective use of drinking water, reduce CO2 emissions and improve the internal environment of the building, and delivers a certificate in this regard.
97
c- A document proving that a Commissioning Agent who ensures the availability of
conditions in the achieved works and who may be the Consultant Office of the Project is
appointed according to the following conditions:
-He shall be independent from the party executing the project.
-He shall have sufficient experience proving that he has performed similar tasks for
projects of the same size and with similar administrative and technical complexities, at
least.
-His tasks should be set in details and in written before the start of the execution of the
project up till its completion.
d- The Technical Investigation Report from LCEC 30, for the party in charge of saving
energy thanks to environmentally friendly projects.
4- For projects for which the client does not have the intention to obtain an
environmental rating:
a- Report of the Consultant designated for the project, who performs the tasks of an
Energy Service Company (ESCO) and those of post-technical investigation of the project,
showing in details the environmental costs and the availability of environmental
conditions according to documents proving the adopted standards and the execution
plan, based on a set timeline.
b- The technical investigation report from LCEC, for the party in charge of saving energy
thanks to environmentally friendly projects.
c- The technical investigation report of an environmental expert for waste management,
water waste management and recycling projects.
30
The Lebanese Center for Energy Conservation (LCEC) is the financial center for energy saving, which makes sure of the technicality of the projects, located at the Ministry of Energy and Water Resources.
98
Article 13: The statutory reserve of any bank is reduced against the loans granted to
finance environmentally friendly projects, according to the discount conditions set in
present decision, as follows:
a- For loans in LBP, whose debit interests are not subsidized by the State:
1- 100% from the balances of the loans which are granted to finance the environmental
part of environmentally friendly projects in the non-energy sector, provided that
interests and commissions for these loans of any type whatsoever do not exceed 3%
calculated every year, starting from the date on which the loan is put into execution.
2- 150% from the balances of the loans which are granted to finance the environmental
part of environmentally friendly projects in the energy sector, provided that interests
and commissions of any type whatsoever calculated for these loans do not exceed 3%
minus 50% of the return of Lebanese Treasury Bills for one year, calculated every year
starting from the date on which the loan is put into execution.
b- For the loans in LBP guaranteed by “Kafalat SAL – Guarantee of Loans for Small and
Medium Enterprises”, whose debit interests are subsidized by the State:
100% from the balances of loans to finance the environmental part of environmentally
friendly projects in the energy sector, which are granted for fifteen years, provided that
interests and commissions of any type whatsoever for these loans do not exceed 3%,
calculated every year starting from the date on which the loan is put into execution.
Article 14: Term obligations subject to part of the statutory reserve are discounted
against the loans granted for the financing of environmentally friendly projects
according to the discount conditions set in the present decision, as follows:
- For loans in foreign currencies whose debit interests are not subsidized by the State:
1- 200% of the balances of loans granted to finance the environmental part of
environmentally friendly projects in the non-energy sector, provided that interests and
commissions of any type whatsoever for these loans do not exceed the cost of funds
plus 2%, calculated every year from the date on which the loan is put into execution.
99
2- 500% of the balances of loans granted to finance the environmental part of
environmentally friendly projects in the energy sector, provided that interests and
commissions of any type whatsoever for these loans do not exceed the cost of funds
plus 2% minus 50% of the return on Lebanese Treasury Bills for one year, calculated
every year, starting from the date on which the loan is put into execution.
- For the loans whose debit interests are subsidized by the State:
1- 200% of the balances of loans granted in LBP or in foreign currencies to finance the
environmental part of environmentally friendly projects, provided that interests and
commissions of any type whatsoever do not exceed the interest rate on Lebanese
Treasury Bills for two years for the loan granted in LBP, the LIBOR rate for three months
plus 6% for the loan granted in USD, and the EURIBOR rate for three months plus 6% for
the loan granted in Euro, calculated every year starting from the date on which the loan
is put into execution.
2- 500% of the balances of the loans, object of the above-mentioned item (1), after the
elapse of the seven-year period during which debit interests are subsidized by the State,
provided that interests and commissions of any type whatsoever, once the subsidizing
period expires, do not exceed the interest rate on the Lebanese Treasury Bills for two
years minus 2.5% for the loan granted in LBP, the LIBOR rate for three months plus 2.5%
for the loan granted in USD, and the EURIBOR rate for three months plus 2.5% for the
loan granted in Euro, calculated every year starting from the date on which the loan is
put into execution.
