Development challenge and key achievements:
The Prosol Tunisia financing facility is an example of how international and local public support addressed critical demand-side barriers that were preventing the widespread deployment of commercially viable renewable energy technology in a developing country.
By focusing on public resources to directly support renewable energy investments, we can effectively shift demand away from fossil fuels, even if the latter are subsidised. The programme promoted the installation of more than 119,000 solar water heaters (SWH), totalling around 355,350 m2 of collector area over the timeframe analysed (2005 - 2010). With a fivefold increase in annual deployment, the combination of measures introduced with the Programme has been demonstrated to be effective in addressing the critical demand-side barriers that were preventing the deployment of a commercially viable renewable energy technology. The added SWH installations translate into 251 ktoe (kilotonne of Oil Equivalent) of energy saved and 715 ktCO2 (kilotonne of Carbon dioxide) avoided, as a result LPG subsidy savings of up to USD 101 million over the systems` lifetime. Public spurred USD 110.2 million in private investments, allowing households to save between USD 605 and 1,325 per SWH in energy bills. The domestic solar thermal industrial cluster grew significantly; and it is also estimated that about 3,000 jobs were created.
The programme helped make solar water heaters more affordable by reducing up-front investment requirements and prompting banks to offer concessional financing.
Solution Details: The comparative advantage of the solution:
- Innovative mix of capital cost and soft loans financial mechanism to overcome costs barriers, direct involvement of private financial sector, simplified procedures for final users, standardized procedures for eligibility of providers, installers and equipment as a quality guarantee and intense capacity building at all levels.
- TUNISIAN GOVERNMENT: Ministry for Industry and Energy and Small and Medium- Sized Enterprises, National Agency for Energy Conservation (ANME), United Nations Environment Programme Division of Technology, Industry and Economics (UNEP-DTIE), Italian- led Mediterranean Renewable Energy Programme (MEDREP), Mediterranean Renewable Energy Centre (MEDREC), STEG: State-owned utility with a monopolistic position in the local power market
- Prosol Residential has stimulated the development of the domestic solar thermal industrial cluster, with local actors playing a primary role. Leading with local manufacturing capacities are being developed and expanded, building potential export opportunities as well as market competition and diversification.
Issues of awareness, technology, and credit risk mitigation, as well as competitiveness in the face of fossil-fuel subsidization.
Recent Annual Budget (USD): 3,000,000
Total Budget (USD): 3,000,000
Focal Point and Contact:
Infrastructure Unit, UNDP/PAPP
Jerusalem- OPT, 4A Yakubi St., Jerusalem, 91191, P.O. Box: 51359