SAARC SAARC DevelopmentFund...SAARC Member States have immense in-house capabilities. Such an initiative could harmonise and synchronise these capabilities. This is likely to lead

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SAARC DevelopmentFund

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Thematic Areas

Economic & Infrastructure Windows SAARC Development Fund

Under

SDF Partnership Conclave 2018, New Delhi

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Table of Contents

Economic Window

Co-financingofCross-BorderE-CommerceProjects .......................................5

Co-financingofCross-BorderProjectsfacilitatingintraSAARCTradeand ........ 11 InvestmentinCommodities,ProductsandServices

Cross-BorderIntegratedBackwardandForwardlinkagesfor ........................ 17 ProcurementandDistributionofAgroCommodities

Infrastructure Window

Co-financingofcrossborderprojectrelatedtoclimatechange ...................... 23

Co-financingRoadtransportconnectivityprojects ........................................ 33

Co-financingofhydroelectricpowerprojectsinSAARCMemberStates ........... 39

Co-financingofWindenergygenerationprojectsandassociated .................. 43 supplychain

IntraSAARCEnergyGridandintraSAARCTradinginEnergy ......................... 47

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Economic and Infrastructure WindowsSAARC Development Fund

SAARC


Opportunities to co-finance Cross-Border

Projects in E-Commerce Under

EconomicWindowofSAARCDevelopmentFundProjectinSouthAsia

AThematicProjectConceptNote

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Cross-Border E-Commerce Projects facilitating Intra SAARC Trade and Investment in Commodities, Products and Services

I. Title of the theme

Co-financingofCross-BorderE-CommerceProjectsfacilitatingIntraSAARCTradeandInvestmentinCommodities,ProductsandServices.

II. SAARC Member States likely to be involved

Intheinitialphase,SAARCMemberStatesmayinclude:

• Afghanistan-Pakistan

• Bhutan-India

• Bangladesh-India

• India–Nepal

• Maldives-India

• SriLankaIndia

III. Compliance to SAARC Development Fund Charter• ConsideringthatthethemeinvolvesandbenefitingatleasttwoSAARCMember

States;itfulfillsthebasiceligibilitycriteriaforfinancingstatedunderArticle5oftheSDFCharter.

• AsperClause#10ofSDFapprovedPolicyGuidelinesforE&IWindows,SDFwillparticipateinco-financingtominimizeriskandtogaininstitutionalexperienceoffundingintheregion

IV. Classificationofproject:

Basedonthenatureoftheproject,theprojectisclassifiedundertheEconomicWindowofSDF.

V. Overview of the theme

Background

ThecountriesofSouthAsiahavemadesignificantdevelopmentinrecentyearsandtheRegionisoneofthefastestgrowingregionsofAsiawithGDPgrowthrateofover5%inFY16andFY17(Source:Variousresearchreports);however,significantchallengeforSouthAsiaistherelativelackofintraregionaltrade.

RegionalintegrationhasbeenconsideredasoneofthemostimportantstrategiesfordevelopmentofSAARCMemberStatesandinstrumentalinpromotingeconomicgrowthanddevelopmentoftheeconomy,particularly,throughintra-regionaltradeandcross-borderinvestment.

Cross-Border Ecommerce Projects facilitating Intra SAARC Trade and Investment in Commodities, ProductsandServices:Economic&InfrastructureWindows,SAARCDevelopmentFund

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WhileSouthAsiamadesignificantprogressinintegratingwiththeglobaleconomy,integrationwithintheregionremainedlimited,andtheregion isyettoharnessthe beneficial effects of common cultural affinity, common geography, and theproximityadvantagewithintheregion.ItisestimatedthatCountrieslikeBhutanandNepaltrademostlywithotherSAARCmembers,while,India,Pakistan,SriLanka,Afghanistan,BangladeshandMaldives trademostlywith the rest of theworld.(https://www.eximbankindia.in/Assets/Dynamic/PDF/Publication-Resources/ResearchPapers/43file.pdf).

UseofInformationandCommunicationTechnologyhasledtoboominE-CommerceinSAARCMemberStatescuttingacrossgeographicalboundaries.Thethemeproposestoenhance tradeamongSAARCMemberStates,currentlyestimated tobe lessthan4%ofthetotaltradeofSAARCMemberStates,byleveragingInformationandCommunicationTechnologyanddevelopinganE-CommercemodelforsellingandpurchaseproductsdevelopedinSAARCMemberStates.Stakeholders,construedasPartnerscouldfacilitatelogisticandwarehousing,transportation,developmentandmaintenanceoftheportal,developmentofpaymentgatewayamongothers.ThisislikelytoenhancetradeamongSAARCMemberStates,provideemploymentgenerationandenhanceRegionalIntegrationandeconomicconnectivity.

VI. Proposed model

Trade

E-Commerceportal

o DevelopmentofanintegratedE-Commerceportal.

o In-houseandthe intra-SAARCcapabilities indevelopmentofsuchportalshouldbeencouraged.

o PortalismanagedbyaSponsor.

o Theportalcouldbesegregatedalongproductandservices.

o The portal list key products and services offered by entities of SAARCMemberStates.

Enrollingentitiesprovidingsuchservices

o Itcouldcontainlistofentitiesprovidingsuchproductsandservices.

o AllkeytradingentitiesofSAARCMemberStatesareencouragedtobecomemembers.

Productsandservices

o The portal, like any typical E-Commerce portal, list products and pricesalongwithdeliverchargestodifferentSAARCMemberStates.

LogisticandWarehousingsolution

o Entitiesprovidingseamlesslogisticsolutionfordeliveryandwarehousingcouldberopedin.


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Lastmileconnectivity

o Government/ Semi government likeDepartment of Post in each SAARCMemberStateentitiescouldberopedintoprovidelastmileconnectivity.

Specializedservices

o The portal could also provide specialized services with SAARC MemberStatesnotablyin

– DiagnosticandHealthcare

• DiagnosticMedicalreportscouldbereferredtootherSpecialistinSAARCMemberStatesfor2nd opinion.

– ITEnabledServices

• ITenabled services couldbeprovidedwithin specialized servicesratherthanseekingsuchservicesfromoutsideSAARCRegion.

– E-learning

• TrainingandDevelopmentthroughE-learning

– ResearchandDevelopment(R&D)

• CrossbordersharedR&D

Paymentgateway

o Payment gateway could be provided by leading banks and financialinstitutions

o ThegatewayshouldbeencouragedtobedevelopedbyintraSAARCentitiesratherthanrelyingonoutsideregion.

SAARCMemberStateshaveimmensein-housecapabilities.Suchaninitiativecouldharmoniseandsynchronisethesecapabilities.

This is likely to lead to increase in intra-SAARC trade and investment as the companies are likely to get closer to the demand/ need/ competitive advantage matrix.

SDFmayexploreco-financingofsuchtradeprovideditmeetsitsinternalrequirements.

VII. Key requirements• E-portal

• EfficientLogisticsolution

• Warehousingtoachieveeconomiesofscale

• Paymentgateway/e-payment

• Co-financingsolution


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VIII.Benefits• LeveragingE-CommercelikelytoleadtoincreaseinintraSAARCtrade,facilitate

developmentandintegrationoflocalindustriesaslargecompaniesmayexploresourcingsolutionfromwithSAARCMemberStates→enhanceintraregionaldependenceandjobcreation.