Article 15: The environmental part of the loan granted to finance environmentally
friendly projects, on the basis of which the statutory reserve is reduced or term
obligations subject to part of the statutory reserve are discounted, is calculated
according to the following table:
Nature
of the
project
Level of
rating
Environmental
part
100
New
project
Not rated 15% of the value
of the project
Certified 15% of the value
of the project
Silver 25% of the value
of the project
Gold 35% of the value
of the project
Platinum 45% of the value
of the project
Existent
project
Rated or
non-
rated
Environmental
Cost
The real estate value is not calculated within the value of the project upon calculating
the environmental part of the project according to the rates set in the above-mentioned
table.
The rating of the Leadership in Energy & Environmental Design (LEED) or that of an
equivalent internationally recognized rating institution or agency is adopted.
Article 16: Concerned banks shall obtain the consent of the Banque du Liban over any
amendment of the loan, the value of which exceeds thirty million LBP or the equivalent
in foreign currencies, granted to the financing of environmentally friendly projects, of
the maturity, the ceiling, the currency or the settlement table of loan. They shall also
notify the Banque du Liban of any other amendments on the loan.
Article 17: The Banque du Liban, in cooperation with the European Union, offers a grant
to subsidize loans whose value does not exceed /1 500 000 000/ LBP or the equivalent in
foreign currencies, granted to finance small and medium-enterprises to finance
environmentally friendly projects in the energy sector, the maturity of which not
exceeding ten years:
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1- By 15% of the value of the loan granted to non-productive sectors, whose debit
interests are not subsidized by the Lebanese State.
2- By 5% of the value of the loan granted to productive sectors, whose debit interests
are subsidized by the Lebanese State.
The Banque du Liban earmarks, upon request, the value of the grant for the concerned
project following the technical investigation of the project performed by a specialized
institution.
The amounts allocated to the project are disbursed through the bank, provider of the
loan, upon a request submitted following the completion of the works pertaining to
saving energy, renewable energy, and green buildings, based on documents proving the
good execution of these works.
Article 18: The statutory reserve of any bank is reduced by 150% of the balances of
loans granted to finance the purchasing of solar water heating systems, provided that
the interest equals 0% and that the overall purchasing value is settled in monthly
installments extending over five years.
The Ministry of Energy and Water Resources, in cooperation with the Banque du Liban,
offers to the concerned bank a grant of 200 USD (two hundred American Dollars), to be
settled once the loan is granted and is allocated to settle the last installments, provided
that the supplier is among the companies specialized in selling and installing solar water
heating systems and approved by LCEC.
Article 19: In case the final rating of the environmentally friendly project in the energy
sector upon the completion of the execution is less than the rating on the basis of which
the loan is granted upon the start of the project, the concerned bank is compelled, upon
the first request of the Banque du Liban, to settle a compensation, as a penal clause,
equal to the one-year interest rate on Lebanese Treasury Bills, over the difference
resulting from the rating difference, in the value on the basis of which is calculated the
statutory reserve reduction or the discount of term obligations subject to part of the
statutory reserve, which is calculated from the date of signature of the contract and for
a period equal to that during which it benefited from reduction.
102
Article 20: Islamic banks undertaking operations to finance environmentally friendly
projects, when applicable, may benefit from the provisions of Paragraph 6 of the
present decision, provided that the return for every contract is calculated according to a
set rate equivalent to the interests applied to the loans, object of the mentioned
paragraph 6, calculated on the date on which the contract was signed.
Article 9: The texts of Forms RO-11, ARO-01, ARO-02, ARO-09, ARO-10, ARO-17, ARO-25, and ARO-26
annexed to Basic Decision No 7835, dated June 2, 2001, are cancelled and replaced by the new texts of
the mentioned forms which are annexed to the present decision.
Article 10: The Form ARO-37 annexed to the present decision is added to Basic Decision No 7835, dated
June 2, 2001.
Article 11: The present decision enters into force on Thursday, two weeks following the date of its
promulgation.
Article 12: The present decision is published in the Official Gazette.
