Investment subsidy Curse or blessing Subsidy what the

Investment subsidy Curse or blessing

Subsidy, what the issue (Bryson) Subsidy component raises questions: • Media • Evaluations • Host-governments • Donors • Development practitioners • Internal SNV staff

Why is this an issue Biogas programmes do not always have an explicit justification for subsidy. The justification for subsidy is subject to context, place and phase of the programme.

What will happen if the issue is not addressed Public support for domestic biogas programmes with an investment subsidy component will erode.

The Subsidy Justification Tool: SJT® Justification based on: • Internal strategy – (quality enforcement, pro-poor) • External justification – (EIRR minus FIRR, carbon value) • Situational (country/time/environment) – (promotion, priming the market, energy pricing)

Arguments in favour • Promotional tool • Quality leverage • Priming the market • Pro-poor • Affordability • Public benefit • Govt. commitment • Steers development

Arguments against • Market distortion • Inflexibility • Suppresses innovation • Expensive • Private benefits • Addiction • Unsustainable • Q-ownership

Subsidy justification score Arguments in favour Arguments against

Management reply The Xxxx Domestic Biogas Programme decides (not) to provide (propose) an investment subsidy for domestic biogas plants constructed under their programme because ….

SJT teams • • • Tanzania: Ethiopia 1: Ethiopia 2: Burkina: Nepal: Laos: Pakistan: Rwanda: Uga/Ken: Peter & Sebastian Meselle & Fikru Banjajehu & Melis Fulgence & Eduard Jeremy & Lek Nini & Rajendra Rajesh & Jan Elvine & Anaclet Patience & Mozes • Devil’s advocate: Fred & Felix

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