• EmploymentcreationasintraSAARCresourcesarepooledintocatertothehugedemandoftheSAARCregion.

ItisliketocontributetoRegionalIntegrationandEconomicConnectivity.

IX. Conclusion

Leveraging E-Commerce to facilitate Intra SAARC Trade and Investment inProductsandServices is likelytoenhancetradeamongSAARCMemberStates,provideemploymentgenerationandenhanceRegionalIntegrationandeconomicconnectivity.

X. Contact

[email protected]

Director,[email protected]

AssistantDirector,[email protected]

Chief Executive Officer, SAARC Development Fund, III Floor, BDBLBuilding,NorzinLam,PostBoxNo928,Thimphu,Bhutan,PhNo:+975-2-321152/53.


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SAARC


Opportunities to Co-finance Cross-BorderProjects enhancing Intra SAARC Trade

and Investment in Commodities, Products and Services

UnderEconomicWindowofSAARCDevelopmentFund

ProjectinSouthAsia



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Cross-Border Projects facilitating Intra SAARC Trade and Investment in Commodities, Products and Services


Distributionofagrocommodities:Co-financingofCross-BorderProjectsfacilitatingIntraSAARCTradeandInvestmentinCommodities,ProductsandServices.



• Afghanistan-Pakistan

• Bhutan-India

• Bangladesh-India

• India–Nepal

• MaldivesIndia

• SriLankaIndia







Background



Cross-Border Projects facilitating Intra SAARC Trade and Investment in Commodities, Products and Services:Economic&InfrastructureWindows,SAARCDevelopmentFund

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WhileSouthAsiamadesignificantprogressinintegratingwiththeglobaleconomy,integrationwithintheregionremainedlimited,andtheregion isyettoharnessthe beneficial effects of common cultural affinity, common geography, and theproximityadvantagewithintheregion.ItisestimatedthatCountrieslikeBhutanandNepal trademostlywithotherSAARCmembers,while, India,Pakistan,SriLanka,Afghanistan,BangladeshandMaldives trademostlywith the restof theworld.

(https://www.eximbankindia.in/Assets/Dynamic/PDF/Publication-Resources/ResearchPapers/43file.pdf).

An integralcomponentofeconomic integration is investment.SouthAsia isyettoemergeasaprimedestinationforforeigninvestment.TheWorldInvestmentReport,2016,oftheUnitedNationsConferenceonTradeandDevelopmentrevealsthatwhileFDIinflowstoSouthAsiaincreasedfromUSD36billionin2013toUSD50 billion in 2015, it is significantly less compared to East andSoutheast AsiawherethesenumbersstandatUSD350billionandUSD448billionfor2013and2015,respectivelyalsodrivenbyintra-regionalFDIinflowswithintheAssociationofSoutheastAsianNations(ASEAN)regionalmost~18percentoftotalFDIflowsin the region (http://www.thehindu.com/opinion/op-ed/Coming-closer-together-for-trade/article14628676.ece).SouthAsia’sshare inworldFDI inflows in2015stoodata~2.9percent.

Lackofcomplementarities,diversificationofexportbasketsandsupply-constraintsappeartobethesomeofthekeybarrierstointraSAARCtradeinCommodities,ProductsandServices.ItisoftenreportedthatinformaltradeamongtheSAARCcountriesinagrocommoditiesandotherproductstakesplaceonalargescale.

VI. Proposed model

Trade

• DevelopmentofanintegratedtradingportalmanagedbyaSponsor.

• StatetradingcompaniesofallSAARCMemberStatesbecomememberofthisportal.

• AllkeytradingentitiesofSAARCMemberStatesalsobecomemembers.

• Theportalcouldbesegregatedalong

o Product/commoditylines:Someofthepotentialsegregation,asaconcept,couldbe

– Agroproductsandcommodities

– Autoancillaries

– Cement

– Consumerproducts

– Essentialcommodities

Cross-Border Projects facilitating Intra SAARC Trade and Investment in Commodities, Products andServices:Economic&InfrastructureWindows,SAARCDevelopmentFund

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– GarmentandFabric

– PharmaceuticalsandMedicines

– Steel

– Textiles

– Others

o Services…….Someofthepotentialsegregation,asaconcept,couldbe

– InformationTechnology

– Healthcare

– Others

• Product categorization could contain link of key companies in each SAARCMemberStateontheseproductsalongwithcontactdetails.

• AnyentityinaSAARCMemberStatedesirousofimportingsuchproductscouldcontactthesuitablevendorsforquotes.

• Uponsuccessful completionofnegotiations, theexportercouldapproach itsBankforavailingfinance.

A conscious effort to provide incentives for intraSAARC trade could always bebeneficial.

Increaseinintra-SAARCtradeisalsolikelytoleadtointraSAARCInvestmentasthecompaniesarelikelytogetclosertothedemand/need/competitiveadvantagematrix.

SDF may explore co-financing of such trade provided it meets its internalrequirements.

VII. Key requirements• E-portal

• EfficientLogisticsolution

• Warehousingtoachieveeconomiesofscale



Cross-Border Projects facilitating Intra SAARC Trade and Investment in Commodities, Products and Services:Economic&InfrastructureWindows,SAARCDevelopmentFund

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VIII.Benefits• Increase in intra SAARC trade is like to provide facilitate development and

integrationoflocalindustriesaslargecompaniesmayexploresourcingsolutionfromwithSAARCMemberStates→enhanceintraregionaldependenceandjobcreation.

• It is likely to enhance competitiveness of key industries through sourcingintegrationandleadtodevelopmentofnewvendors.

• Developmentofsupplychainthatcouldbecomecompetitiveandprovidemuchneededforeignexchange.

• Employmentcreationthroughdevelopmentofsecondaryandtertiarysector.

ItisliketocontributetoRegionalIntegrationandEconomicConnectivity.

IX. Conclusion

Co-financingofCross-BorderProjectsfacilitatingIntraSAARCTradeandInvestmentinCommodities,ProductsandServicesislikelytoenhancetradeamongSAARCMemberStates,provideemploymentgenerationandenhanceRegionalIntegrationandeconomicconnectivity.

X. Contact

[email protected]




Cross-Border Projects facilitating Intra SAARC Trade and Investment in Commodities, Products andServices:Economic&InfrastructureWindows,SAARCDevelopmentFund

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SAARC



Integrated Procurement and Distribution of Agro Commodities


ProjectinSouthAsia



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Cross-Border Integrated Backward and Forward linkages for Procurement and Distribution of Agro Commodities


Distributionofagrocommodities:Co-financingofCross-BorderIntegratedBackwardandForwardlinkagesforProcurementandDistributionofAgroCommodities



• Bhutan-India

• BangladeshIndia

• India–Nepal

• MaldivesIndia

• SriLankaIndia







Background


It is estimated that agriculture export trade of SAARC Countries grew to USD32billionfromaboutUSD5.6billionovertheperiod2010-1990.Another,studyshows that about 53% of intra-regional import trade was excluded from tariffliberalizationunderSAFTAin2006(WorldBank,2016:http://www.worldbank.org/en/news/infographic/2016/05/24/the-potential-of-intra-regional-trade-for-south-asia).

