Download PIF - Sudan - PV pumping - Global Environment Facility

PROJECT IDENTIFICATION FORM (PIF)
PROJECT TYPE: Full-sized Project
TYPE OF TRUST FUND:GEF Trust Fund
For more information about GEF, visit TheGEF.org
PART I: PROJECT INFORMATION
Project Title:
Country(ies):
GEF Agency(ies):
Other Executing Partner(s):
GEF Focal Area (s):
Name of parent program (if
applicable):
 For SFM/REDD+
 For SGP
 For PPP
Promoting the use of electric water pumps for irrigation in Sudan
Sudan
GEF Project ID:1
UNDP
(select) (select)
GEF Agency Project ID:
Ministry of Water Resources and
Submission Date:
Electricity
Resubmission Date:
Climate Change
Project Duration (Months)
n/a
Project Agency Fee ($):
5673
5324
9 January 2014
22 January 2014
48
414,747
A. INDICATIVE FOCAL AREA STRATEGY FRAMEWORK2:
Trust Fund
Focal Area Objectives
CCM-3
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
GEFTF
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
Total Project Cost
B.
Indicative
Grant Amount
($)
4,365,753
Indicative Cofinancing
($)
26,757,484
4,365,753
26,757,484
INDICATIVE PROJECT DESCRIPTION SUMMARY
Project Objective: To replace diesel-based irrigation water pumping through the promotion of photovoltaic pumps.
Trust
Indicative
Indicative
Grant
Expected Outputs
Fund
Grant
Cofinancing
3
Project Component
Type
Expected Outcomes
Amount
($)
($)
1. Financing and
Inv
PV pump installation
1.1 National PV Fund GEFTF
2,695,852
21,078,484
dissemination
programme enabled
and coordinated
mechanism
through targeted
loan facility
established and
subsidies and the
established and
operational to
design and
capitalized to
support a PV
implementation of
promote
pump installation
micro-finance lending
concessional
programme
lending to
farmers for PV
pump equipment
1.2 A minimum of
1,468 off-grid PV
pumps ranging in
size from 3.121
2
Project ID number will be assigned by GEFSEC.
Refer to the reference attached on the Focal Area Results Framework and LDCF/SCCF Framework when completing Table A.
3
TA includes capacity building, and research and development.
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1
2.
Financing and
dissemination
mechanism derisked through
technical
standards and
demand-side
support
TA
PV pump installation
programme put on a
sustainable footing
through risk reduction
measures
29.6 kWp
installed in farms
in the Northern
State of Sudan
2.1 Development and
implementation
of technical
quality standards
for PV pump
components by
the Sudan
Standards &
Metrology
Organisation
(SSMO),
augmented by
enforcement
support for
SSMO, Customs
and relevant
market observers
GEFTF
746,544
2,415,000
2.2 SSMO test and
certification
laboratories
strengthened to
test and label PV
pump
components
2.3 Software tool for
pump sizing
according to farm
and hydrological
conditions
developed and
implemented
2.4 Training and
certification
scheme for PV
pump installers
(including local
retailers,
technicians and
pump rental
companies)
developed and
implemented
2.5 Strengthening (or
creation) of water
user groups as
reliable credit
counterparties,
accompanied by
training for
farmers and water
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3.
Mitigation
instrument design
elaborated and
implemented in
support of the PV
pump installation
programme
TA
PV pump installation
programme
subject to rigorous
monitoring of emission
reductions in a scalable
climate instrument
(NAMA) framework
user groups on
siting,
installation,
operation and
maintenance of
PV pumps
3.1 Development of a
standardised
baseline for pump
fuel-switching,
applicable to
Sudan and the
wider region
GEFTF
456,221
662,000
GEFTF
259,243
1,257,000
3.2 Implementation
of the
standardised
baseline within a
NAMA
4.
Supportive
enabling
environment and
scaled-up
implementation
TA
Northern State pump
replacement model to
be replicated
systematically across
Sudan
4.1 Inclusion of PV
pumps in the
fiscal concessions
lists of the
Investment Law
and the
Agricultural
Implements
Regulation
4.2 Structured
replication
programme for
other states
designed and
implemented,
including
strengthened
integration of PV
pumping in the
Government's
national energy
roadmap and
rural energy
access strategy
4.3 Sustainable
market dynamic
for PV pumps
(and other
mitigation
technologies)
created through
structured
awareness-raising
and capacity
development
activities and
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through synergies
with Government
irrigation
programmes
Subtotal
Project Management Cost (PMC)4
Total Project Cost
C.
GEFTF
4,157,860
207,893
4,365,753
INDICATIVE CO-FINANCING FOR THE PROJECT BY SOURCE AND BY NAME IF AVAILABLE,
($)
Sources of Cofinancing
Name of Cofinancier
National Government
Type of Cofinancing
Ministry of Water Resources &
Electricity
Ministry of Environment, Higher
Council for Environment & Natural
Resources, Ministry of Petroleum,
Ministry of Agriculture, Sudan
Standards & Metrology
Organisation
Ministry of Finance & National
Economy
Government of the Northern State
Sudanese banks
Elrumalya Company
UNDP
Additional in-kind co-financing
from the stakeholders above as well
as from the National Energy
Research Council
National Government
National Government
Local Government
Private Sector
Private Sector
GEF Agency
Others
1,500,000
Cash
500,000
In-kind
50,000
Cash
Soft Loan
In-kind
Cash
In-kind
1,400,000
19,507,484
1,000,000
550,000
2,250,000
26,757,484
INDICATIVE TRUST FUND
GEF
Agency
Type of
Trust Fund
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
Total Grant Resources
1
2
Amount ($)
Cash
Total Cofinancing
D.
25,412,484
1,345,000
26,757,484
RESOURCES ($) REQUESTED BY AGENCY, FOCAL AREA AND COUNTRY1
Focal Area
Country
Name/Global
Grant
Amount
($) (a)
Agency Fee
($) (b)2
Total ($)
c=a+b
0
0
0
0
0
0
0
(select)
(select)
(select)
(select)
(select)
0
In case of a single focal area, single country, single GEF Agency project, and single trust fund project, no need to provide information for
this table. PMC amount from Table B should be included proportionately to the focal area amount in this table.
Indicate fees related to this project.
E.
PROJECT PREPARATION GRANT (PPG)5
Please check on the appropriate box for PPG as needed for the project according to the GEF Project
Grant:
Amount
Agency Fee
Requested ($)
for PPG ($)6
4
To be calculated as percent of subtotal.
5
On an exceptional basis, PPG amount may differ upon detailed discussion and justification with the GEFSEC.
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