Beirut, on November 25, 2010
The Governor of the Banque du Liban
Riad Toufic SALAMEH
103
Banque du Liban Form No: RO-11(1/5)
Directorate of Economic Statistics and Research
Obligations in LBP subject to the statutory reserve
Average between ____________________ and ____________________________
Name of the Bank: No:
Thousand
LBP
Number of account in the position of banks (Form – 2010)
Obligations
upon
request
Term
obligations
Total
20100 Issuing institutions / Non-resident
20200
(20280)
Banks / Non-resident
- Minus: Non-due interests
20300
(20380)
Mid- and long-term credit banks/Resident and non-resident
- Minus: Non-due interests
20500
(20580)
Other registered financial institutions/Resident and non-resident
- Minus: Non-due interests
20800
(20841)
(20842)
(20871)
(20895)
Deposits of Clients / Resident and non-resident
- Minus: Housing borrowing/Saving program accounts (1)
- Minus: Deposits of the housing body of non-conscript military men (1)
- Minus: Guarantees of documentary credits for import (1)
- Minus: Non-due interests
24300 Deposits originating from fiduciary contracts/Resident and non-
resident
20900
(20980)
Deposits of the public sector/Resident and non-resident
- Minus: Non-due interests
21000 Repayable values/For residents and non-residents
21210 Various creditors, Private sector/Residents and non-residents
104
21300
(21325)
(21330)
(21350)
Partners/Residents and non-residents
- Minus: Non-due interests
- Minus: Monetary benefits as a guarantee to doubtful debts (1)
- Minus: Deposits to increase shareholders’ equities (1)
21700
(21730)
Loans based on bonds/From residents and non-residents
- Minus: Non-due interests (1)
23000 Foreign branches
23100
(23180)
Mother institution, resident and non-resident sister and affiliated
financial institutions, except for resident commercial banks
- Minus: Non-due interests
23200 Out of which: Certificates of deposit and banking certificates sold to
other than resident commercial banks
23300
(23380)
Registered exchange institutions/Resident and non-resident
- Minus: Non-due interest
23700
(23780)
Intermediation institutions/Resident and non-resident
- Minus: Non-due interests
23800
(23880)
Leasing institutions/Resident and non-resident
- Minus: Non-due interests
Total of obligations in thousand LBP
(1) Accounts No 20841, 20842, 20871, 21330 and 21730 are discounted from term obligations.
105
Banque du Liban Form No: RO-11(2/5)
Name of the Bank: No:
Position closed on Wednesday on:
Authorized reductions from term obligations in LBP From term obligations
(thousand of LBP)
a-Balances of mid- and long-term loans
-Code a1: Mid- and long-term loans for productive sectors not mentioned below
-Code a2: Housing loans
-Code a3: Loans whose interests are subsidized, not mentioned below
-Code a31: Loans granted based on the convention signed between the Republic of Lebanon and the
European Investment Bank, whose interests are subsidized
-Code a32: Loans granted and financed by AFESD, AFD, OPIC, EIB, and IFC, whose interests are
subsidized
-Code a33: Loans granted in foreign currencies against a guarantee from AFESD, AFD, OPIC, EIB, and
IFC, whose interests are subsidized
-Code a34: Loans allocated to finance the needs of the operational capital of tourist institutions, whose
interests are subsidized
-Code a0: Loans for productive sectors, which have become within the postponed maturity period and
whose interests are no more subsidized
-Code a4: Loans granted in foreign currencies against a guarantee from Kafalat, whose interests are not
subsidized
-Code a5: Loans granted in foreign currencies against a guarantee from Kafalat, whose interests are
subsidized
-Code a8: Loans financed by AFESD, AFD, OPIC, EIB, and IFC, whose interests are not subsidized
-Code a9: Loans granted in foreign currencies against a guarantee from AFESD, AFD, OPIC, EIB, and IFC,
whose interests are not subsidized
b-Bonds and debt instruments
-Code b1: Bonds approved by the BDL, within the purchasing price limits
-Code b2: Purchased debt instruments in foreign currencies and credits granted to financial institutions
and collective investment institutions to be exclusively used to buy debt instruments in foreign
currencies
106
Code b21: Debt instruments from the public sector and relevant credits
Code b22: Debt instruments from the private sector and relevant credits
-Code b3: Debt instruments issued by the private sector and benefiting from discounts
Total of balances of loans, bonds and instruments benefiting from the reduction of term obligations (a+b)
107
Banque du Liban Form No: RO-11(3/5)
Name of the Bank: No:
Position closed on Wednesday on:
Authorized reductions from term obligations in LBP From term obligations
(thousand of LBP)