Cross-Border Integrated Backward and Forward linkages for Procurement and Distribution of Agro Commodities:Economic&InfrastructureWindows,SAARCDevelopmentFund

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Lackofcomplementarities,diversificationofexportbasketsandsupply-constraintsappeartobethesomeofthekeybarrierstoagrocommoditytrade.It isoftenreportedthatinformalagriculturaltradeamongtheSAARCcountriestakesplaceonalargescale.

Someoftheproblemsinagrocommoditiessupplychainare:

• Multiplestakeholdersworkinginisolation:Theagrocommoditiessupplychainis complexwith perishable goods and numerous uncoordinated small stakeholders.

• Presenceoflargenumberofunorganizedretailers:Atpresenttheunorganizedretailersare linkedwithfarmersthroughwholesalersorcommissionagents.The commission agents and wholesalers redundant supply chain practicesmakeunorganizedfurtherinefficient.

• Lack of demand estimation: Demand forecasting is totally absent and thefarmersandsupplierstrytopushwhatevertheyproduceintothemarket.

• Lack of technology applications: agro commodities supply chainsmay takeadvantageoftechnologyimprovementsindatacaptureandprocessing,producttracking and tracing, synchronized freight transport transmit times for timecompressionalongthesupplychainandsupply-demandmatching.

(Source: Facilitating vegetable production and marketing by developing efficient Vegetable Supply Chain in Bhutan – Dr. Tayan R. Gurung, Specialist-II, DoA, Royal Government of Bhutan).

VI. Proposed model

Farmers local purchasing at village level aggregation at local level warehousing district level aggregation warehousing distribution usingSpokeandHubModeldemandassessmentreleaseofagrocommoditiestoretailoutletssurplusexports

• Formation of apolitical bodies:FormationofSpecialPurposeVehiclewithproducerofagrocommoditiesasstakeholderslikecooperativesatlocallevel(workingunderprofessionalmanagementalongthelinesofcorporateentities)thatfacilitate

o agrocommoditiesproducemanagement

o Seeddistribution

o Purchaseoftheagrocommodities

o Cropinsurance,ifavailable

o Availabilityoffinance

• Farmers Welfare/ Service Centre:Worksalongthelinesof‘e-chaupal’andKisan Seva Kendra in India

o Disseminatesinformationaboutweather

o Mobileapplication


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o Soil and crop

o Availabilityofpestresistant,droughtresistantseeds

o Coordination with

– Aggregators

– Mobileoperatorsfortimelydisseminationofinformation

• Aggregatorslikecooperatives/federationsforpurchaseofagrocommodities

• Warehousing for the purchases using traditional/ local techniques forenhancingthelifeoftheagrocommoditieslikewarehousingincoldclimate/aircooledwarehousesthatfacilitatemodulatedairflow.

• Retailing:retailoutletsatmajortownsalongthelinesofoutletsinotherSAARCCountries.

• Demand estimation:Retailoutletstofeedindaily/weeklydemandonwebportal/throughmobileapplicationasisthemandatoryrequirementinoutletsinotherSAARCCountries.

• Tie up with Outlets under Modern Tradetoselltheproducts.

• Exports:Produce/stock inwarehousenetofthedemandforecastcouldbeexported

o TieupwithretailoutletssellingsimilarproductsinotherSAARCMemberStates,

o TieupwithModerntradeoutletsatlocallevel,

o TieupwithoutletsunderModernTradeinotherSAARCMemberStates(fore.g.retailchainsthatalsosellagrocommodities).

• Imports: The logistics so developed could be used for imports leveraginglogistic,warehousingandretailnetwork.

VII. Key requirements• Warehouses:lowcostwarehouses

• E-portalthatalsofacilitatesdemandestimation

• MIS:ReliableMISfortrackingthepurchases,materialinwarehouse,materialintransitandmaterialsold


• Co-financingfor

– Constructionofwarehouses

– Containersfortransportation

– Purchaseofagrocommoditiesfromfarmers

– Developmentofe-portal

– Availabilityofreliableseeds


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– FarmersWelfare/ServiceCentre

– Mobileapplication

– Land/spaceavailabilityandConstructionofretailoutlets

VIII.Benefits

S No Challenges LikelyBenefits1. Multiplestakeholdersworking

in isolation• Stakeholdersworkingincoordination

2. Presenceoflargenumberofunorganizedretailers

• Outletsatmultipleenderuser

3. Lackofdemandestimation • Forecasteddaily/weeklydemandbytheretailoutletasisthepracticeinSafaloutlets

4. Lackoftechnologyapplications • Technologyapplicationfor

o Weather

o Demandestimationfromendconsumers

5. Priceadvantagetofarmers • Sellingofproduceatreasonablepricewithoutinvolvementofmultipleretailers

6. Priceadvantagetoretailers • Affordablepriceofagrocommoditiesasmiddlemenareremoved

7. Extensionofthemodeltosellotherproducts

• Themodelandtheinfrastructurecouldbereplicatedtosellotherproductsproducedatvillagelevelnotablyhandicrafts

8. Replication • ReplicationinotherSAARCMemberStates

IX. Cost implications

Detailedcostmaybeworkedoutinconsultationwiththestakeholders.

X. Conclusion

Co-financing of Cross-Border Integrated Backward and Forward linkages forProcurementandDistributionofAgroCommodities inSAARCMemberStates islikely to eliminate presence ofmultiple layers ofmiddlemen, provide value tofarmersandpurchasersandenhanceregionaltradeofAgroCommoditiesinSAARCMemberStates.


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XI. Contact

[email protected]



Chief Executive Officer SAARC Development Fund, III Floor, BDBLBuilding,NorzinLam,PostBoxNo928,Thimphu,Bhutan,PhNo:+975-2-321152/53.


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Projects related to Climate ChangeProject in South Asia

UnderInfrastructureWindowofSAARCDevelopment

Fund



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Environment and Climate Change

I. Theme

EnvironmentandClimateChange:Co-financingofcrossborderprojectinSAARCMember States related climate change in all SAARCMember Stateswith focusonreductioninairpollutantstherebyfacilitatinginreductionofairpollution.Keyareasthatmaybecoveredinclude:

a. DevelopairqualityprojectstocomplywithWorldHealthOrganizationairqualityguidelines

b. Projectsrelatedtoairqualitymonitoringnetworks,assessmentsystems.

c. Reduceemissionsfrommajorindustrialandmanufacturingsources

d. Adoptandenforceadvancedvehiclesemissionsstandards

e. Developandadoptelectricandhybridvehicles

f. Provideaccesstopublictransportandnonmotorizedtransportinfrastructureincities

g. Increaseinvestmentinrenewableenergyandenergyefficiency

h. Improveaccesstocleancookingfuelsandgreentechnologiesforresidentialheating

i. Protectandrestoreecosystemstoavoiderosion,firesandduststorms

j. Reduceemissionsofammoniumandmethanefromagriculture

k. Designateandexpandgreenspacesinurbanareas

l. Enhanceclimate changeactivitiesofGovernmentsandbusinesses tobettertacklelocalandregionalpollution

II. SAARCMemberStateslikelytoinvolved:

Afghanistan,Bangladesh,Bhutan,India,Maldives,Nepal,PakistanandSriLanka.