No PPG required.
(upto) $50k for projects up to & including $1 million
(upto)$100k for projects up to & including $3 million
(upto)$150k for projects up to & including $6 million
(upto)$200k for projects up to & including $10 million
(upto)$300k for projects above $10 million
___----__________
___
________
___________
___100,000______
___
________
___
________
_ _ ----_______
___
_____
_____________
___9,500_____
___
_____
___
_____
PPG AMOUNT REQUESTED BY AGENCY(IES), FOCAL AREA(S) AND COUNTRY(IES) FOR MFA AND/OR MTF
ROJECT ONLY
Trust Fund
GEF Agency
(in $)
Country Name/
Focal Area
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
(select)
Total PPG Amount
MFA: Multi-focal area projects; MTF: Multi-Trust Fund projects.
Global
PPG (a)
Agency
Fee (b)
0
0
Total
c=a+b
0
0
0
0
PART II: PROJECT JUSTIFICATION7
PROJECT OVERVIEW
A.1. Project Description. Briefly describe the project, including ; 1) the global environmental
problems, root causes and barriers that need to be addressed; 2) the baseline scenario and any
associated baseline projects, 3) the proposed alternative scenario, with a brief description of
expected outcomes and components of the project, 4) incremental/additional cost reasoning and
expected contributions from the baseline , the GEFTF, LDCF/SCCF and co-financing; 5) global
environmental benefits (GEFTF, NPIF) and/or adaptation benefits (LDCF/SCCF); 6)
innovativeness, sustainability and potential for scaling up
Baseline scenario and project
Sudan’s primary energy supply is estimated as 14.8 million tonnes of oil equivalent (toe). The use
of modern energy services is relatively low, with biomass resources accounting for 62% of energy
supply; 87% of the population currently has no access to grid electricity. Following the secession of
South Sudan in July 2011, Sudan has lost 60% of its biomass energy resources, 75% of its oil
reserves and 25% of its hydro-power potential. Fossil fuel prices are rising as a consequence of the
secession and cuts in Government fuel subsidies: in 2011, the price of diesel, for example, increased
by 45% (from 1 to 1.45 Sudanese pounds per litre) and by a further 114% in 2013. As an LDC
(ranked 171 out of 186 countries on the Human Development Index) and with 51% of its population
officially living in poverty (and many more near the poverty line), Sudan is extremely vulnerable to
such energy constraints. This is particularly apparent in the agricultural sector, which accounts for
32% of GDP and 65% of total employment, and which is becoming more energy-intensive as
mechanization increases (the number of tractors in use increased by 22% between 2007 and 2010,
for example) and as farming shifts from traditional rain-fed to diesel pump-irrigated systems. The
area under irrigation has increased from 0.65 million ha to 2 million ha in the past five years, a
trend that the Second National Communication to the UNFCCC (2013) expects to continue as
rainfall continues to decrease and become more erratic due to climate change. Indeed, the
Agricultural Strategic Plan (‘Nahda Ziraia’ or ‘Agricultural Renaissance’) intends to double the
amount of irrigated land by 2015.
6
7
PPG fee percentage follows the percentage of the GEF Project Grant amount requested.
Part II should not be longer than 5 pages.
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However, Sudan does have significant – and, with the exception of hydro-power, largely untapped
– renewable energy resources. Solar energy, averaging 6.1 kWh/m2, is particularly significant, and
is considered one of the best solar resources globally. Moreover, it is well distributed throughout
the country, facilitating the provision of energy services to rural settlements that are unlikely to be
reached by modern energy infrastructure (electric grid and pipelines) in the foreseeable future. This
renewable energy potential is increasingly recognized by the Government: the Comprehensive
Renewable Energy Master Plan (2005) has as its specific objectives an increase in the share of
renewables in Sudan’s energy balance and increased access to renewable electricity services in rural
areas, and the role of solar (PV) technology in achieving this is given great prominence. The
particular role that PV pumps can play in irrigation is also receiving considerable attention: a 2011
assessment of national GHG mitigation options by the Higher Council for Environment and Natural
Resources specifically identifies solar pumping for irrigation as one of six priority PV applications.
The baseline project consists of two initiatives that are supportive of an accelerated transition from
the use of diesel pumps to PV pumps for irrigation purposes:

The Ministry of Water Resources and Electricity (MWRE) and the Government of the
Northern State (one of 18 states in Sudan’s federal structure) have, for the past two years,
been implementing a programme to help large-scale farms (those greater than 100 hectares
in size with pumps greater than 30kW capacity) to switch from diesel-powered pumps to
grid-connected electric pumps. So far, 106 electric pumps have been installed, with a
further 105 planned in 2014. This programme is jointly implemented by the Northern State
Ministry of Agriculture, which carries out the pump site selection and makes the request for
finance to the federal Ministry of Finance and National Economy; and MWRE, which
builds sub-stations, extends electrical lines and determines the electric pump technical
specifications. The principal objective of this programme is economic – to reduce the
increasing fuel cost burden on commercial farmers, which is currently estimated as 50% of
the total cost of production, in the context of rising diesel prices. However, because the grid
emission factor in Sudan is relatively low (0.3 tCO2/MWh) due to the preponderance (80%)
of hydro-power in the electricity generation mix, switching to grid-electric pumping
actually represents an effective climate change mitigation strategy. It is, though, also an
intrinsically limited strategy, for two reasons. First, the price of electricity is currently
highly subsidised by the Government (the current tariff is 4 US cents/kWh), and so
switching from diesel pumps to grid-electric pumps currently makes economic sense for
farmers. When electricity subsidies begin to be reduced – as they are scheduled to do so,
starting this year – the economic rationale will become progressively less clear. Second, the
number of large farms within reach of the grid – and hence capable of switching to gridelectric pumps – is relatively small: MWRE estimates that there are only 105 unconverted
large farms remaining. All of the planned expansion in irrigated land in Northern State over
the coming five years – which is considerable, expected to be an additional 0.25 million
hectares – will take place more than 15 km from the banks of the Nile, in areas that are
remote and not grid-connected. MWRE is aware of the potential of PV to address the
pumping needs of current and planned off-grid irrigated areas, and is offering technical
support to off-grid farmers interested in switching. But the financial benefits of MWRE’s
grid-electric pumps programme, notably the subsidised pump installation charges, are not
available to off-grid farmers.

As part of a general strategy to broaden the population’s access to finance for poverty
reduction purposes, the Central Bank of Sudan issued an instruction in 2011 to all
commercial banks to allocate 12% of their lending to micro- and small-finance for nontraditional credit consumers. This attention to micro-finance reflects recommendations to
this effect made by the Second National Communication, the National Adaptation
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Programme of Action and the National Capacity Self-Assessment (among others).
However, banks have struggled to meet the 12% quota (with preliminary indications
suggesting that just 5% of loans have met the definition), largely because of the lack of
structured, replicable lending opportunities: the transaction costs of screening and
processing individualised, ad hoc micro-finance loan applications covering a diverse range
of clients and sectors have proved prohibitively expensive. An opportunity for offering
large numbers of standardised micro-finance loans has, however, recently arisen with the
Northern State Government’s decision (2012) to refine the Central Bank’s policy. In
Northern State, all bank lending falling under the 12% micro-finance quota must hitherto be
directed at just two specific applications: loans to farmers for grid-electric irrigation pumps
(the opportunities for which are anyway almost exhausted) and for PV pumps. A number of
barriers will hinder operationalisation of this policy (see below), but it nonetheless
represents a significant and unprecedented opportunity to leverage private sector finance to
facilitate the transition to solar pumping.
Despite this supportive baseline, there are a number of deficiencies and barriers in the baseline that
will serve to impede farmers’ take-up of PV pumps. First, although banks have long track-records
of lending to farmers (indeed, the Agricultural Bank of Sudan was established as a quasicommercial entity by the Government in 1957 for precisely this purpose), they have little
experience lending to the small-scale (i.e. low-income) farmers that are the focus of the
Government’s micro-finance strategy. Second, the banks have limited experience with issuing loans
for PV pump units, which have little market penetration to date and what penetration they do have
is largely attributable to cheap, unreliable models that have acquired a poor reputation among
farmers. Third, long experience with diesel pumps has demonstrated that farmers lack the technical
skills to select appropriately-sized and configured pump units; it is very common for over-sized
diesel pumps that are pumping relatively small volumes of water to perform inefficiently, overheat
and break down (pump efficiencies of just 5-10% are normal). The National Energy Research
Council (NERC, 2013) specifically identifies this pump sizing problem as one of the key challenges
confronting the irrigated sector. Fourth, there are no provisions for assessment of the climate
change mitigation benefits of the baseline initiatives (e.g. in terms of carbon dioxide avoided) and
nor is the potential role of climate finance (e.g. in the form of a NAMA) considered.
Although the project was focused on a different set of (urban) stakeholders, the observations in the
terminal evaluation of an earlier GEF project in Sudan, ‘Barrier Removal to Secure PV Market
Penetration in Semi-Urban Sudan’ (2000-2005)8 are instructive. The terminal evaluation notes the
potential for PV systems to transform rural livelihoods: the Government should (p.14) “establish
linkages between existing (e.g. Farmers’ Unions and other community organizations) and rural
enterprises with sources of credit, technology and business development support, and provide
information and guidance on increasing productive uses of PV systems (e.g. PV pumps for
irrigation and drinking water). Through arrangements with NGOs, micro-finance institutions and
other entities, information on technology options and costs could be provided.” However, the
terminal evaluation notes (p. 15) the need for PV quality assurance measures, including basic
system specification standards and a code of practice for installation. It also observes that (p. 19)
“introducing micro-finance mechanisms in the formal banking system is a great challenge” and that
extension of loan tenors to up to five years is necessary to make micro-finance lending affordable to
the poor.
The GEF project builds on the baseline project and the recommendations of the earlier GEF project
to address the barriers confronting low-emission pumping technology take-up in the irrigation
sector. A model for PV pump financing, quality assurance, technical support, capacity development
and climate finance will be developed and implemented for Northern State, accompanied by a
8
PMIS 660.
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replication programme for Sudan’s other states.
GEF project scenario
The GEF project consists of 4 components:
Component 1: Financing and dissemination mechanism established and operational to support a
PV pump installation programme.
GEF funding: $2,695,852
Co-financing: $21,078,4849 (MWRE: 1,580,000; MoA: $95,000; MoP: $80,000; MoF: $20,000;
UNDP: $48,000; commercial banks: $19,087,484; Northern State Government: $168,000).
The GEF project will work with the Northern State Government and the commercial banks
operating in Northern State – notably the Agricultural Bank of Sudan, the Farmers Bank, the
Savings Bank and the Islamic Bank – to systematize their micro-finance lending for PV irrigation
pumps, to develop the internal capacities of the banks to structure micro-finance loan packages
(noting that the primary user-base will be small-scale farmers) and assess loan risks, and to market
innovative financial products to drive farmer take-up of PV pump technology. Micro-finance
lending decisions will rest with the banks and, for the purposes of fostering a competitive lending
market, the banks will be encouraged to design and market their own (differentiated) micro-finance
products. Nonetheless, the GEF project, in conjunction with the Northern State Government, will
help to impose coherence across these market offerings by:



Establishing a set of criteria that micro-finance products must meet (including a cap on
bank charges10 and a minimum loan tenor) in order to qualify as micro-loans under the 12%
quota mandated by the Central Bank of Sudan.
Developing and maintaining a monitoring system: establishment of a central register of
qualifying loans, regular surveys of consumer awareness, customer satisfaction (among
farmers who have acquired PV pumps), PV pump equipment market prices, PV pump
equipment quality and retailer sentiment. Such robust, comprehensive and regular
monitoring is intended to facilitate early detection of market developments and to enable
programme design adjustments as and where necessary.
Imposing a set of minimum PV pump unit hardware standards (see Component 2 below)
and ensuring that banks lend only on the basis that certified hardware is used.
In order to kick-start the micro-finance lending programme, the GEF project will devote $2.6
million to: (a) acquiring 28 demonstration PV pumps (20 x 3.12 kWp models, 5 x 5.12 kWp models
and 3 x 29.6 kWp models) for assessment, sizing, monitoring and training purposes; and (b)
providing a subsidy on the first tranche of PV pump units acquired through micro-finance.
The subsidy scheme will incorporate a degression scheme: subsidies will commence at 13% in Year
1 of the project and will decline by 2% increments annually, such that by the end of the GEF project
subsidies are at 7%. The impact of this degression scheme is likely to be a ‘fast start’ to PV pump
take-up (as farmers hurry to benefit from the higher initial subsidies) and freed-up financial
resources for subsidizing more pump units. The subsidy degression scheme will allow subsidies to
be applied to 1,468 units (1,276 x 3.12 kW units, 128 x 5.12 kW units and 64 x 29.6 kW units). The
loan co-finance associated with these 1,468 units is $19.5 million. The market monitoring scheme
to be established by the project will be used to monitor the impact of falling subsidies on adoption
and loan default rates, and to re-calibrate the subsidies if required.
9
The co-financing breakdowns are indicative and will be confirmed during the PPG stage.
Sudanese banks apply the Sharia form of Islamic banking, under which bank charges are levied but interest
rates are not applied.
10
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The GEF-financed subsidies are calibrated to act as sufficient incentive to promote rapid take-up by
farmers of what is an unfamiliar technology (which has a somewhat mixed reputation given wordof-mouth reports on the few and generally poor-quality PV pump models that are currently
available on the market) while also conserving limited GEF resources. GEF subsidies will apply
only to the first 1,468 pump units; thereafter, the cost of pump units will be unsubsidized. This
initial wave of GEF-subsidized units is considered sufficient to kick-start sustained market take-up
in Northern State through demonstration, awareness and assurance-building effects.
The subsidies will be channeled through a new national fund – provisionally titled the ‘National PV
Fund’ – that will be established, with project support, by the Ministry of Finance & National
Economy and the Ministry of Agriculture. Both ministries have experience establishing specialised
funds, notably in the context of the Wheat Fund (Mahfazat El Gamh) for irrigated agriculture. The
purpose of the fund will be to provide a ready-made vehicle for subsidy replenishments in support
of national scale-up of PV pump dissemination. It is likely that, as the PV pump dissemination
model developed in Northern State is replicated in the other states of Sudan, subsidies similar to
those on offer in Northern State will be required, at least initially. Given the fact that Sudan is an
LDC and Government resources are limited, the likelihood is that the national fund will rely on
donor funding for replenishment. If climate finance materialises through the NAMA (see
Component 3 below), climate income will also be channelled into the national fund. The
institutional architecture, governance and funding modalities of the national fund will be explored
in greater detail during the project preparation phase.
The technical capacities developed by the banks to package micro-finance credit products for lowincome consumers are likely to be transferrable to other technologies, such as improved cook stoves
and biogas digesters (which typically cost approximately $2,500 for a family-sized unit).
Consequently, an activity will be incorporated into Output 4.3 (see below) to help banks to connect
to stakeholders involved in these other technologies for the purpose of catalyzing the development
of additional micro-finance credit products.
Component 2: Financing and dissemination de-risked through technical standards and demandside support
GEF funding: $746,544
Co-financing: $2,415,000 (MWRE: $378,500; MEFPD/HCENR: $80,000; MoA: $240,500; MoP:
$100,000; MoF: $10,000; NERC: $412,000; SSMO: $134,000; UNDP: $110,000; Elrumalya:
$780,000; Northern State Government: $170,000).
The baseline project places considerable responsibility on small-scale farmers to select PV pumping
systems, to operate them and to maintain them. The ability of such farmers to do so is questionable,
placing the sustainability of the baseline project in doubt – both because bad experiences of early
adopters (e.g. system breakdowns, poorly-sized pumps) will act to deter later waves of farmers
from taking up PV systems, and partly because banks will be reluctant to lend to farmers in the
knowledge that there are significant hardware-related risks of loan default.
Component 2 is intended to de-risk banks’ micro-finance lending activities by supporting the
development and implementation of technical quality standards for PV pump components, and by
providing technical assistance to farmers, farmer cooperatives/water user groups, local retailers,
technicians and pump rental companies on how to install and maintain PV pumps. The GEF project
will support the Sudan Standards and Metrology Organisation (SSMO) to develop certification
criteria for the full range of hardware components of PV pumping systems: the four standard
elements of a PV irrigation pumping system – the PV panels, the pump, the controller and the
electric motor – as well as optional components such as solar concentrators, adjustable mounts,
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9
solar tracking systems, cooling systems, batteries and ablation protection. SSMO’s existing
certification laboratory will be strengthened to allow it to test and certify such components. Where
feasible, certification criteria will be set such that local manufacturers and fabricators are capable of
producing at least some of the system components. One of the key criteria that will be used to
define the equipment standards will be the expected failure rate of the equipment (others will
include ease of use and inter-operability). The certification scheme will ensure a failure rate of the
PV pump irrigation systems that is considerably lower than that currently found among diesel pump
units in the Sudanese context, the engines for which typically have to be repaired or overhauled
every 2-3 years.
SSMO and the Customs Administration are responsible for the clearance of any imported goods
into Sudan. For all imported goods, SSMO must issue a letter of Investigation Clearance (IC)
confirming compliance with the set standards and specifications. The IC is then presented to the
Customs Administration to release the imported goods. The project will provide training for SSMO
personnel responsible for issuing the Investigation Clearances. The technical standards developed
will also apply to locally-produced components such as solar modules. The project will work with
the Consumer Protection Organization, a national and much-respected NGO, to build its capacity to
observe the specifications of locally-produced hardware and to work with SSMO and lawenforcement agencies where local firms are found to be producing non-compliant products. This
monitoring activity will be embedded in the market monitoring scheme to be established by the
project under Component 1. The technical standards established for PV pump components will
apply nationally, not just to project participants. As an additional safeguard in the specific context
of the project, the banks that issue micro-finance loans to farmers will be required to verify that the
farmers are using certified equipment.
Component 3: Mitigation instrument design elaborated and implemented in support of the PV pump
installation programme
GEF funding: $456,221
Co-financing: $662,000 (MWRE: $100,000; MEFPD/HCENR: $257,000; MoP: $5,000; NERC:
$115,000; UNDP: $125,000; Northern State Government: $60,000).
The PV pump dissemination programme will be designed using a standardized baseline modality as
a simplified and scalable means of demonstrating additionality and calculating emission reductions
associated with switching from diesel pumping. The standardized baseline will have national – and
potentially regional (supra-national) – application so as to provide financial (potential climate
revenue) and methodological structure/rigour to the replication plan developed under Component 4.
The standardized baseline will form the basis of a supported NAMA11.
Component 4: Supportive enabling environment and scaled-up implementation
GEF funding: $259,243
Co-financing: $1,257,000 (MWRE: $600,000; MEFPD/HCENR: $13,000; MoA: $98,000; MoP:
$32,000; MoF: $20,000; NERC: $110,000; UNDP: $152,000; Elrumalya: $200,000; Northern
State Government: $32,000).
Component 4 will develop a structured replication programme, built around the institutional
architecture provided by the National PV Fund established under Component 1, the NAMA
developed under Component 3 and the GEF-supported hardware certification standards developed
under Component 2 (which will have national force), to transfer the pump dissemination model
See, for example, UNFCCC (2013), Standardised Baselines – Potential Use in the NAMA Context
(http://unfccc.int/files/cooperation_support/nama/application/pdf/unfccc_cdm-standardized_baselines.pdf).
11
GEF-5 PIF Template-February 2013
10
developed for Northern State to the other 17 states in Sudan. A degree of localized tailoring of the
model will be required on a state-by-state basis in recognition of differing circumstances,
particularly relating to the structure and regulation of micro-finance lending. The GEF project will
also work with the Ministry of Water Resources and Electricity, the Ministry of Petroleum
(Renewable Energy Directorate) and the Ministry of Agriculture to embed PV irrigation pumping in
the Government’s national energy roadmap, rural energy access strategy and national irrigated
agriculture strategy so as to – among other benefits – open up a channel for standard, ongoing
Government financial support and a window for potential donor funding.
The project will build on baseline initiatives, such as agricultural extension services, to deliver its
training and awareness-raising activities. In doing so, the baseline initiatives will themselves have
their capacities strengthened and will be enabled to continue offering capacity development
support. The Northern State Government, the federal Ministry of Agriculture and the Higher
Council for Environment and Natural Resources (which has a network of offices in every state) are
all committed to sustaining training and technical support beyond project completion. All banks
involved in the project have branches located nationwide, in all states. The business processes,
learning and capacities developed by the banks in Northern State can, therefore, be readily
transferred to the other states.
Although the project will remain focused on PV pumping, it is recognized that there is significant
potential for the banks involved in supplying micro-finance credit products to extend their lending
to other technology categories, such as improved cook stoves and biogas digesters. Communication
