Tuesday, November 11, 2014

NAMA Update from CCCNI: UNDP releases guidance paper on rural electrification.

The UNDP’s MDG Carbon has just released a Guidance Paper that describes a model approach for financing the development, implementation and operation of a sector-wide programme for renewable energy rural electrification as a nationally appropriate mitigation action (NAMA).  This paper is titled ‘Finance Structure and its Management for a Rural Electrification NAMA,' and can be accessed at the following link:

The paper, which is not official opinion of UNDP, believes that one of the main issues facing developing countries is the lack of electricity access by their population, and it is often the rural population which is most affected by a lack of affordable and reliable electricity supply. Therefore, the main objective of this Guidance Paper is to facilitate greater access to electricity by rural communities through the provision of climate finance under a National Appropriate Mitigation Action (“NAMA”).

An important aspect that this paper says is about the need for subsidizing rural electrification projects.  It recognizes the fact that the rural poor have limited financial resources and hence cannot afford accessibility of electricity.  Thus, subsidy programs are required to ensure establishment and, potentially, long term viability of these projects. Although subsidies for rural electrification from many international development partner- and multi-lateral finance organizations are available, each funder has their own targets, criteria, and processes for the allocation and disbursement of funds to developing countries. Taking this funder diversity into consideration, this Guidance Paper presents a generalized method for the financing structure of a rural electrification NAMA.

The paper brings up a bottom-up approach to using a NAMA to finance renewable energy rural electrification, and prescribes a Concept Model for Finance (CMF) for renewable energy NAMAs in the energy sector. It focuses on a renewable energy mini-grids. 

I hope you will find this post useful.

Thanks and regards,

Ranjan Panda

Convenor, Water Initiatives Odisha
Convenor, Combat Climate Change Network, INDIA*
Mahanadi River Waterkeeper (Member, Global Waterkeeper Alliance)

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