IV. Background

Climatechange isoneof themajorchallengesandaddsconsiderablestress tosocieties and to the environment arising from shifting weather patterns thatthreatenfoodproduction,torisingsealevelsthatincreasetheriskofcatastrophic

Environment and Climate Change Economic & Infrastructure Windows, SAARC Development Fund

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flooding,theimpactsofclimatechangeareglobalinscopeandunprecedentedinscale.

Climate change is change in theworld’sweather,asa resultofhumanactivityleadingtoincreasingthelevelofGreenhouseGases(GHG)intheatmosphere.AsperUnitedNationsFrameworkConventiononClimateChange(UNFCCC):

“Climate change” means a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.

Climatechange,largelyduetoindustrialization,includingclear-fellingforestsandcertainfarmingmethods,hasdrivenupquantitiesofgreenhousegases(GHG)intheatmospherethatcontinuestogrowaspopulations,economiesandstandardsoflivinggrow.Aspervariousstudies:

• TheconcentrationofGHGsintheearth’satmosphereisdirectlylinkedtotheaverageglobaltemperatureonEarth;

• The concentration has been rising steadily, and mean global temperaturesalongwithit,sincethetimeoftheIndustrialRevolution;

• ThemostabundantGHG,carbondioxide(CO2),istheproductofburningfossilfuels.

(Source: http://www.un.org/en/sections/issues-depth/climate-change)

Paris Convention/ Agreement: At the 21st Conference of the Parties (COP) inParis, Parties to theUNFCCC , Paris agreementwas formulated that aim is to:strengthentheglobalresponsetothethreatofclimatechangebykeepingtheglobaltemperaturerise thiscenturywellbelow2degreesCelsiusabovepre-industriallevelsandtopursueeffortstolimitthetemperatureincreaseevenfurtherto1.5degreesCelsius.

In line with Paris Convention and United Nations Environment Program (UNEnvironment),thereisrequirementtoprotecttheenvironment,reducepollutantsbeingdischargedintheairandreduceGHGemissions.

Rationale

Air pollution is the world’s single greatest environmental risk to health. Some6.5millionpeopleacrosstheworlddieprematurelyeveryyearfromexposuretooutdoorand indoorairpollutionandnineoutof tenpeoplebreatheoutdoorairpollutedbeyondacceptableWorldHealthOrganizationguidelineslevels.

Themainsourcesofoutdoorairpollutionarefossilfuelemissionsfromcoalburningforpowerandheat,transport,industrialfurnaces,brickkilns,agriculture,domesticsolidfuelheating,andtheunregulatedburningofwastematerialssuchasplasticsandbatteriesinopenpitsandincinerators.


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Someofthekeysourcesofairpollutioninclude:

Power: Combustion of coal, oil, gas, bioenergy and waste; Industry: fuelcombustion,processemissions

Transport:Exhaust,brakeandtyreandroadwear,fuelevaporation.

AsperUNEnvironmentreportonairpollution,IndoorandoutdoorairpollutioncostsUSD5322million (inyear2015).StockholmDeclaration (1972)andRioDeclaration (1992) focuson thehuman right toasafeandcleanenvironment.Implementationof theParisAgreementonclimatechangewillbeamajorstepforwardintacklingairpollution.

Specificairpollution-relatedagreements,suchastheConventiononLong-RangeTransboundaryAirPollution,provideadditionalprotocolstoaddresstransboundaryissues,suchasacidrain.

(Source: Towards a Pollution-Free Planet – United Nations Environment Report on Air Pollution; https://www.unenvironment.org/resources/report/towards-pollution-free-planet-background-report)

V. SAARC Action Plan on Climate Change

The Fourteenth SAARC Summit (New Delhi, 3-4 April 2007) expressed “deepconcern” over the global climate change.As a followup action, theNewDelhiDeclaration called for pursuing a climate resilient development in South Asia(Annexure1).

DuringSixteenthSAARCSummitinThimphuBhutanheldon8-29April2010,SAARCMemberStatesraisedconcernontheunabateddegradationoftheenvironmentandtheadverseimpactsofclimatechangeintheregionandtheirsharedinterestinitsconservationforthewell-beingofpresentandfuturegenerationsandreiteratedtheircommitmenttopromotesustainablemanagementofenvironmentandnaturalresources

VI. Financing Mechanism to address Climate Change

As funds are needed to address climate change and achieve goals in linewith Paris Convention, financing mechanism are (Source: https://unfccc.int/topics#:11565fd6-dd29-4d61-8085-27dba428982f:e8803e9b-4324-4598-84c9-23a5b94d8219):

Standing Committee on Finance: A Standing Committee on Finance has beenestablishedtoassisttheMemberStatesorConferenceofPartiesfor:

• improving coherence and coordination in the delivery of climate changefinancing,

• rationalizationoftheFinancialMechanism,


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• mobilizationoffinancialresources,and

• measurement, reporting and verification of support provided to developingcountryParties

Green Climate Fund (GCF): GCF, established by countries party to the UNFramework Convention on Climate Change (UNFCCC) in 2010, is an operatingentityofUNFCCCfinancialmechanismwithheadquartersintheSouthKorea.GCFaims tosupport low-emissionandclimate-resilientprojectsandprogrammes indevelopingcountriesincludinghighlyvulnerablesocietiestotheeffectsofclimatechange.

WorldBankistheTrusteeofthefundtosupportprojects,programmes,policiesandotheractivitiesindevelopingcountryParties

Global Environment Facility (GEF):GEFestablishedontheeveofthe1992RioEarthSummit,Providesfinancial, technicalandothersupports.Italsosupportsprojects,programmes,policiesandotheractivitiesindevelopingcountryParties.ItalsoadministersLeast Developed Countries Fund and the Special Climate Change Fund,

TheGEFisapartnershipofvariousagencies—includingUnitedNationsagencies,multilateral development banks, national entities and international NGOs toaddress theenvironmental issues.TheGEFhasa largenetworkof civil societyorganizations,workscloselywiththeprivatesectoraroundtheworld.

GEFsupportsmulti-stakeholderalliances topreservethreatenedecosystemsonland,oceans,buildgreenercities,boostfoodsecurityandpromotecleanenergyforamoreprosperous,climate-resilientworld

Adaptation Fund:TheAdaptationFund(AF)wasestablishedin2001tofinanceconcrete adaptation projects and programmes in developing countries that areparticularlyvulnerabletotheadverseeffectsofclimatechange.TheAdaptationFundissupervisedandmanagedbytheAdaptationFundBoardcomposedof16membersand16alternates.

United Nations Environment Fund (UNEF):UNEF,establishedin1973bytheUnitedNationsGeneralAssemblytofundprojectsinMemberStatesthatamongothersincludefinancingforprojectsinGreenEnergy,projectsthatleadtoreductioninGHG,reduceair,waterandothertypesofpollutions.

VII. Themes to be supported by SDF on air pollution, subject to internal approvals

InlinewithUNEnvironmentReport,SDFwillsupportco-financingofaboveprojectssubjecttointernalapprovals.


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VIII.BenefittoSAARCMemberStates• Reductionintoxicparticles,sulphurdioxideandnitrogendioxide

• Promotecleanairandfacilitatereductioninairpollution

IX. SAARC Development Goals in line with Sustainable Development Goals

SAARC Development Goals are in harmony with UN Sustainable DevelopmentGoals. Development of Cross Border Regional Infrastructure in SAARC regionwill ultimately achieve the largermandateof Livelihood,Health, EducationandEnvironmentSustainableDevelopmentGoals

X. Contact

[email protected]



ChiefExecutiveOfficer,SDF,SAARCDevelopmentFund,IIIFloor,BDBLBuilding,NorzinLam,PostBoxNo928,Thimphu,Bhutan,PhNo:+975-2-321152/53.


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Annexure1

SAARCACTIONPLANONCLIMATECHANGE (AdoptedbytheSAARCMinisterialMeetingonClimateChange)

Dhaka,3July2008

A. Introduction

TheFourteenthSAARCSummit (NewDelhi,3-4April2007)expressed “deepconcern”overtheglobalclimatechange.Asafollowupaction,theNewDelhiDeclarationcalledforpursuingaclimateresilientdevelopmentinSouthAsia.Asawayforwardandafirststep,Bangladeshproposedtoorganizeanexpertmeeting.

AttheTwenty-ninthsessionoftheSAARCCouncilofMinisters(NewDelhi,7-8December2007),theissueofclimatechange,particularlytheincreasingvulnerabilityoftheregionduetoenvironmentaldegradationandclimatechangewerediscussed.Theministersfeltthatgivenallvulnerabilities,inadequatemeansandlimitedcapacities,weneedtoensurerapid social and economic development in our region tomake SAARC climate changeresilient.TheywelcomedtheofferofBangladeshtoholdaSAARCMinisterialMeetingonClimateChangetobeprecededbyanExpertGroupMeetingonClimateChange.

Afterdetaileddiscussion,theExpertGroupMeetingrecommendedadraftSAARCActionPlanonClimateChangeasfollows:

B. Objectives of the SAARC Action Plan on Climate Change

Theactionplanwouldseektoachievethefollowingobjectives:

• To identify and create opportunities for activities achievable through regionalcooperation and south-south support in terms of technology and knowledgetransfer.

• To provide impetus for regional level action plan on climate change throughnational level activities.

• TosupporttheglobalnegotiationprocessoftheUNFCCCsuchastheBaliActionPlan,throughacommonunderstandingorelaborationofthevariousnegotiatingissuestoeffectivelyreflecttheconcernsofSAARCMemberStates.

C. Thematic Areas of the Regional Action Plan on Climate Change

SpecificareasofactionintheregionalactionplanforclimatechangeforSAARCregionaretobeidentifiedaccordingtotheprioritiesoutlinedandactionsenvisagedinthenationalactionplanoftheSAARCMemberStates.However,withaviewtofacilitatetheprocess


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of formulatingActionPlan,consistentwiththenationalactionplansofSAARCMemberStates,possiblethematicareasare,below:

Thematic area one:AdaptationtoClimateChange

• Adaptation to climate change impacts and risks in vulnerable communities,locationsandecosystems,

• Adaptationinsectors(e.g.water,agriculture,fisheries,healthandbiodiversity)

• Adaptationtoextremeclimateevents(e.g.flood,cyclone,glaciallakeoutburst,droughtsandheatandcoldwaves)

• Adaptationtoclimatechangeimpact(e.g.sealevelrise,salinityintrusion,glacialmeltandcoastalandsoilerosion,)

• Adaptationsuitedtourbansettlements,coastalstructuresandmountainterrain.

Thematic area two:PoliciesandActionsforClimateChangeMitigation

• Sharingofbestpracticesonnationallyappropriatemitigationactions(e.g.energy,wastemanagementandtransport)

• CapacitybuildingfordevelopingCDMprojectsincludingDNAandstakeholders.

• Sharingofbestpracticesonsustainableforestmanagementbasedonexperiences.

Thematic Area Three:PoliciesandActionsforTechnologyTransfer

• TechnologyneedsassessmentincludingR&Dandcapacitydevelopment

• Assessing barriers to technology development for adaptation and mitigationoptions.

Thematic Area Four:FinanceandInvestment

• Methodsforassessingfinancingneedstodealwithclimatechangeintheshort,

• mediumandlongterm,

• ClimatechangeprojectsshouldbegivenpriorityandbefinancedasperSAARCnorms.

• Determinethequantumofadditionalfundingrequiredtoimplementtheaction

• Plansasidentifiedundervariousthematicareas.

Thematic Area Five:EducationandAwareness–NewDelhiWorkProgram

• Developmentofatoolkitonmassawarenessraisingonclimatechange

• Incorporatingclimatechangeawarenessineducationalcurricula

• Involvementofthemassmediaonclimatechangeissueswithadequateinformation

Thematic area Six:ManagementofimpactsandrisksduetoclimateChange

• Climateriskmodelingandcapacitybuildingintheregiononimpactassessmentofclimatechange.


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• Sharingofinformationandcapacitybuildinginthemanagementofclimatechangeimpacts and risks through cooperation among SAARCmember states in earlyforecasting,warningandadaptationmeasures,

• CooperationamongsttheSAARCmemberstates inexchangeof informationonclimateandclimatechangeimpacts(e.g.sealevelrise,glacialmelts,droughts,floods,etc.).

• Cooperationandsharingofgoodpracticesindisastermanagement.

Thematic area Seven:Capacitybuildingforinternationalnegotiations

• CapacitybuildingofMemberStatesintheinternationalnegotiationprocess.

D. Priority Action Plan• CapacitybuildingforCDMProjects

• Exchangeofinformationondisasterpreparednessandextremeevents

• Exchangeofmeteorologicaldata.

• To consider capacity building and exchange of information on climate changeimpacts(e.g.Sealevelrise,glacialmelting,biodiversityandforestry).

• Mutualconsultationininternationalnegotiationprocess.

Mediabriefingasandwhenrequired.

E.Duration–TimeLine

TheActionPlanisproposedforaninitialperiodofthreeyears(2009-2011).

F. Implementation Responsibility

TheprimaryresponsibilityforimplementingtheActionPlanonClimateChangerestswiththenationalgovernments.Withregardtoregionalcooperation,amechanismshouldbeagreedupontoeffectivelyusetheexistinginstitutionalarrangementsofSAARCbygivingclear directions and guidance. As for national level implementation, each governmenthas to undertake its regulatory measures, technological interventions, stake holder’sparticipationandinstitutionalarrangements.

G. Reporting and Reviewing

The review of the action plan should be periodically undertaken by the appropriateinstitutionalmechanism inSAARCat the technical level. Their national reports on theimplementationwillbesubmittedtotheSAARCSecretariatforsubsequentconsiderationbytheMinisters.


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SAARC



Projects in Micro, Small and Medium Enterprises


ProjectinSouthAsia



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Cross-Border Projects in Shared Infrastructure for Micro, Small and Medium Enterprises


Co-financing of Cross-Border Projects in Micro, Small and Medium Enterprises(MSME).

SDFproposestoco-financeprojectsinSAARCMemberStatesthatfacilitate:

i. SharedInfrastructurecreation

ii. Cross Border Shared industrial cluster development and shared industrialclusterupgradationthatbenefitMSMEandencouragedevelopmentofMSME

iii. DevelopmentofSupplyChaininfocusareaslike

a. ClimateChange

b. IndustrialMachinery

c. ExportPromotion

d. ImportSubstitution

e. Medicalequipment

f. NonConventionalEnergy

i. Solar

ii. WindEnergy

iii. WasteManagement

iv. WastetoEnergy

v. Othersuchareas

g. PowerGeneration

h. PowerTransmission

i. ProjectsentailingdevelopmentofsecondaryandtertiarysectorinfocusareasofeachSAARCMemberState

j. Otheremergingsectors

iv. SDFalsoproposes to cofinanceprojects that facilitate intra-SAARCMemberStateTradeandInvestment


Target industrial cluster inSAARCMemberStates i.e.Afghanistan,Bangladesh,Bhutan,India,Maldives,Nepal,PakistanandSriLanka

Cross-Border Projects in shared infrastructure for Micro, Small and Medium Enterprises Economic & Infrastructure Windows, SAARC Development Fund

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Background



Micro,SmallandMediumEnterprisesareanimportantchannelforprovidingintra-SAARCtrade,inclusiveandsustainableregionaldevelopmentofSouthAsiatherebyfacilitatingregional integration.AsperUnitedNationsDevelopmentProgramme(UNDP)report,2017:“MSMEserveasthebackboneofallsectorsintheeconomyandareanimportantsourceofemploymentandpovertyreduction.Theycanplayanimportantroleinpromotingspatiallybalancedinclusivegrowthandensuringmoreequitabledistributionoutcomes”.

SDF proposes to co-finance projects that facilitate shared industrial clusterdevelopment and shared industrial cluster upgradation, product development,researchanddevelopmentandtechnologyupgradationamongothers inSAARCMemberstates.

VI. Proposed model E-MSMEportalforSouthAsia

o DevelopmentofanintegratedE-MSMEportal.

o In-houseandthe intra-SAARCcapabilities indevelopmentofsuchportalshouldbeencouraged.


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o PortalismanagedbyaSponsor.

o Theportalcouldbesegregatedalongproductandservices.

o TheportallistkeyproductsandservicesofferedbyMSMEofSAARCMemberStates.

Enrollingentitiesprovidingsuchservices

o Itcouldcontainlistofentitiesprovidingsuchproductsandservices.

o AllkeyMSMEofSAARCMemberStatesareencouragedtobecomemembers

SettingofInformationandCommunicationTechnology(ICT)enabledSharedInfrastructure

o MSMEClusterisidentifiedineachSAARCMemberState

o Sponsorisidentified

o SponsorcreatesCommonInfrastructurefacilitiesthatalsoincludes

ITenabledservices

Communicationavailability

AvailabilityofFinancialTechnologyServices

AuditandAccountingServices

Othersharedservices

Sponsoralsobringsindevelopmentpartnersthatinclude

o BanksandFinancialInstitutions

o ICTCompanies

o Leadingcorporatethatencouragedevelopmentofsupplychain

o UtilityCompanies

o LogisticSolutionProvider

o Others

TheseDevelopmentPartnersprovidelowcostservicestotheMSMEswhobecomemembersofthesharedInfrastructure.

MSMEregistersintheindustrialcluster

PartofthesharedspaceisleasedtotheMSME

DevelopmentPartnersfacilitatecustomizedsolutiontotheMSMEfor

o ITservices

o BankingServices

o SpecialisedservicesinforeignExchange

o Accounting,AuditandTaxationServices

o Paymentgateway


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Paymentgatewaycouldbeprovidedbyleadingbanksandfinancialinstitutions

ThegatewayshouldbeencouragedtobedevelopedbyintraSAARCentitiesratherthanrelyingonoutsideregion.

SDF may explore co-financing of such projects provided it meets its internalrequirements.

VII. Key requirements• SharedInfrastructure

• E-Portal

• Sponsor



• Others

VIII.Benefits• CofinancingprojectsinSharedInfrastructureislikelytofacilitatedevelopment

ofMSMEentailingjobcreation,intra-SAARCtradeanddevelopmentofsupplychaininfocusareas.

• ItislikelytofacilitatedevelopmentandintegrationoflocalindustriesaslargecompaniesmayexploresourcingsolutionfromwithSAARCMemberStates enhance intra regional dependence and job creation.

It is like to contribute to Regional Integration and Economic Connectivity.

IX. Conclusion

CofinancingprojectsinsharedinfrastructureislikelytofacilitatedevelopmentofMSMEentailingjobcreation,intra-SAARCtradeanddevelopmentofsupplychaininfocusareastherebyenhanceRegionalIntegrationandeconomicconnectivity.

X. Contact

[email protected]





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SAARC



HydropowerProjectinSouthAsiaUnder

InfrastructureWindowofSAARCDevelopmentFund

AThematicConceptNote

UndertheInfrastructureWindow


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Cross border co-financing of hydroelectric power projects: Co-financing ofhydroelectricpowerprojectsinSAARCMemberStateswithinvolvementofatleasttwoSAARCMemberStates:

• Bhutan

• Nepal

II. Overview of the theme

Thethemepredominantlycapturetheoverviewofthecurrentscenarioofcross-borderarrangementsforelectricitysectorcooperationinSouthAsiaandbringoutpotentialopportunitiesofco-financingcrossborderhydroelectricpowerprojectsintheregion.ThethemeisintendedtohighlighttheenormousopportunitiestoharnesshydropowerpotentialinSouthAsiaespeciallyBhutanandNepal.

III. Rationale of the theme

Accesstoreliable,affordableandqualityenergyistheneedofthehourinSouthAsia.InSAARCregion(theregion)pooraccesstoelectricitycoupledwithfrequentsupplyinterruptions hampers the economic development of the region. Strengtheningcross-borderelectricitycooperationinSouthAsiacanbepartofthesolutionforprovidingadequateand reliableelectricity to thepeople.However cross-borderelectricitycooperationandtradeintheregionneedstoaddressseveralissuessuchasregional-levelpoliticalclimate,technologyupgradationandexistingelectricitypoliciesofSAARCMemberStates.HarnessingHydropowergenerationpotentialinBhutanandNepalcanaddresstheelectricityrequirementinIndiaandBangladeshespecially during the summermonths when the peak load demands are high.Regionalcooperationinelectricityisimportanttopromotetradeandcross-bordermarketintegrationintheregion.

IV. Background Information

SouthAsianAssociationforRegionalCooperation(SAARC)wasformedin1985.TheagreementforaSouthAsianFreeTradeArea(SAFTA)wassignedin2004.TheSouthAsiaRegionalEnergyCoalition(SAREC)wasformedin2006topromoteadvocacyinitiativesbyleadingpolicy-orientedbusinessassociationsinSouthAsia.TheSAARCEnergyCentre (SEC)wasestablished in2006asaSpecialPurposeVehicle (SPV)with its base in Islamabad, Pakistan towork on regional energysector cooperation inSouthAsia.SAARCDevelopmentFundwasestablished in2010asanumbrellafinancialinstitutiontofinanceprojectsandprogramsinSouthAsia.

In2014,aFrameworkAgreementforregionalcooperationinelectricitywasformedamongsttheSAARCMemberStates.Theagreementcontainsbroadprovisionsforthe establishment of a regional electricitymarket, nondiscriminatory access to

Crossborderco-financingofhydroelectricpowerprojects Economic & Infrastructure Windows, SAARC Development Fund

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transmission,marketdrivenpricingofelectricityandestablishmentofabodyforcoordinatingregionalpowerintegrationandtrade.

V. Current Scenario under Energy Cooperation in South Asia

Bilateral arrangements for power transmission and trade currently exist in theregion.BilateralgenerationandtransmissionarrangementsbetweenNepal-India,India-BhutanandrecentlyIndia-BangladeshareexamplesofregionalelectricitycooperationinSouthAsia.

VI. Power Consumption Scenario in South Asia

Power consumption varies significantly across South Asia with the region as awholehavingpercapitapowerconsumptionof707kWhincomparisontotheworldaverageof3125kWh.FurtherSouthAsiahas706millionpeoplewithoutelectricityoutof1.6billionpeopleglobally.

VII. Access to Electricity – Instrumental in Regional Integration and Cooperation

Electricity is critical to the socioeconomic development of any country. Theavailabilityofreliableandqualitypoweratcompetitiverates is imperativeforacompetitiveindustry.Itisalsoacriticalinputtodevelopmentandsustenanceofvariousinfrastructureanditsservices.Regionaltradeinelectricitywillboosttheeconomic connectivity in the region andwould be instrumental inmeeting theobjectivesofregionalintegrationandcooperationintheregion.

VIII.CountryScenario–HydropowerGenerationandPotential

a. Bhutan

PerInternationalHydropowerAssociation,Bhutanpossesaveryhighhydropowerpotentialestimatedataround30,000MWofwhich23,760MWhasbeenidentifiedaseconomicallyfeasible.Atotalof1,615MWofhydropowercapacityhasbeeninstalled in thecountry todate.Bhutan is theonlySouthAsiancountrywithasurplus of power for export. Almost 100% of power generated in the countryishydropower—themostproductivenatural resource inBhutan.The riversandstreams from the Himalayan Mountains provide an abundant source of cleanenergy.ThehydropowerdevelopmentformsthebackboneofBhutan’seconomyand social lives.

b. Nepal

Per International Hydropower Association, Nepal is blessed with significanthydropowerresources.Nepal’stheoreticalhydropowerpotentialhasbeenestimatedtobearound84,000MWofwhich43,000MWhasbeenidentifiedaseconomically


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viable.Currently,Nepal’sinstalledhydropowercapacityis753MWonly.ThereforeenormousopportunitiesexistinthedevelopmentofhydropowercapacityinNepal.

IX. SAARC Development Goals in line with Sustainable Development Goals

SAARC Development Goals are in harmony with UN Sustainable DevelopmentGoals. Development of Cross Border Regional Infrastructure in SAARC regionwill ultimately achieve the largermandateof Livelihood,Health, EducationandEnvironmentSustainableDevelopmentGoals.

X. PotentialOpportunitytoCo-financeCrossBorderHydropowerProjects

Development of Hydropower generation facility in Bhutan and Nepal providespotential opportunities for various Multilateral Development Banks, RegionalFinancialInstitutions,InfrastructureFinancingAgenciesandvariousCommercialBankstoformconsortiumoffundingagenciestoco-financecrossborderHydropowerprojectsinSouthAsia.

XI. Way Forward

SAARCDevelopmentFundproposestoformaProjectDevelopmentandWorkingGroup(PDWG)amongallthepotentialMultilateralDevelopmentBanks,RegionalFinancialInstitutions,InfrastructureFinancingAgenciesandvariousCommercialBankstoworktogetherwithGovernmentsofSAARCMemberStatesandPrivatesectortodevelopHydropowerprojectfacilitiesinSAARCMemberStatesespeciallyin Bhutan and Nepal and facilitate cross border electricity trade in the SAARCregion.

XII. Reference Document

ReportbyInternationalHydropowerAssociation.

EnergyTradeinSouthAsiabyAsianDevelopmentBank.

XIII. Contact

[email protected]



Chief Executive Officer, SAARC Development Fund, III Floor, BDBLBuilding,NorzinLam,PostBoxNo928,Thimphu,Bhutan,PhNo:+975-2-321152/53


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SAARC


Opportunities to Co-financeWind Energy Projects in South Asia




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Co-financingofWindenergygenerationprojectsandassociatedsupplychain:Co-financingofwindenergyprojectsalongwithassociated supply chain inSAARCMemberStates.


ThethemepredominantlycapturesthepotentialopportunitiesingenerationofwindenergyprojectsinSAARCMemberStateswithfocusonAfghanistan,Bangladesh,India,Maldives,PakistanandSriLanka.Developmentof indigenous technologyandcompetenceinenergygenerationprojectswithintheregioncanaddresstheissuesofclimatechangeandpavewaystodevelopmentofrenewableenergyinSAARCMemberStates.


Themainadvantagesofwindenergyareunlimited,free,renewableresourceofgeneration.Windenergyaddressesthechallengesofclimatechangeandenergysecurity.Thesedays it isalsobecoming increasinglycostcompetitive.Evidenceshowsthatthelevelizedcostofwindenergyisapproachingthecostofnewbuildthermalpowerproduction.WindenergyisabundantinmostSouthAsiancountries–inspiteofthisthetotalinstalledwindgenerationcapacityinregionisverylow.ThereisahugepotentialofharnessingwindenergyfacilitiesinSouthAsia.

IV. Power Consumption Scenario in South Asia


V. Access to Electricity – Instrumental in Regional Integration and Cooperation


VI. Supply Chain for Wind Energy Projects

Cooperation and partnership within the SAARC Member States can facilitatedevelopment of indigenous supply chain for wind generation facilities withintheregiontoenabletomeetthecosteffectivedemandofbothtechnologyandequipments.

Co-financingofWindenergygenerationprojectsandassociatedsupplychain Economic & Infrastructure Windows, SAARC Development Fund

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VII. Country Scenario – Wind Power Generation Potential

1 Afghanistanisrichinrenewableenergyresources

2 SmallWindTurbinescanbeusedforruralelectrification

3ThelowlandsinsouthernandwesternAfghanistanhavearound120windydaysinayear.Upto8m/secwindspeedsarereported.

1LargeUtility-Scale Turbinesmay be viable in coastal and higher altitudeareaswherethereisabundantwindflow.

2SmallWindTurbines (SWT) canbe installedwhere there is limitationonavailabilityof land.Theycanbe transportedand installedwithminimumlandandinfrastructurerequirement

1Indiahasmanufacturingcompetence–assuchthereisanelementofcostadvantage.

2 Windturbinemanufacturersprovideturn-keysolutionsforwindprojects.

3IndependentPowerProducersareoptingforwindenergyprojectsbasedoncostadvantagesandcleanmodeofgeneration.

1 Small-scalewindprojectssuitableforMaldives

2TheIslandsinMaldiveshaverelativelylowelectricitydemandduetosmallpopulations.Assuchsmallwindturbinesprojectsarewellsuited.

3Windflowsareconsideredtobepotentiallyadequatetooptforwindenergyprojects.

1Pakistan has good potential of wind energy especially in Southern andwesternpartofPakistan

2RenewableenergyhasbeenincentivizedbytheGovernmentandTariffsareattractiveforproducers.

Afghanistan – Opportunities

Bangladesh – Opportunities

India – Opportunities

Maldives – Opportunities

Pakistan – Opportunities


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1 Governmentoffershighfeed-in-tariff

2 Goodwindpotentialinthecountry

SriLanka–Opportunities

VIII. SAARC Development Goals in line with Sustainable Development Goals


IX. PotentialOpportunitytoCo-financingCrossBorderHydropowerProjects

Development of Wind Generation Facilities in SAARC Member States providespotential opportunities for various Multilateral Development Banks, RegionalFinancialInstitutions,InfrastructureFinancingAgenciesandvariousCommercialBankstoco-financevariousWindenergyprojectsinSouthAsia.

X. Way Forward

SAARCDevelopmentFundproposestoformaProjectDevelopmentandWorkingGroup(PDWG)amongallthepotentialMultilateralDevelopmentBanks,RegionalFinancialInstitutions,InfrastructureFinancingAgenciesandvariousCommercialBankstoworktogetherwithGovernmentsofSAARCMemberStatesandPrivatesectortodevelopWindEnergyfacilitiesinSAARCMemberStates.

XI. Reference Document

WindEnergyFutureinAsiabyAsianDevelopmentBank

XII. Contact

[email protected]



Chief Executive Officer, SAARC Development Fund, III Floor, BDBLBuilding,NorzinLam,PostBoxNo928,Thimphu,Bhutan,PhNo:+975-2-321152/53


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SAARC


Intra SAARC

Energy Grid and Intra SAARC Trading in Energy




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IntraSAARCEnergyGridandIntraSAARCTradinginEnergy:Co-financingofcrossborderenergyprojectsinSAARCMemberstatestherebyfacilitatingdevelopmentofintraSAARCEnergyGridandfacilitatingintraSAARCtradeinenergysector.


ThethemeshallpredominantlycapturetheoverviewoftheenergysectorinSouthAsia and bring out potential opportunities of co-financing cross border energyprojects in the region. The theme is intended to highlight the opportunities tofacilitateintraSAARCtradinginenergysector.


South Asia covering the countries of Afghanistan, Bangladesh, Bhutan, India,Maldives,Nepal,PakistanandSriLanka,comprises3%oftheworld’sarea,about23%oftheworldpopulationandabout3.3%oftheglobaleconomyasof2017.A largeproportionof thepopulation is livingbelowthepoverty line.There isawide variation in the energy resource endowments among the SAARCMemberStates.Theenergydemandintheregionisexpectedtogrowfurtherwithboththe domestic consumers and industry sectors asmain contributors. Significantchallenges facedby the energy sector in theSouthAsia region include energydeficits, large dependence on fossil fuel and inadequate energy infrastructure.Intra-regional energy trade isneeded toenhance theenergy supplywithin theregionandtomeettheenergyneedsofthepeople.

IV. Background Information

SouthAsianAssociationforRegionalCooperation(SAARC)wasformedin1985.TheagreementforaSouthAsianFreeTradeArea(SAFTA)wassignedin2004.TheSouthAsiaRegionalEnergyCoalition(SAREC)wasformedin2006topromoteadvocacyinitiativesbyleadingpolicy-orientedbusinessassociationsinSouthAsia.TheSAARCEnergyCentre (SEC)wasestablished in2006asaSpecialPurposeVehicle (SPV)with its base in Islamabad, Pakistan towork on regional energysector cooperation inSouthAsia.SAARCDevelopmentFundwasestablished in2010asanumbrellafinancialinstitutiontofinanceprojectsandprogramsinSouthAsia.

In2014,aFrameworkAgreementforregionalcooperationinelectricitywasformedamongsttheSAARCMemberStates.Theagreementcontainsbroadprovisionsforthe establishment of a regional electricitymarket, nondiscriminatory access totransmission,marketdrivenpricingofelectricityandestablishmentofabodyforcoordinatingregionalpowerintegrationandtrade.

Intra SAARC Energy Grid and Intra SAARC Trading in Energy Economic & Infrastructure Windows, SAARC Development Fund

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V. Current Intra-Regional Energy Trade

Theexistingintra-regionalenergytradeamongSAARCMemberStatesislimitedtoelectricitytradebetweenIndiaandBhutanandIndiaandNepalonhydropowergeneration.ThepetroleumtradeisbasedonIndiaimportingandrefiningcrudeoilandexportingpetroleumproductstoBhutan,Nepal,andSriLanka.IndiaisalsoexportingdieseltoBangladesh.

VI. Current Scenario under Energy Cooperation in South Asia

Bilateral arrangements for power transmission and trade currently exist in theregion.BilateralgenerationandtransmissionarrangementsbetweenNepal-India,India-BhutanandrecentlyIndia-BangladeshareexamplesofregionalelectricitycooperationinSouthAsia.

VII. Power Consumption Scenario in South Asia


VIII. Access to Electricity – Instrumental in Regional Integration and Cooperation


IX. SAARC Energy Grid and Intra-Regional Energy Trade

The existing intra-regional energy trades among SAARC Member States areprimarilylimitedtoelectricitytradebetweenIndia-BhutanandIndia-Nepalonhydropowergeneration.TheIntra-regionaltradeamongtheSAARCMemberStatesneeds tobeenhancedonadiversemixofenergyportfolio tocater togrowingenergydemandintheregion.TheconceptofSAARCGridismuchenvisagedbypolicyplannersoftheregionfrommanyyears.ItisimperativetomoveforwardinthisdirectiontoestablishSAARCGridbyinterconnectionofregionalpowergrids.


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X. SAARC Development Goals in line with Sustainable Development Goals


XI. Way Forward

SAARCDevelopmentFundproposestoformaProjectDevelopmentandWorkingGroup(PDWG)amongallthepotentialMultilateralDevelopmentBanks,RegionalFinancialInstitutions,InfrastructureFinancingAgenciesandvariousCommercialBankstoworktogetherwithGovernmentsofSAARCMemberStatesandPrivatesector to develop cooperation in intra SAARC energy trade in SAARC MemberStates.

XII. Reference Document

EnergyTradeinSouthAsiabyAsianDevelopmentBank

XIII. Contact

[email protected]



ChiefExecutiveOfficerSAARCDevelopmentFund,IIIFloor,BDBLBuilding,NorzinLam,PostBoxNo928,Thimphu,Bhutan,PhNo:+975-2-321152/53


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SAARC


Contact

[email protected]



SAARC Development Fund ChiefExecutiveOfficer,SDF,SAARCDevelopmentFund,IIIFloor,BDBLBuilding, NorzinLam,PostBoxNo928,Thimphu,Bhutan,PhNo:+975-2-321152/53.

SAARC SAARC DevelopmentFund...SAARC Member States have immense in-house capabilities. Such an initiative could harmonise and synchronise these capabilities. This is likely to lead

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