between the banks and relevant stakeholders will therefore be facilitated by the project.
The project will also work with the Ministry of Finance and the Ministry of Agriculture to include
PV pumps in the fiscal concessions list of the Investment Law and the Agricultural Implements
Regulation. The fiscal concessions granted by the Investment Law and the exemption from taxes
and duties once PV pumps are classified as ‘agricultural equipment’ will serve to lower hardware
prices and will benefit consumers (i.e. farmers), equipment suppliers/retailers seeking to grow the
market, and banks providing finance to farmers (shortening loan repayment times and reducing risk
exposure). Inclusion in the concessions list will reduce the import duty on small pumps (less than
10 kW in size) from 25% to 10%. For a typical 2kW pump, that will represent a cost saving of
approximately $1,700. How much of that saving is passed onto farmers (as opposed to being held as
profit by wholesalers/retailers) will depend on the elasticity of demand. This issue will be explored
during the PPG. For conservativeness, the impact of the reduction in import duty has not been
incorporated into the pump dissemination/subsidy calculations. But, qualitatively, it is clear that the
fiscal benefit will allow more (cheaper) pumps to be subsidized and hence increase the emissions
reduction impact of the project. The concessions will have national force and will, therefore, also
promote nationwide take-up of PV pumps.
Environmental and social benefits
The GEF project will directly benefit poor rural communities by reducing their dependence on
fossil fuel-powered pumps (the fuel cost of which will rise significantly in the coming years). In
doing so, the project will help to support the economic model underlying irrigated agriculture at a
time when irrigation is growing in importance due to agricultural modernization and anticipated
climate change (lower and more erratic rainfall). Women account for 51% of the rural population,
and agriculture accounts for 78% of the jobs held by rural working women. In generating positive
socio-economic impacts for the smallholder agriculture sector, the project will serve to create jobs
and raise incomes for women. Women will also benefit, alongside other stakeholder groups, from
capacity development activities supported by the project.
With regard to the mitigation benefits of the project, a conservative estimate is presented here
GEF-5 PIF Template-February 2013
11
(which will be firmed up during project preparation). Conservativeness is ensured through: (a)
considering only the direct emission reductions associated with the 1,468 PV pump units financed
using GEF resources – other pump installations enabled by the project and indirect emission
reductions (e.g. associated with the project’s support to national hardware standards and capacity
development) are disregarded; and (b) applying a causality factor of 60% to these direct emission
reductions, in recognition of the fact that the baseline – though characterized by weaknesses and
gaps – would have witnessed limited PV pump installations. Assuming (empirically reasonable)
fuel consumption of 18 litres of diesel per day for pumps replaced by 3.12 kWp PV models, 40
litres/day for 5.12 kWp models and 200 litres/day for 29.6 kWp models, lifetime (20-year) emission
reductions from the 1,468 PV pump units are estimated at approximately 599,660 tCO2. Applying
the 60% causality factor discounts the emission reductions to 359,796 tCO2, resulting in mitigation
cost of GEF$12.1/tCO2. Again, this is an extremely conservative estimate of the project’s GHG
mitigation benefits.
Innovativeness, sustainability and potential for scaling-up
The project is innovative in addressing a technology – PV water pumping – that has considerable
potential in the irrigated agriculture sector but which has hitherto not achieved significant market
penetration due to market barriers. The deployment of micro-finance and climate finance is
similarly novel. The micro-finance loan products developed will undoubtedly be innovative:
traditional bank loans are too expensive (high bank charges) and are not targeted at small-scale
counterparties such as farmers, and micro-finance is a novel financial modality in Sudan (having
been introduced only in 2008 and hitherto having largely been a donor-funded – as opposed to
commercially oriented – activity). If developed as a NAMA, the pump dissemination programme is
likely to be one of – if not the – first NAMAs implemented. The issue of sustainability is addressed
through a systematic barrier removal strategy (such as hardware quality assurance measures on the
supply-side and technical support on the demand-side) and through the harnessing of commercial
(micro) lending that is intrinsically more sustainable than grants. The prospects for nationwide
scaling-up of the model developed by the project for Northern State are considerable, and a
replication programme will be developed for this specific purpose. The irrigated sector is expected
to grow rapidly in the coming years – the Government is planning a doubling in spatial extent by
2015 – and so the scale of potential emission reductions is itself growing.
A.2. Stakeholders. Identify key stakeholders (including civil society organizations, indigenous people,
gender groups, and others as relevant) and describe how they will be engaged in project preparation:
Project
Stakeholder
Ministry of Water
Resources &
Electricity
(MWRE)
Ministry of
Environment,
Forestry & Physical
Development
(MEFPD)
Higher Council for
Environment and
Natural Resources
(HCENR)
GEF-5 PIF Template-February 2013
Relationship With The Project
The principal role of MWRE is to formulate policies, strategies and action plans for the
supply of electricity in Sudan, with a key focus on diversifying Sudan’s electricity mix
to include renewables. MWRE has been undertaking a pump switching programme in
Northern State, assisting farmers to switch from diesel-powered irrigation pumps to
grid-connected electric pumps. With the opportunities for further on-grid switching
almost exhausted, MWRE is promoting the use of off-grid PV pumps instead. MWRE
will be responsible for implementing the GEF project.
MEFPD is the national focal point for the GEF and, under its subsidiary HCENR, the
UNFCCC. MEFPD will be involved in technical assistance on the National PV Fund,
the coordinated loan mechanism and on the climate finance elements of the project.
As the national focal point for climate change under the UNFCCC, HCENR is
responsible for coordinating National Communications, the development of Climate
Change Action Plans, NAPAs, Technology Needs Assessments and NAMAs. The GEF
project will build on a number of HCENR initiatives, including the development of
12
Ministry of
Petroleum,
Renewable Energy
Directorate (MoP)
Ministry of
Agriculture (MoA)
standardized baselines, the elaboration of a national Low Emission Development
Strategy, and the analysis of sectoral NAMA opportunities.
The Renewable Energy Directorate of MoP has a national mandate for renewable
energy resource mapping and off-grid renewables applications. MoP has developed an
expertise in rooftop PV systems and has begun to experiment with a limited number (7
to date) of PV irrigation pump units. MoP will assist the GEF project with advisory
support, local capacity development and national policy formulation.
MoA is the implementing body for the Agricultural Strategic Plan (2007-2015), which
has the central objective of increasing the amount of farming land in Sudan by 70%
and – within that overall target – doubling the amount of irrigated land. MoA operates
a number of support programmes for farmers on agricultural practices, including
irrigation and water pumping. The GEF project will coordinate its PV pump
installations, capacity development and replication programme with MoA’s support
activities. MoA is also expected to play a key role in the context of liaising with water
user groups and coordinating the NAMA, in ensuring inclusion of PV pumps in the
Agricultural Implements Regulation, and in establishing – in conjunction with the
Ministry of Finance & National Economy – the National PV Fund.
Ministry of Finance
& National
Economy (MoF)
MoF will assist with finance-related aspects of the project, notably the establishment of
the National PV Fund, oversight of banks’ micro-finance lending and inclusion of PV
pumps in the fiscal concessions list of the Investment Law and the Agricultural
Implements Regulation. The Ministry also works closely with the Customs
Administration, which will enforce the technical standards for PV hardware that will
be developed by the Sudan Standards & Metrology Organisation.
National Energy
Research Council
(NERC)
NERC (formerly the Energy Research Institute, ERI), under the Ministry of Science
and Communication, is the primary institute at the national level for conducting
research on renewables in Sudan, as well as pilot project implementation. The Solar
PV Encapsulation & Manufacturing Unit is the implementation arm of NERC: it has
undertaken a number of PV pump installations in Nile State and Darfur, accompanied
by system monitoring and technical performance assessments. NERC will support the
GEF project in understanding farmers’ technical and operational pumping needs, in
designing a pump sizing software tool, in installing and monitoring demonstration PV
pump units, and in capacity development.
Sudan Standards &
Metrology
Organisation
(SSMO)
Northern State
Government
Sudanese banks
GEF-5 PIF Template-February 2013
SSMO is a Government body established to coordinate Sudan’s engagement with the
International Standards Organisation (ISO), the African Regional Organisation for
Standardisation (ARSO) and the Arab Standards and Metrology Organisation (ASMO).
SSMO operates 15 testing and certification laboratories across Sudan. The GEF project
will build upon SSMO’s mandate and expertise to support SSMO in developing
technical standards for the PV pump hardware that will be deployed in Northern State
(and subsequently nationally).
Sudan has a federal governance structure, made up of 18 states with delegated
functions and powers. The Northern State Government has been actively promoting
grid-connected irrigation pumps as a means of improving farmers’ livelihoods and
reducing their (and the State’s) reliance on diesel fuel, and is now extending this
support to off-grid PV pumps in areas where grid extension is infeasible. The GEF
project will build on the State Government’s established support programme for
electric pumps, and will harness the State Government’s institutions (e.g. the State
Ministry of Agriculture) and agricultural stakeholder networks.
The Agricultural Bank of Sudan, the Farmers Bank, the Savings Bank and the Islamic
Bank have together financed – through ad hoc (uncoordinated) loans to farmers – the
installation of approximately 2,000 grid-connected electric pumps in Northern and Nile
States since 2011. Now, acting on an instruction from the Northern State Government
that 12% of all commercial lending must be in the form of micro-finance to support
electric and PV pumps, the banks are under pressure to systematise and scale-up their
lending, with a particular emphasis on PV pumps. The GEF project will work with the
State Government and the banks to coordinate their micro-finance lending for this
purpose, to develop the internal capacities of the banks to structure micro-finance loan
packages and assess loan risks, and to market innovative financial products to drive
13
farmer take-up of PV pump technology.
Elrumalya Company is Sudan’s leading private-sector designer and installer of off-grid
renewable energy systems. The company has acquired considerable experience, by
Sudanese standards, in solar pumping, having installed approximately 20 systems
across Sudan. The company has undertaken many Government contracts, most recently
an ongoing $900,000 solar street lighting installation project in Darfur. The company
will assist the GEF project with the provision of technical training for farmers and the
design/installation of demonstration PV pump units. Working with NERC, Elrumalya
will also assist with the development of leaflets and easy-to-use technical guides on
solar pumping for farmers and other stakeholders in the field.
Elrumalya
Company
A.3 Risk. Indicate risks, including climate change, potential social and environmental risks that might
prevent the project objectives from being achieved, and, if possible, propose measures that address these
risks to be further developed during the project design (table format acceptable):
Risk
Risk
Category
Mitigation Approach
Sudan’s Second National Communication (2013) identifies two climate change
hazards related to the supply of water demands in Sudan. First, the rise in
temperatures and the adverse impacts on evapo-transpiration rates at water
storage locations as well as on crop water requirements. Second, changes in
rainfall patterns may adversely affect surface water quantities in the flow of the
Nile and its tributaries. The SNC suggests that, by 2090, Nile water flow will
decrease by 30% below its historical volume. Thus, there is a high likelihood of
water demand increasing and water supply decreasing simultaneously in coming
decades.
Climate
change risks
M
At the project sites (farms) in Northern State, the combination of more irrigated
land, more evapo-transpiration and the retreat of water away from river banks
(due to the diminished flow of the Nile) will mean larger volumes of water being
pumped over greater hydraulic gradients. The GEF project addresses the greater
energy requirements associated with this increased pumping. In the baseline,
pumping is diesel-based, leading to greater CO2 emissions. The GEF project will
promote the switch to PV pumping, thereby pre-empting the rise in baseline
emissions. Design and sizing of the pumps will be important to ensure that (a)
pumps run at future (reduced) water levels without requiring changes in major
components, and (b) pumps are not over-sized, leading to excessive energy and
water consumption (and overheating/burn-outs, which are common today in the
context of diesel pumps). In conjunction with NERC, the GEF project will
develop a software pump sizing tool to calculate the optimum size of pump
required in the context of farm size, crop-type, irrigation system, etc., and will
train farmers and water user groups in correct installation and usage practices.
Irrigation represents an effective adaptation strategy to the increasing risks facing
rain-fed agriculture, and is being heavily promoted by the Government for this
reason. The water scarcity risk that in turn faces irrigated agriculture is low for
the project, for the following reasons:
-
-
-
GEF-5 PIF Template-February 2013
The project will switch existing or planned pumping systems from diesel
to solar power. The project will not itself expand the area under irrigation
beyond what would happen in the baseline.
For newly-established farms along the Nile, Sudan has still not completely
exhausted the country’s legal share of Nile waters. According to the Nile
Basin Initiative, about 25% of Sudan’s share (18 billion cubic meters) of
Nile water is not currently exploited.
Nile water flow is regulated through storage dams, of which Sudan has
14
-
Political
stability risk
Lack of
Government
commitment
to scaling-up
the use of
renewable
energy
technologies
Lack of
farmer
interest in
introducing
solar pumps
for irrigation
L/M
L
L
GEF-5 PIF Template-February 2013
built 5 for power generation and irrigation purposes.
Moreover, the probability of water scarcity is also low due to fact that
farms pump water from shallow wells that are annually replenished from
the Nile.
The project will have little impact on the overuse of water in Northern State due
to the excess capacity from the Nile and the annually replenished shallow wells.
However, in the long-run, with expansion of irrigated agriculture in the other
states, seasonal draw-down of water levels might be possible. It is, however,
important to emphasise that the project itself will have no impact on water levels.
The project will support sustainable, low-emission pumping in irrigated (or
planned-to-be-irrigated) areas; it will not itself expand the area under irrigation
beyond what would happen in the baseline.
Stability risks facing the project activities in Northern State are low. North Sudan
is politically stable and has not experienced a war or tribal conflict since 1895.
Land pressures are growing, driven by the practice of dividing farms into eversmaller plots through inheritance, but the promotion of PV pumps will serve to
reduce these pressures by enabling irrigated farming to take place in off-grid
areas located away from the banks of the Nile. The majority of the rest of the
country is stable, though certain regions, notably Darfur and the border area with
South Sudan, have experienced instability in recent years. The impacts of these
localized sources of instability on national replication of the PV dissemination
model developed in Northern State are considered low-to-medium, and
addressable through tailoring of the replication plan (to be developed under
Component 4) to local circumstances.
Despite the fact that solar energy is abundant, with an annual average GHI of
2,300 kWh/m2, the solar resource is not sufficiently exploited and tapped in
Sudan relative to its potential to increase access to energy services and increase
the country’s energy security. The existing policy framework and national energy
strategy include objectives relating to increasing the share of renewable energy
sources in the energy balance, but these objectives have not to date been
operationalized in clear action plans. However, the risk of limited Government
commitment to the GEF project and to solar pumping generally is considered
(very) low, for a number of reasons. First, the need to diversify Sudan’s energy
mix away from fossil fuels has taken on added impetus since the secession of
South Sudan in July 2011; Sudan’s oil reserves were reduced by two-thirds
following the secession. Second, in part due to the work of the Second National
Communication (2013), the Technology Needs Assessment (2013) and other
studies, there is growing Government awareness and acknowledgement of the
potential role for renewables (in addition to hydro-power, which has traditionally
played a significant role in Sudan’s electricity generation): the Energy Master
Plan, currently under development, includes a specific chapter on off-grid
renewable energy. Third, the Northern State, where the GEF project will focus its
pump installation efforts, is extremely progressive in its support for electric
pumping. The Northern State Government’s support for grid-connected electric
pumps over the past 2 years is now evolving into support for off-grid PV pumps.
The GEF project will support the operationalization of this support through onthe-ground technical assistance, mitigation of implementation risks (e.g. through
the development of hardware standards), coordination of financing, capacity
development of stakeholders, and support to national policy formulation.
Almost all Sudanese farmers are unfamiliar with the use of solar pumps. The
technology has not been widely demonstrated, and those small numbers of solar
water pumps that have been installed by NGOs have not been accurately sized
and properly maintained, resulting in poor results and limited replication.
Farmers are generally skeptical that solar pumps will deliver sufficient water for
irrigation. Agricultural extension services personnel also lack the knowledge and
15
capacity to promote solar pumps. The GEF project includes a component to
demonstrate solar pump technology that is accurately sized to meet the irrigation
water requirements of different farm sizes, accompanied by an extensive
awareness-raising, mobilisation and capacity development programme. The
targets of this programme are primarily farmers, extension service workers and
banks’ lending staff. The primary aim of these activities is to familiarize
stakeholders with solar pump technology and provide assurance of its technical
and financial benefits. With diesel prices high and rising (Government diesel
subsidies have fallen from 79% in 2010 to 34% in 2013, and further reductions
are planned in 2014), the financial incentive for farmers to switch away from
diesel pumping is increasing. Economic evaluation of using solar pumps instead
of diesel pumps shows the following financial benefits:
- The net present value (NPV) is positive and amounts to a substantial
$40,439. (To put this in context, the average annual income of a small-scale
farmer in Northern State is approximately $2,650).
- The payback period is calculated as approximately 4.5 years. This is a
relatively short period compared with an expected PV pump life of 25+
years. For the vast majority of the pump’s operational lifetime, its use will
essentially be free for the farmer.
To be economically feasible to small-scale farmers, such farmers must have
access to low-cost loans with extended tenors (the purpose of the micro-finance
elements of the project) and must have confidence in the quality and reliability of
the pump hardware (the purpose of the certification elements of the project).
Lack of
technical
specifications
and standards
Financial and
credit
constraints
prevent
banks from
financing the
adoption of
solar energy
pumps for
irrigation
M
M
GEF-5 PIF Template-February 2013
The quality assurance of all goods and services in Sudan is the responsibility of
the Sudanese Standards and Metrology Organization (SSMO). However, SSMO
lacks the necessary lab facilities, knowledge and experience to test, inspect and
approve the quality of solar pump components. Hence, the current baseline
market situation includes many inefficient and poor-quality solar modules and
solar components. Poor-quality components have adverse impacts on promoting
solar energy technologies. The proposed GEF project directly addresses the
absence of standards and specifications relating to quality assurance of solar
pump components. The project will work with SSMO to develop standards and
technical specifications for solar pump components, and will upgrade the skills
of testing professionals to enable them to provide reliable certified inspection and
clearance documents.
The upfront cost of PV pumps is five times higher than that of diesel pumps.
Life-cycle costs favour the use of solar pumps (particularly as the cost of diesel
increases), but their high initial cost deters farmers from buying them and
necessitates the use of credit. Traditional bank loans are too expensive (high
bank charges) and are not targeted at small-scale counterparties such as farmers.
The GEF project will address these financial barriers in a comprehensive
manner: (a) by building on Sudan Central Bank and Northern State Government
instructions to commercial banks to package a proportion (12%) of their lending
in the form of micro-finance for non-traditional / low-income borrowers, so as to
direct and coordinate this micro-finance lending towards PV pumps; (b) to derisk this lending activity through the design and implementation of technical
standards and training; (c) through the provision of targeted subsidies and
demonstration models so as to kick-start farmer take-up; (d) through the
inclusion of PV pumps in the fiscal concessions lists of the Investment Law and
the Agricultural Implements Regulation, so as to reduce the burden of tax and
customs duties on solar pump components; (e) through opening up additional
climate finance income streams – in the form of a NAMA – to support ongoing
solar pump dissemination; and (f) through the explicit and detailed inclusion of
support to PV pumps in national Government energy policies.
16
A.4. Coordination. Outline the coordination with other relevant GEF financed and other initiatives:
The proposed project will avoid duplication and find synergy with other ongoing projects and
programmes. In particular, the proposed project will ensure close coordination with:

National Energy Master Plan (2012-2031): A cross-ministerial programme led by the
Ministry of Water Resources & Electricity (2013) has prepared a long-term power system
planning study to cover the period 2012-2031 and a medium-term plan for the period 20122016. A subsidiary Renewable Energy Master Plan is under development, which is targeting
the generation of 1,600 MW of electricity from a range of renewable energy sources,
including solar PV. The GEF project will work closely with the RE Master Plan Working
Group to ensure that the issues surrounding PV irrigation pumping are fully incorporated
into the RE Master Plan.

Promoting Low-Carbon Development (design-oriented Phase 1: 2013-14; to be followed by
a second, implementation-oriented, phase: 2015-2017): A HCENR-implemented, UNDPfunded project to support the development of a Low-Carbon Development Strategy and a
national NAMA framework for Sudan, and to create the enabling conditions for investments
in GHG mitigation technologies, notably through the design of standardized baselines in
priority areas. The GEF project will directly leverage this work by working with HCENR to
develop one of the designated standardized baselines for PV/electric irrigation pumping; by
building on the NAMA institutional systems being put in place; and by establishing strong
linkages between the Low-Carbon Development Strategy and the National Energy Roadmap
and Rural Energy Access Strategy that will be supported with the assistance of the GEF
project.

UNDP Micro-Finance Support Programme (2013-2016): A UNDP-implemented and funded
programme to support enhanced micro-finance policies and capacity development of microfinance institutions in Sudan. The Programme builds on the UNDP-supported First National
Consultative Forum on Micro-Finance (2007) and on UNDP’s 2008 ‘Preparatory Support to
Micro-Finance and Micro-Business Development Programming in Sudan’ project. UNDP
currently provides capacity development to the Ministry of Finance and National Economy
and, in parallel, works with the Central Bank of Sudan and the Sudanese Micro-Finance
Development Facility to strengthen national micro-finance coordination and expand microfinance services across the country. The GEF project will leverage the Programme’s
ongoing micro-finance capacity development support to the Northern State Government, and
will extend this support to banks, farmers and other micro-finance stakeholders in the
context of PV pump micro-finance loan products. The GEF project will also work with the
Programme to ensure that these products incorporate best-practice in terms of product
design, governance and marketing.

Promoting Utility-Scale Power Generation from Wind Energy (2013-2018): A UNDPimplemented, GEF-funded project – currently in project preparation phase – to overcome
barriers to the market development of utility-scale wind farms in Sudan. While the project
targets a different technology and a different scale of application than the PV/electric pumps
project (and hence focuses considerable attention on issues such as Independent Power
Producers, development of a grid code, and design of a feed-in tariff for grid-connected
renewables), supportive overlaps between the projects are anticipated in a number of areas.
The wind project will, for example, help to establish and operationalize an Inter-Ministerial
Committee for Renewable Energy to provide cross-sectoral perspectives and high-level
GEF-5 PIF Template-February 2013
17
political support for renewables. The pumps project will benefit from the work of this
Committee, particularly in drawing together the disparate work and strategies being
undertaken in the agricultural and energy sectors. The two projects will also collaborate in
providing climate finance support to HCENR.

Climate Risk Finance for Sustainable and Climate Resilient Rain-Fed Farming and Pastoral
Systems (2014-18): A HCENR-implemented, LDCF-funded project to strengthen the
weather, climate and hydrological monitoring capabilities, early warning systems and
available information for responding to extreme weather and planning adaptation to climate
change in Sudan. Implementing Priority Adaptation Measures to Build Resilience of RainFed Farmer and Pastoral Communities of Sudan, Especially Women-Headed Households, to
the Adverse Impacts of Climate Change (2013-2016): A UNDP-implemented, LDCFfunded project to support populations vulnerable to environmental risks and climate change
to become more resilient. The principal focus of both projects is to increase the climate
resilience of rain-fed farmers and pastoral communities in regions of high rainfall
variability. Agricultural systems using irrigation are not a principal focus of either project.
However, as irrigation is a potential adaptation response to changing climate and is being
actively promoted by the Government as a means of improving rural livelihoods and
diversifying agricultural products, links between the GEF project and the LDCF projects are
envisaged. The GEF project will leverage relevant LDCF project activities and stakeholder
networks at national and Northern State levels, while the LDCF projects will coordinate
with the GEF project to ensure that any LDCF-supported irrigation activities use PV pump
systems.
B.1 National strategies and plans or reports and assessments under relevant conventions, if
applicable, i.e. NAPAs, NAPs, NBSAPs, national communications, TNAs, NCSAs, NIPs, PRSPs,
NPFE, Biennial Update Reports, etc.:
The Second National Communication to the UNFCCC (2013) notes that Sudan’s greenhouse gas
emissions increased by 8% between 1995 and 2000, driven in part by a 10% increase in energyrelated fossil fuel emissions. The agricultural sector’s importance is highlighted, both in terms of its
economic prominence (accounting for more than one-third of GDP and providing 80% of
employment and household income in rural areas) and as the second-largest source (after transport)
of petroleum product - gasoline, diesel, residual fuel oil, kerosene – CO2 emissions. The SNC
identifies the vulnerability of non-irrigated farming to future climate change, due to expected
reductions in rainfall and higher rates of evapo-transpiration. The SNC also identifies Sudan’s
“immense” solar resource, which it estimates as averaging 6 kWh/m2, as having a key mitigation
role. The National Adaptation Programme of Action (2007) notes that average annual rainfall
declined from 425 mm/year to 360 mm/year between 1940 and 2000, a decrease of annual rainfall of
about 0.5% per year, and that the coefficient of variability of rainfall shows an overall increasing
trend, suggesting greater rainfall unreliability: both trends point to a greater role for irrigation in the
future. Among many relevant observations and conclusions regarding climate change, irrigation and
the energy sector, the National Capacity Self-Assessment (2008) observes that (p. 17) “the
promotion of alternative energy sources such as solar energy can contribute to reducing…carbon
emissions. Capacity building for key stakeholders should focus on increasing the knowledge and
skills they need to employ appropriate technologies.” The Technology Needs Assessment (2013)
notes the importance of the irrigated agricultural sub-sector, which covers more than 2 million
hectares, and identifies improved water management technologies as a priority climate change
intervention.
The Assessment of the Northern States (World Food Programme, 2011) notes that, in 2009,
agriculture accounted for 93% of Sudan’s non-oil export revenues. The Assessment distinguishes
GEF-5 PIF Template-February 2013
18
between the rain-fed sub-sector, characterized by much opportunistic planting in marginal semi-arid
zones for subsistence consumption, and the irrigated sub-sector, which is more commerciallyoriented and entrepreneurial. However, the Assessment notes that loan uptake by farmers is generally
by entrepreneurs with strong business connections with the banks; small-scale and more marginal
farmers, even in the irrigated sub-sector, are rarely able to raise the necessary collateral or find
appropriately-tailored credit products. The Assessment of GHG Mitigation Options for NAMAs
(HCENR, 2011) notes that (p.6) “PV is the best way of electrification of rural areas where connection
to the grid is not possible, and it can be used all over the country”, and specifically identifies solar
pumping for irrigation as one of six priority PV applications. The Sudan Transition to a Green
Economy report (Ministry of Environment, Forests & Physical Development, 2013) notes (p.18) that
solar PV can “contribute to achieving social justice with regard to electricity and accessibility…fuel
savings, decentralisation and GHG minimisation benefits.” The National Human Development
Report (UNDP and the Ministry of Welfare & Social Security, 2012) focuses on the potentially
significant role that micro-finance can play in Sudan, highlighting in particular the need to ensure
proper targeting of clients and to expand micro-finance to more states (away from Khartoum) so as to
enlarge its poverty reduction potential.
The Central Bank of Sudan (2011) has issued instructions to all commercial banks to allocate 12%
of their lending to micro- and small-finance so as to “alleviate poverty and reduce economic
inequality through increased economic growth and lowered liquidity” among non-traditional credit
consumers. The Government has demonstrated increased interest in utilizing micro-finance as a
vehicle for reducing poverty, including prioritization of the role of micro-finance in the Second FiveYear Plan 2012-2016 and the Three-Year Medium-Term Salvation Programme 2012-2014. The
Agricultural Strategic Plan 2007-2015 (‘Nahda Ziraia’ or ‘Agricultural Renaissance’) has the
central objective of increasing the amount of farming land in Sudan by 70% and – within that overall
target – doubling the amount of irrigated land. The Renewable Energy Master Plan (REMP, 2005)
recognises that Sudan is endowed with diverse energy resources, and calls for the use of these
renewable energy sources to ensure the energy security of Sudan and to enhance access to electric
services such as pumping. The National Strategic Vision 2001-2025 sets overall goals for economic
development. The Vision is operationalised through rolling 5-year strategic plans, the latest of which
is the National Strategic Plan (NSP) 2012-2016. The Vision and NSP recognize the supportive role of
the renewable energy sector in achieving the goals for economic development, both in terms of
increasing the capacity of existing technologies (hydroelectricity and thermal) and through the
addition of new renewables. Emphasis is placed on diversification of the electricity mix to ensure
energy security and to enhance electricity access.
B.2. GEF focal area and/or fund(s) strategies, eligibility criteria and priorities:
Sudan is a Non-Annex 1 Party to the UNFCCC. The project addresses the objectives of the GEF-5
Climate Change Mitigation Focal Area Strategy:

Strategic Objective 3: Promote investment in renewable energy technologies.
Investment in renewable energy technologies increased.
B.3 The GEF Agency’s comparative advantage for implementing this project:
For more than 45 years, UNDP has worked in close partnership with the Sudanese Government.
UNDP Sudan currently manages a programme portfolio of US$304 million. The credibility of
UNDP to implement the proposed project is backed up by its mandate, as given by the United
Nations Development Assistance Framework (UNDAF, 2013-16) and the Country Programme
Action Plan (CPAP, 2013-16).
GEF-5 PIF Template-February 2013
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The UNDAF (2013-16) notes that “access to electricity remains low, and it is expected that the vast
majority of rural dwellers will not be connected to the grid in the foreseeable future. A 2012 study by
the Ministry of Electricity and Dams [now the Ministry of Water Resources & Electricity]
recommends the use of photovoltaic (PV) solar to be the best option for electrifying rural
communities.” Under the UNDAF, UNDP is allocated responsibilities for climate change, energy
and environment. These are further articulated in the CPAP (2013-16) under the ‘Energy,
Environment and Climate Change’ Pillar (one of four pillars) as including: (a) the promotion of
investment in green energy and enhanced access by needy off-grid communities to solar energy; (b)
better utilization of solar technologies in collaboration with the National Energy Research Council
and the Ministry of Water Resources & Electricity; (c) support to capacity building efforts that aim
at developing the capability of local people to solve technical problems encountered in renewable
energy-related technologies; and (d) support to create an enabled private sector and Government to
access international low-carbon financing, through assisting the country to develop the necessary
institutional frameworks for NAMAs and carbon finance. Further, under the ‘Poverty Reduction,
Inclusive Growth and Sustainable Livelihoods’ Pillar, UNDP is supporting “the development of
capacities of micro-finance institutions to improve credit services to climate risk-exposed farmers.”
In terms of relevant UNDP projects and programmes, key examples are presented briefly below:

First and Second National Communications under the UNFCCC: UNDP supported the
preparation of the First and Second National Communications to the UNFCCC, as well as
the National Capacity Self-Assessment (NCSA) for implementation of environmental
projects and the National Adaptation Programme of Action (NAPA).

Starting in 1998, the Government of Sudan, with UNDP technical assistance, implemented a
3-year project on Sustainable Rural Energy Development (SRED). The project was funded
from UNDP core resources, and was carried out with the collaboration of the Energy
Research Institute (now the National Energy Research Council) to enhance the dissemination
of solar PV in North Kordofan state. This project provided the evidence for the reliability
and cost-effectiveness of PV water pumps under Sudanese conditions compared to diesel
pumps.

Based on the successes of the SRED, UNDP implemented the GEF-funded project ‘Barrier
Removal to Secure PV Market Penetration in Semi-Urban Sudan’ (2000-2005). The main
accomplishments of this successful project included:
o PV systems installed in 400 schools, 800 health services, 250 social centres, 100
women’s development centers, 54,000 households and other social services;
o Improvements in the area of policy – e.g. formulation of the Renewable Energy Master
Plan 2005;
o Led to the setting up of a PV module assembly plant of 1 MW capacity annually (which
has subsequently expanded to 8 MW capacity by 2013);

Carbon Finance Capacity Building Programme: In 2010, UNDP dedicated $150,000 of
TRAC (core) resources to promote low-carbon technologies through carbon finance.
Achievements included the formulation of a National Carbon Finance Strategy, the
calculation of the grid emission factor, and institutional capacity development.

Promoting Low-Carbon Development: In 2013, UNDP contributed $200,000 of TRAC
resources to support the development – by HCENR – of a Low-Carbon Development
Strategy and a national NAMA framework for Sudan, and to create the enabling conditions
for investments in GHG mitigation technologies, notably through the design of standardized
baselines in priority areas.
GEF-5 PIF Template-February 2013
20

UNDP Micro-Finance Support Programme: A UNDP-implemented and funded programme
to support enhanced micro-finance policies and capacity development of micro-finance
institutions in Sudan. UNDP currently provides capacity development to the Ministry of
Finance and National Economy (MOFNE) and, in parallel, works with the Central Bank of
Sudan and the Sudanese Micro-Finance Development Facility to strengthen national microfinance coordination and expand micro-finance services across the country.
PART III: APPROVAL/ENDORSEMENT BY GEF OPERATIONAL FOCAL POINT(S) AND
GEF AGENCY(IES)
A. RECORD OF ENDORSEMENT OF GEF OPERATIONAL FOCAL POINT (S) ON BEHALF OF THE
GOVERNMENT(S): (Please attach the Operational Focal Point endorsement letter(s) with this
template. For SGP, use this OFP endorsement letter).
NAME
Dr Babiker Abdalla
Ibrahim
POSITION
Under-Secretary,
Ministry of
Environment, Forestry
& Physical
Development; GEF
OFP
DATE (MM/dd/yyyy)
MINISTRY
MINISTRY
OF 01/20/2014
ENVIRONMENT,
FORESTRY
&
PHYSICAL
DEVELOPMENT
B. GEF AGENCY(IES) CERTIFICATION
This request has been prepared in accordance with GEF/LDCF/SCCF/NPIF policies and
procedures and meets the GEF/LDCF/SCCF/NPIF criteria for project identification and
preparation.
Agency
Coordinator,
Agency name
Adriana Dinu,
UNDP-GEF
Executive
Coordinator
and Director
a.i.
GEF-5 PIF Template-February 2013
Signature
DATE
(MM/dd/yyyy)
January 22,
2014
Project
Contact
Person
Robert
Kelly,
UNDP
Regional
Technical
Advisor,
EITT
Email Address
Telephone
+421 915
725 069
[email protected]
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