c-Loans granted in foreign currencies, benefiting from the reduction of term obligations by 200% of
their balances
-Code a35: Loans granted to finance environmentally friendly projects, whose interests are subsidized
-Code a11: Loans granted in foreign currencies to finance environmentally friendly projects in the non-
energy sector, whose interests are not subsidized
-Code a19: Balances of loans granted in foreign currencies to productive sectors not mentioned below,
benefiting from the incentives of 2009
-Code a29: Balances of housing loans granted in foreign currencies, benefiting from the incentives of
2009
-Code a49: Balances of loans granted in foreign currencies against a guarantee from Kafalat, whose
interests are not subsidized and benefiting from the incentives of 2009
-Code a89: Balances of granted loans financed by AFESD, AFD, OPIC, EIB, and IFC, whose interests are
not subsidized and benefiting from the incentives of 2009
-Code a99: Balances of loans granted in foreign currencies against a guarantee from AFD, OPIC, EIB, IFC,
and AFESD, whose interests are not subsidized and benefiting from the incentives of 2009
-Code v09: Balances of other loans granted in foreign currencies, benefiting from the incentives of 2009
Total of balances of loans benefiting from the reduction of term obligations by 200% from their
balances
(c)
d-Loans granted in foreign currencies, benefiting from the reduction of term obligations by 500% of
their balances
-Code a12: Loans granted in foreign currencies to finance environmentally friendly projects in the
energy sector, whose interests are not subsidized
-Code a13: Loans granted to finance environmentally friendly projects once the interests are no more
subsidized
Total of balances of loans benefiting from the reduction of term obligations by 500% of their
balances
(d)
Total of reductions from term obligations ((a+b) + (cx2)) + (dx5)
108
109
Banque du Liban Form No: RO-11(4/5)
Name of the Bank: No:
Position closed on Wednesday on:
Authorized discounts from the statutory reserve (1) Thousand of LBP
e-Balances of loans not benefiting from the incentives of 2009
-Code p: Housing loans granted in LBP, based on the protocol signed with the Public Housing Institute
-Code q1: Loans granted in LBP against a guarantee from Kafalat, whose debit interests are not subsidized
-Code q2: Loans granted in LBP against a guarantee from Kafalat, whose debit interests are subsidized
-Code q3: Loans granted in LBP to finance environmentally friendly projects in the energy sector against a
guarantee from Kafalat, whose debit interests are subsidized
-Code r: Loans granted in LBP against a guarantee from AFESD, AFD, OIC, EIB, and IFC, whose interests are
subsidized
-Code i: Housing loans financed by credits granted in LBP to the Banque de l’Habitat
-Code s: Loans granted in LBP directly to the Public Housing Institute
-Code m1: Housing loans granted in LBP, based on the protocol signed with the housing body of non-conscript
military men
-Code m2: Loans granted in LBP directly to the housing body of non-conscript military men
-Code m3: Loans granted by the housing body of non-conscript military men, before February 6, 2009, and
assigned in favor of the bank
-Code h1: Small loans in LBP granted with the approval of the micro-lending institutions
-Code h21: Small loans in LBP financed by the credits granted to micro-lending institutions
-Code h22: Small loans in LBP financed by the credits granted to financial institutions
-Code t: Loans granted in LBP against a guarantee from AFESD, AFD, OPIC, EIB, and IFC, whose interests are not
subsidized
-Code u: Loans granted in LBP to follow up the studies in higher education institutions
-Code ev1: Loans granted in LBP to finance environmentally friendly projects in the non-energy sector, whose
interests are not subsidized
-Code ev2: Loans granted in LBP to finance environmentally friendly projects in the energy sector, whose
interests are not subsidized
110
-Code ag: Agricultural loans granted in LBP, based on the protocol signed with the Ministry of Agriculture
-Code dp: Housing loans granted in LBP, based on the protocol signed with the Ministry of the Displaced
-Code jr: Housing loans granted in LPB, based on the protocol signed with the mutual fund of judges
-Code i10: Housing loans financed by loans granted to the Banque de l’Habitat, according to the decision of the
Central Council No 16/26/10, dated August 11, 2010
-Code fs: Housing loans granted in LBP, based on the protocol signed with the Directorate General of Internal
Security Forces
Remark: For the categories of loans not benefiting from the incentives of 2009, the adopted rates of
reduction from the statutory reserve are applied as follows: