Brick Kilns Project Concept 12 June 03.Doc

7/22/2019 Brick Kilns Project Concept 12 June 03.Doc

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Project Concept

1. Project Name:

Improving Kiln Efficiency in the BrickMaking Indutry in Bangladeh

!. Propoed "E# Implementing $gency:

%nited Nation &evelopment Program'%N&P(

). *ountry or countrie in +hich the project i ,eing implemented:

Bangladeh

-. *ountry eligi,ility:

atified %N#*** on $pril 1/0 1-

/. "E# focal area'(:

*limate *hange

2. 3perational program45hort6term

meaure:

3P/: emoval of Barrier to Energy*onervation and Energy Efficiency

7. Project linkage to national prioritie0 action plan0 and program:

8he National Environment Management $ction Plan 'NEM$P( identified the iue of ,rick kiln a a priority environmental concern for Bangladeh. 9ence0 theEnvironmental *onervation $ct 1/ and ule 17 +ere legilated to control ,rickkiln emiion. In addition0 the "oB ha adopted a Brick Burning '*ontrol( $ct0 1;0'$ct <; of 1;( and provided further clarification through the Brick Burning'*ontrol( $mendment $ct0 1! +hich control ,rick ,urning0 re=uire licene fromthe appropriate authoritie and retrict ,rick ,urning uing +ood fuel. It hould ,eemphai>ed that the propoed project i country6driven and take the "overnment ofBangladeh? Environmental *onervation $ct 1/ and Brick Burning '*ontrol( $ct01;0 '$ct <; of 1;( a it ,ai.

;. 5tatu of national operational focal point revie+ 'date(:

5u,mitted: March !@@! $ckno+ledged: Endored: $pril !@@!

.Project rationale and o,jective:

Brick manufacturing i a ignificant contri,utor to "9" on the Indian u,6continent.$t preent0 "9" emiion from ,rick manufacturing in Bangladeh are etimated to ,eover /.@ million ton annually. 8he purpoe of thi propoed project i to remove ,arrier to the adoption of an energy efficient technology to reduce "9" emiion inBangladeh. 8he ucceful application of the technology i eApected to reduce "9" ,y a,out !./ mill ion ton and i conidered to ,e a leat6cot initiative. ith teadilyriing demand for ,rick0 "9" emiion from ,rick manufacturing are eApected togro+ and hence the project +ill enure a reduction in the gro+th of future "9"emiion a +ell.

In 1;0 the "oB prohi,ited the ue of fire+ood in ,rick kiln ,ecaue of +idepreaddeforetation in Bangladeh. 9o+ever0 ince the Bangladeh Brick Manufacturer and

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3+ner $ociation 'BBM3$( etimate that a much a !/C of the fuel upplie to ,rick kiln are till from fire+ood0 it i unclear +hat effect thi regulation ha had. 8heue of tree for fuel ha ,een cited a an indirect caue of local deforetation.8herefore0 to the eAtent that fuel u,titution can ,e fotered0 the project +ould aloremove preure on Bangladeh? carce car,on ink. 8hi project +ould alo ,eamongt the firt climate change mitigation project in Bangladeh that i ,aed on

innovative market6,aed mechanim.

8he Bangladeh %niverity of Engineering and 8echnology 'B%E8(4 Pem,ina eportand the BBM3$ eApect the num,er of ,rick kiln to gro+ ,y more than /@C in theneAt decade ,ecaue of demand increae. In Bangladeh0 ur,an population and ur,anincome are eApected to gro+ over the neAt decade and a thee occur demand forhouing +ill eApand leading to gro+th in demand for ,rick. In an aggregate tarvednation0 ,rick are the major ,uilding6,lockD for all type of infratructure project.%nle market tranformation meaure are affected0 mot of thi capacity eApanion+ill occur along the ame line a the eAiting indutryD. It i in thi conteAt that the propoal ha ,een developed to mitigate eAiting "9" emiion and reduce the futurerate of gro+th.

Brick Making Indutry in Bangladeh

8he Bangladeh ,rick making market i non6formal and can ,et ,e decri,ed a afootlooeD indutry +ith typical characteritic. 8he entitie etimated to ,e a,out;@@@ in num,er are typically 5mall to Medium Enterprie '5ME( mot of +hich areone peron or one family enterprie. Production i eaonal confined to the five drymonth of the year technology i outdated0 a,out 1/@ year old la,or productivity ilo+ capitali>ation non6eAitent0 operating motly on e=uity capital and management iinformal. Mot ,rick maker are located in peri6ur,an and rural communitie. 8houghmore invetigation are re=uired to ,etter undertand the profile of ,rick indutryo+nerhip0 it i likely that cooperative ,rick kiln operation do not eAit in Bangladeh.

$lmot /C of the Bangladeh ,rick indutryD utili>e the old Bull 8rench Kiln'B8K( technology. 8ypically0 a lo+6grade coal from India along +ith fire+ood andrice huk0 are ued to fire the kiln. B%E8 and the 8ata Energy eearch Intitute'8EI( in their reearch on B8K found that the kiln tend to ,e poorly contructed andare highly inefficient in term of fuel conumption. 8hey alo found eAceive airleakage and heat lo from the ytem cauing high level of emiion. 8he follo+ingalient feature of B8K operation in Bangladeh provide one +ay to etimate thelevel of emiion and to compare the technological option:

• 3ne B8K conume 2@@ tonne of lo+ grade coal from India to produce over !

million ,rick during the /6month Bangladeh dry eaon

• 8hi lo+ grade coal ha a heating value of 1-.2 million joule 'MF( per kilogram of

coal 'ource: *oal India Gtd.0 "oB? Minitry of Energy and Mineral eource andBBM3$( +hich +hen ued for producing ! million ,rick in one B8K0 provide 2;.;8F4kiln per year

• If the average emiion factor for coal i -.2 tonne of *3! per 8F0 each kiln

produce an etimated ;)@ tonne of *3! per year

• 8he ;@@@ B8K in Bangladeh emit a,out 2.2 million tonne of *3 ! each year.

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"enerally0 o+ner of ,rick manufacturing facilitie have limited acce to loan0 andthe ,rick they produce are entirely for the local market0 mainly for reidential unit.EAcept for check on phyical =uality uch a chipping or ,reakage0 there i preentlyno =uality control of ,rick produced and old in the country. 8he B8K technology

,eing ued in Bangladeh re=uire replacement on an annual ,ai +hich i during the /dry month of the year. B8K operation are ,aed on informal management uing age6old technology that ha ,een paed from generation to generation. 8hey are aloundercapitali>ed operating motly on e=uity capital0 taffed ,y a poor untrainedeaonal +orkforce0 poorly regulated0 u,ject to ome degree of price competition0 andlo+ profit margin that do not encourage freh invetment to improve efficiency andreduce environmental impact.

Improvement in Brick Manufacturing 8echnology

8here are improved ,rick making technologie0 +hich have yet to penetrate theBangladeh market. 8he Hertical 5haft Brick Kiln 'H5BK( +a firt introduced in

*hina a,out )/ year ago0 ,ut in the late 1;@ it ue eApanded +idely a the economy+a li,erali>ed and a ,oom in contruction took place.

8he H5BK i like the B8K kiln +ith the eAception that the com,ution proce ha ,een placed vertically0 taking advantage of the natural direction of the flue ga. 8hekiln i a tall haft that +ork like a chimney. 8he inner kiln lining i uually made fromfire,rick0 +hile the pace ,et+een the inner haft and the outer +all upporting thekiln tructure i filled +ith inulating material uch a coal lag or a miA of a+dut andclay. #ire,oAe are ,uilt into the kiln o that they can ,e ued a o,ervation hole tomonitor the different firing >one. 8he ,rick are tacked in the haft0 +hich meaurea,out 1m A 1m =uare and 2m in height. "reen ,rick are loaded from the top in ,atche of a,out !@@0 +ith four ,atche ,eing fired at one time. 8he firing time iuually a,out 1./ hour. *om,ution take place in the middle of the vertical haft +iththe air entering from the ,ottom and moving up the already fired ,rick o that +henthe air reache the com,ution >one it i preheated to a,out 7/@ @*. $ com,utionoccur0 the hot flue gae move up over the unfired ,rick efficiently. 8hi allo+ theheat tored in the already fired ,rick to ,e ued to fire the neAt ,atch of green ,rickcreating ignificant aving in energy uage. 8he draught can ,e regulated0 if re=uired0 ,y changing the ett ing denity of the green ,rick and altering their pattern. 8himake it imple and uncomplicated0 and hence le ucepti,le to error.

8he fired ,rick are unloaded at the ,ottom of the haft at a,out the ame rate that theyare put in at the top. 8he unloading device i a chain pulley that i attached to a ingleiron ,eam et in the +all of the kiln. 8he chain pulley0 in turn0 are attached to outidegallo+ made from heavy iron ,eam.

8he H5BK i an appropriate ytem for replication in Bangladeh given the i>e andtype of eAiting entitie. H5BK? are particularly popular among mall and mediumcale ,rick maker in India and *hina0 the t+o larget ,rick producer in the +orld. 8heytem i more efficient and le polluting than B8K?. *3 ! emiion rate are of theorder of a,out @.1) 6 @.!@ kg *3 !4kg ,rick. $lthough the actual economic of a H5BK6operated facility vi66vi one uing B8K +ill ,e eta,lihed during the project deign0 preliminary tudie done ,y B%E8 and the $ian Intitute of 8echnology '$I8( ho+that H5BK are cot effective replacement for B8K unit. 3n an e=ual production

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volume ,ai0 H5BK +ill conume le fuel than a B8K0 and are economically morevia,le. #or eAample0 on the ,ai of ! million ,rick4year production and / yearoperation0 the NPH 'J 1@C dicount rate( of B8K operation i more than t+ice that ofH5BK operation. $lthough the initial capital invetment are higher0 thee are morethan offet ,y the lo+er operating cot of the H5BK. In fact0 the I on theincremental invetment cot i a,out 1)@C0 and the pay,ack period on the incremental

invetment i le than a year. 8he advantage of the H5BK are ummari>ed ,elo+:

• Highly energy efficient: H5BK technology reult in energy aving of a,out /@C

compared to clamp and !@6)@C compared to B8K

• Compact Kiln: H5BK? need a,out !/ to )@C of the land re=uired for B8K

• Operation: Eay to operate and do not re=uire electricity for functioning.

• Construction cost: 8hough lightly higher than B8K0 i till reaona,ly lo+

• Weather Proof : H5BK i not affected ,y variation in +eather. It can ,e operated

during the monoon ,ecaue0 unlike other traditional kiln0 H5BK ha a roof0+hich afford protection from rain and allo+ year round operation. 8he B8K can ,e operated for only / to 2 month a year.

•Suitable for internal fuel bricks: 8he kiln i highly uita,le for ue +here fuel iadded internally into the ,rick. In everal part of the country0 agriculture reiduelike rice huk or fuel like coal dut are miAed +ith clay ,efore molding. 8hiallo+ the ue of lo+er6grade fuel and0 in general0 reduce production cot. H5BK0 ,ecaue of it fat firing characteritic0 i particularly uited for firing ,rick uinginferior fuel.

• Modularity in construction and fleAi,ility in production are important attri,ute of

the technology. $dditional haft 'production capacity of !@@@ to /@@@ ,rick perday( can ,e eaily added4operated.

• Economic iability: $lthough the initial capital cot re=uired to contruct H5BK?

are a,out t+o and a half time that of the B8K0 the profita,ility of H5BK areignificantly greater due to increaed production rate and lo+er energy uage. $

12 tudy ,y the 5+i &evelopment *orporation '5&*( indicated that the totalcot recovery period i le than 2 month.

Propoed 8echnology &iffuion and Market 8ranformation

8hi project enviion a market tranformation focued on ,rick kiln in general0 and inthe upply and +idepread application of an energy efficient ,rick kiln technology0 in particular0 the H5BK. 8hi +ill involve the implementation of pecific activitie tofacilitate the deired market tranformation thee o,jective6oriented activitie are to ,edefined in a logical frame+ork analyi 'G#$( eAercie that +ill alo define therelevant project outcome0 the achievement of +hich +ill ,ring a,out the removal of ,arrier to the +idepread application of H5BK or other appropriate energy efficient

,rick kiln in the Bangladeh ,rick making indutry. 8hi i vie+ed a an accepta,leolution to reducing high level of "9" emitted ,y eAiting ,rick kiln 'B8K( inBangladeh ,y changing technologie and altering the +ay in +hich ,rickmanufacturer do ,uine. 8he enviioned project +ill demontrate the utili>ation ofthe energy efficient H5BK technology or other energy efficient 'EE( technologie aappropriate0 integrate takeholder into the development and implementation of the project0 ,uild capacity0 train the la,or force0 and train takeholder in theimplementation of ,et management practice. 8he propoed H5BK technology +ill

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provide higher energy efficiencie0 ,etter energy control capa,ili tie0 high rate of production and proceing0 +hich could ,ring a,out reduced production cot andimproved product =uality. 8hee are among the ,enefit that the project +ill ,ringa,out in promoting more energy efficient kiln technologie.

8he main driver of the market tranformation to+ard energy efficient ,rick kiln

+ould ,e:

• demand from ,rick manufacturer ,ecaue the technologie generate higher

efficiencie0 ,etter energy control capa,ilitie0 higher rate of production and proceing0 reduced production and operating cot and improved product=uality

• pu,lic preure from civil ociety and the government on the indutryD to

reduce pollution from ,rick making activitie

• conumer +ho +ill ,enefit from increaed availa,ility of ,etter =uality ,rick

on the Bangladeh market. 8echni=ue and eAperience from other countrieuing H5BK for ,rick making +ill ,e utili>ed0 a appropriate0 in the promotion of H5BK.

3ther driver of market tranformation +ill ,e:

• an increaing demand for the product from cot reduction and =uality

improvement. 8hee +ill lead to increae in hort6run conumption of thene+D ,rick0 and eApanion of long6run aggregate demand +ill occur fromincreae in population and income. 8hi i eApected to lead tocommerciali>ation of the ne+ ,rick making technology and it long6termutaina,ility

• the government? recent deciion to re=uire ,rick maker to enhance the i>e ofkiln to 1!@ ft to reduce local pollution +ould increae capital cot +ithout anyaociated reduction in production cot. Brick maker can only recover theecot ,y increaing price or reducing profit0 neither of +hich are conducive tolong6run utaina,ility. 8hu0 ,rick maker +ill ,e driven to+ard a technologythat i more efficient0 i cleaner and reult in lo+er production cot

• a trengthened regulatory frame+ork and enforcement capacity that i producer

friendly and promote end ue demand.. 8hi +ill occur once an EE ,rick kilntechnology ha ,een accepted a a via,le alternative.

$ num,er of ,arrier0 ho+ever0 need to ,e overcome ,efore the acceptance of the ne+technology . Preliminary dicuion +ith takeholder0 mainly the BBM3$0 a +ell aite viit to a num,er of ,rick making entitie and a urvey of the availa,le literatureindicated that almot all the entitie are operating in the ame traditional manner a theyhave ,een doing for decade. 8herefore0 the entitie are typical of thoe een in motdeveloping countrie0 and hence the major ,arrier to market tranformation are alotypical:

• EAceive reliance on traditional production method

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• Poor and informal organi>ational and management tructure

• 5eaonal0 untrained la,or force

• Gack of acce to capital and reliance on e=uity

• Poor kno+ledge of technological option

• eitance to change attri,uta,le to lack of information and rik perception

• $,ence of regulatory frame+ork and enforcement and

• Gack of incentive.

8he a,ove6lited ,arrier are neither complete nor dicrete in nature. 8heirinterdependence and cauality need to ,e thoroughly analy>ed and evaluated in an G#$eAercie that i enviaged during a P&# B phae. 8he G#$ +ill evaluate iue0 ,arrier and detail pro,lem facing the Bangladeh ,rick making indutry0 there,yenuring a comprehenive analytical frame+ork. $n initial approach to overcoming

,arrier to the diffuion program +ould comprie follo+ing:

• Identification of target group

• &emontration of the ne+ technology in a num,er of pilot plant

• 8raining of kiln operator and fire6mater0 manager and upport taff

• Information diemination amongt propective target group of ,rick kiln

o+ner 'the eAiting B8K o+ner(0 ,anking intitution0 contruction indutry partner and regulatory agencie.

5takeholder Participation

5takeholder interaction i a primary focu of the activitie planned to influence andfacilitate the market tranformation. It i the intent of the project to involve a num,er oftakeholder in the demontration of the techno6economic via,ility of the deign0 a+ell a financing0 intallation0 operation and maintenance of the ne+ technology kiln.Inamuch a the eApected tranformation +ill involve the coordinated and colla,orativeeffort of each group of takeholder0 thi apect of the market tranformation proce+ill alo ,e ho+caed in the demontration component of the project. Each type oftakeholder 'from ,rick kiln manufacturer0 engineer0 deigner0 conultant to theentrepreneur and +orker in the ,rick making indutry0 a +ell a thefinancial4,anking intitution providing financing for indutrie and the contructionindutry( +ill play an important role in the demontration cheme. 5ince there are t+o

main type of ,rick making operation in the country0 t+o comparative demontrationmodel +ill ,e developed for the project i.e.0 the H5BK +ill ,e compared +ith theB8K and the 9offmann kiln. In addition0 it i propoed that demontration cheme+ill ,e featured in t+o eparate etting:

1. $pplication of EE ,rick kiln technology in a private ,rick making company and

!. $pplication of EE ,rick kiln technology in a community6,aed entity

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Idea need champion committed to achieving goal. 8hi propoal recogni>e the needfor championD to promote the technology. 8o+ard thi end0 the project propoe toaem,le a championD group compriing of:

• B%E80 the premier technology intitution of Bangladeh and vie+ed a the

mot repected ar,iter of ne+ technology evaluation ,y the "overnment of

Bangladeh

• the BBM3$0 +ho have ,een active to date in developing thi project0 and +ho

repreent the larget group of it kind in Bangladeh in the promotion0improvement and a+arene of their indutry and

• the ,rick kiln o+ner.

5uch a tructure for takeholder participation and the development of championD +ouldfacilitate a meaningful dialogue ,et+een %N&P and the "overnment of Bangladeh?concerned minitrie that include the Minitry of Environment and #oret0 Minitry ofEnergy and Mineral eource and the Minitry of Indutry. 8hi dialogue +ould ,e ,uttreed againt the technology evaluation of B%E80 the dieminator of the technologyand the BBM3$0 and the opinion of the technology o+ner0 and +ill facilitate policydevelopment and harmoni>ation ,et+een the variou concerned government minitrie.

#inancing Mechanim

8he lack of acce to capital and reliance on e=uity +ere identified a ,arrier to markettranformation of the ,rick production market. 8he majority of Bangladeh? ,rickmaker are mall enterprie o+ned and operated eaonally ,y ingle o+ner relyingentirely on e=uity capital for finance. Mot of them0 eAceeding ;@C0 have ,eenoperating outide the formal ,anking ector. 8hi ha had t+o ignificant reult. #irt0capital invetment to moderni>e plant and e=uipment have not ,een availa,le andecond0 there ha ,een no needD to operate in a formal0 organi>ed manner. *apitalinvetment and varia,le eApenditure have ,oth ,een treated a a ingle cot itemcreating a mind6etD and inhi,iting tranformation of the ,rick making indutryD fromthe traditional to the modern ector. 8he market tranformation concept ,eing promotedin thi project recogni>e thi and propoe the introduction of formal financingmechanim a an important and neceary tep in the tranition proce. It i felt thatinvolvement of the ,anking ector +ill provide much needed capital for ne+ ,rickmaking technologie uch a plant0 e=uipment and +orking eApenditure and lead to thecreation of more formal management tructure +ithin the entitie. 3ne immediate0 pervere effect may ,e an increae in overhead eApenditure and capital cot ,utaving generated from adopting more efficient production and management techni=uehould offet thee additional cot. Producer +ould ,ecome more conciou of production cot and make any neceary adjutment to ,ecome profita,le.

$ a firt tep in thi direction0 the Indutrial Infratructure &evelopment #inance*ompany 'II#&*( ha ,een pre6elected to provide a reource peron to guide thetranformation proce along line that +ould make it more accepta,le to ,ankingneed. 8hi involvement create the neceary ,uy6inD ,y the ,anking ector from thetart and +ill ,uild ,ridge +ith the takeholder. 8he reaon for the pre6election aret+o6fold: firt0 it i a financing company o+ned ,y eleven other commercial financingintitution +hoe chief eAecutive are mem,er of the Board of II#&* and econd0II#&* ha agreed to partially cover the overhead for the reource peron. 8he firt

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enure that there +ill ,e a Lpread6effectD of the effort ,eing made under thi project0and the econd enure commitment on the part of the ,ank.

8he econd track for acce to capital and commerciali>ation are the dicuion thatthe promoter have had +ith the %5$I&? Goan Portfolio "uarantee 'GP"( program. Ineence0 the GP" program under+rite up to /@C of the loan made to entrepreneur

+ho have little or no additional collateral to ena,le them to acce capital financing.$ny ,ank that lend under thi program protect it invetment up to /@C againt poi,le default ,y the ,orro+er. 8he GP" +ould ,e an eAcellent um,rella cheme for ,rick kiln o+ner. 8here have ,een precedent in Bangladeh of the ,anking ector ,ecoming involved+ith non6formal indutrie and marginal income earner. 3ne recent eAample includethe II#&* agreement in March !@@1 +ith the *I&$6funded Bangladeh EnvironmentManagement Project 'BEMP( to provide finance to auto6rickha+ operator for theconverion of their vehicle to dometically availa,le compreed natural ga. hileloan to uch ,orro+er +ould entail a higher rik to the ,anking ector0 the II#&* ,ecame involved a a mean to improve ur,an air =uality in &haka *ity0 +hich till

remain at critically poor level. #urthermore0 rik to the ,anking ector on thicheme +ere to ,e further reduced through the involvement of the %5 $I& GP" program that +ould under+rite loan of up to /@C. *learly0 the ,anking ector inBangladeh ha ho+n +illingne to ,ecome involved in the promotion and financingof clean technologie that +ould improve dometic environmental condition. 8heII#&* ha ho+n a keen interet in thi project.

Pot68ranformation Impact

3n the upply ide0 adoption of the ne+ technology +ill reult in lo+er marginal cotdue to reduction in varia,le cot. 8hi i ,orne out ,y the 12 5&* tudy of theceramic indutry in Bangladeh +hich analy>ed the potential economic ,enefit of the

H5BK ytem +hen compared to the traditional B8K and the more capital intenive9offmann technologie. 8he potential increae in profit ranged ,et+een -@ to 22C.8hee can ,e een from the follo+ing comparion.

1 %58k 2@ 8hree Buine 3ption for Brick maker

*ot #igure in8aka

B8K 9offman H5BK 6 ) haft

Month4Oear -.; 1!.@ 1@.@

Kiln *ot 17!0/@@ 110@@@0@@@ -7/0@@@

8otal Invetment 107;10-! 1)0/!70@// 10@;20/12

Haria,le *ot4%nit 1.@/ 1.1! @.7;

Net Profit 10-@101- -0-!10;/ !0)1)021)

Profit per 1@@@ 2@; 222 2-Breakeven C @ ;2 -1

Pay,ack time 1.! year !.; year @./ year

3+ner Paying 8otal Invetment

Net Profit 102)!0;@2 -0210;/ !0-101;2

Profit41@@@ 7@; 7@7 1@@;

Breakeven C !7 7; 1

Pay,ack time 1.1 year !.7 year @.- year

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5ource: 9enrik Norker0 5&*0 $pril 1-

8he =uetion that arie i: +ill the lo+er marginal cot of the ne+ technologyD ,rick tranlate into lo+er price in the market 8he likely cenario i that ince producer +ill continue to face contant or even riing demand0 they +ill hold price

and increae profit. In the neAt tage0 thi action ,y the producer i not likely todampen demand a long a producer maintain the previou nominal price from theconumer perpective0 they +ill ,e facing contant or even declining real price.

Brick price in Bangladeh have ,een riing in nominal term over the lat 1@ year atan average annual rate eAceeding 1@C. $ part of thi increae can ,e attri,uted to riinginput price and a part to riing demand and upply rigidity. In addition to thi overallincreaing demand0 the diaggregatedD demand for ne+ technology ,rick +ould0 infact0 increae ,ecaue of improvement in =uality. 8he ne+ technologyD ,rick +ould ,e more even0 darker red in color from the oAidi>ing atmophere of the H5BK and thealt content +ould decline.

In the long6term0 demand for improved =uality ,rick +ill eApand ,ecaue of gro+thin ur,an population and ur,an income. In mot developing nation0 ur,an populationgro+ at a rate fater than the overall gro+th rate. In Bangladeh0 the ur,an populationgro+th rate ha ,een phenomenal0 riing from !.2 million in 121 to !!./ million in11. In the cae of &haka0 the rate +a ;C during thi period far eAceeding the 1./Crural gro+th rate and the !./C national gro+th rate. $t thee gro+th rate0 &haka +ill ,ecome the eventh larget city ,y the year !@1/. Even though overall ur,an gro+thrate may flatten ome+hat in the future0 the trend i not eApected to change much inthe intermediate term. 8he correlation ,et+een demand for houing and therefore0 for ,rick0 and per capita income i alo +ell kno+n. 8hi mean a per capita incomerie0 demand for contruction material eApand. $ joint %N4orld Bank tudy in 12 predicted that ;@C of the gro+th in the developing +orld +ould occur in acro it

citie and to+n. In Bangladeh0 per capita income have ,een riing at a,out !./Cannually ,ut it ha ,een gro+ing at a much fater rate in the ur,an area. 8hi i +hy&haka city today contri,ute a,out )1C to the National "&P even though it hare ofthe national population i only 7C. e can therefore0 conclude that the demand for ,etter =uality ,rick produced at lo+er cot in energy efficient kiln +ill increae overtime.

Previou EAample of Market 8ranformation in BangladehPreviou effort to+ard market tranformation ,y the private ector include thefollo+ing project:

• Iodi>ed 5alt Project 6 In the mid 1@0 %NI*E# funded a market tranformationapproach inducing local alt maker to produce iodi>ed alt only. 8he initiative0 in ,rief0 had a t+o6track trategy: legal change to impoe regulatory ,an on theLindutry? and in tandem0 introducing a uita,le technological olution and adoption program that +ould have minimum diruption on the eAiting producer. 8heindutry ha no+ ,een totally tranformed0 and only iodi>ed alt i ,eing produced.

• *N" Project 6 In 10 the *I&$6funded Bangladeh Environment Management



Project 'BEMP( in puruing clean technology option for the tranport ector0developed the technology to convert the highly polluting !6troke auto6rickha+ toena,le them to ue natural ga. Even though the technology proved ucceful andalternate fuel +a 7@C le eApenive0 the tak +a to apply the ne+ technology ona commercial ,ai. 8hi +a a claic market acceptance challenge0 neceitatingemployment of market diffuion techni=ue. 8he project i ongoing and ho+ ign

of developing into a full6,lo+n clean alternate fuel indutry. Preently0 fleet carand government vehicle are ,eing converted to ue *N"0 +ith propect for a*N"6fuelled ma tranit ytem looming on the near hori>on.

8here are other project eAperience and leon learned from imilar project in othercountrie including:

• China: 8he annual production of ,rick in *hina +a a,out ;)@ ,illion during the

@. In 120 the ,rick indutry output value +a a,out %5 17 ,illion. *hina?8HE account for nearly /C of the total ,rick production0 and employ nearly /million people. 8he type of ,rick kiln ued ,y *hinee 8HE are intermittent kiln0annular kiln0 tunnel kiln and vertical haft kiln 'H5K(. 8he H5K are gaining

popularity among the mall and medium cale ,rick making enti tie. 8hi i thetype of ,rick kiln that Bangladeh i intereted in0 and +ill ,e promoted in the propoed project. 8he *hina 8HE Phae ! Project funded under %N&P4"E# +illoon tart operation and +ill ,e +atched cloely for eAperience gained and leonto ,e tranferred.

• India: Modern technologie generally manufacture +ire cut ,rick. 8he

technologie ued are B8K0 continuou kiln and intermittent type of ruralcountry clamp. $nnual production of ,rick in India i a,out 1@@ ,illion0 and theindutry employ a,out 1./ million people. $,out 2@C of the ,rick produced inIndia are from B8K. 8he "3I ha eApreed an interet to +ork to+ard improvingefficiency in fuel ue in thi indutry and0 if materiali>ed0 +ill contri,ute to the

cluter of %N&P4"E# project eAperience in the field.

• Vietnam: Brick kiln ued are modern annular kiln0 tunnel kiln and traditional

vertical kiln. "E#4%N&P45"P ha had ome eAperience in thi ector andfollo+ing an upcoming evaluation of the project the eAperience can oon ,ehared +ith Bangladeh.

. EApected outcome:

$n important aumption in achieving the deired outcome i that the key ,arrier6removing activitie propoed +ill ,e ufficient to ena,le the technology to ,e replicatedon an indutry6+ide ,ai. 5uch an outcome re=uire that all major ,arrier totechnology adoption +ill ,e removed o that the commerciali>ation proce can proceedon it o+n upon project completion. $lthough the frame+ork0 mechanic and pecificcomponent of the ,arrier removing activitie are yet to ,e detailed in an G#$ eAercie0the follo+ing are eApected outcome of the project:

• eduction in "9" emiion

• *ollateral reduction in local pollution

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• &evelopment of ,rick6making entitie into a more formali>ed indutry

• $+arene amongt policy6maker for the need of a regulatory frame+ork that i

,oth producer and conumer friendly

• ide cale availa,ility and accei,ility of financing for energy efficient ,rick

kiln

•

Improved local technical capacity in the deign0 manufacture0 operation andmaintenance of energy efficient ,rick kiln

• Increaed indutry confidence to improve la,or +orking condition and tandard

• Increaed a+arene amongt contruction indutry4,uilder regarding improved

=uality and efficiency cot to foter a market for the ne+D ,rick.

1@. Planned activitie to achieve outcome:

It i aumed that demontration of a more energy6efficient ,rick kiln technologycom,ined +ith other market tranformation activitie uch a removal of ,arrier0takeholder interaction0 a+arene generation0 capacity ,uilding0 retraining of the la,orforce and implementing ,et management practice0 +ill aure replication of the

technology and utaina,ility of the tranformed ,rick production market to enure a+in6+inD ituation. 8he activitie planned for the full project +ill ,e:

• *omponent 1: emoval of 8echnical Barrier to Production of improved Brick

• *omponent !: emoval of $+arene Barrier

• *omponent ): emoval of Intitutional and #inancial Barrier and

• *omponent -: 5ocial Impact $nalyi

• *omponent /: Emiion Monitoring

*omponent 1: emoval of 8echnical Barrier to Production of improved Brick

8hi component +ill involve the follo+ing activitie:

• Evaluation of three technical option for kiln improvement0 i.e.0 an improved B8K

ytem0 a 9offmann kiln and a H5BK ytem

• $nalyi of the technical option that i mot uita,le for Bangladeh ,aed on

technical0 environmental and economic advantage

• &eign and et up t+o demontration plant ,aed on the elected technology at

trategically located ite. EAternal aitance from a elected intitute in India or*hina +ill ,e re=uired for thi demontration

• 3perate the demontration plant for one eaonD under the uperviion of

=ualified foreign peronnel

• Monitor and create a data,ae on all apect of kiln operation including land cot

kiln intallation method and cot kiln operational cot human reourcere=uirement and training production rate =uality of ,rick produced fuelconumption and cot and emiion

• #acilitate partnerhip that +ould encourage adoption of the cleaner technology for

the indutry

• 5ho+cae the technology and dieminate relevant information to indutry

takeholder0 ,rick kiln o+ner0 cutomer0 regulator4government0 civil ociety andthe general pu,lic

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• 3rgani>e and conduct training program to tranfer kill re=uired to implement ,et

management practice to operate and maintain the identified technology

• 8rain a core of elite technician +ho +ould ,e reponi,le for trou,le6hooting

+ithin the demontration program and maintain their ervice throughout the project phae leading up to the market0 and thu creating demand for their ervice.

*omponent !: emoval of $+arene Barrier

8echnology pread among takeholder from early adopterD0 that i people +hoal+ay like to try ne+ thing0 to late adopterD0 that i people +ho are reitant tochange. 3pinion leader are a key element in communication a,out innovation.8herefore0 motivating takeholder to adopt the ne+ technology and make the change ithe major ingredient. 8o do thi0 a utained information regime mut ,e developed anddieminated among takeholder. 8hi regime mut emphai>e the follo+ing:

8he relative advantage of the technology.

hether the technology i compati,le +ith the current tate of ,elief or

,ehavior. 9o+ compleA i it.

9o+ +ell can it ,e adopted.

8he ,enefit that can ,e o,erved.

8he impact of the relevant information.

8herefore0 the activitie planned +ould include:

• *ontinuance of an information diemination program highlighting the advantage

and ,enefit of ne+er EE kiln through the propoed demontration plant. 8hi+ould reduce the u,jective and o,jective uncertaintie of the H5BK or otherappropriate kiln0 amongt potential adaptor to accelerate market tranformation

• *reation and operation of a *enter of EAcellenceD to upport a+arene eminar0 pu,lication of manual and other a+arene material of the EE kiln. 8hi +ouldenhance the image of the indutry and trengthen indutry kno+ledge of optimaloperation and pollution reduction

• 8raining program in the contruction0 operation and maintenance of the EE kiln to

,e delivered ,y a pool of =ualified indutry technology pecialit.

*omponent ): emoval of Intitutional and #inancial Barrier

8hi project component +ill provide the neceary upport for +idepread adoption ofthe ne+er EE kiln or replication of the technological change and to enure there iintitutional and policy upport for the continued ue of clean technologie a "E# and

other eAternal aitance decline to minimal level. 8he activitie planned to contri,uteto the removal of intitutional and financial ,arrier are:

• &eign and develop a tranformation4tranition model to the ne+ technology o that

an ongoing ,rick manufacturing ,uine can ,e tranformed +ith minimumdiruption. 8hi eAercie i eentially recalling the leon of financing ne+technology to operational particular that produce ,rick at a lo+er cot than thoe produced +ith the le efficient B8K

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• &eign and implement an innovative financing plan +ith everal different ,rick

field o+ner to etup more energy6efficient ,rick kiln throughout Bangladeh

• &evelop financial model to ena,le the formal ,anking ytem to eAtend loan to

the indutry. 8hi +ould include aitance from ,anking ector peronnel from dayone to enure ,uy6in ,y the ,anking ector

• *reate a pro6active relationhip ,et+een the BBM3$ and ,anking intitution that

+ould facilitate market tranformation to+ard EE ,rick kiln

• ork +ith and involve international donor agencie0 particularly %5$I&0 that have

on6going program to upport the development of innovative financing cheme ,aed on commercial conideration to enure +idepread adoption of the ne+ EEkiln

• 5ecure agreement for and enure relia,le dometic coal upplie through

involvement of the Minitry of Energy and Mineral eource

• &eign a ,ackup ervice program after the technology changeover. 8hi +ould

ait diffuion of the ne+ EE kiln ,y reducing rik

• &evelop pu,lic6private interaction to trengthen regulatory intrument and

enforcement capacity o that there i accelerated market tranformation to+ard EE

kiln. 8he intention and purpoe of thi activity i not that government intervention+ill enure technology adoption0 ,ut the recognition that government intervention ione tool to enure it adoption. 8he author clearly recogni>e that it i only marketforce that +ill ultimately enure adoption and utain it

• 8ranfer kill that create a+arene and capacity to implement ,et management

practice to operate and maintain ne+ technologie

• In addition to regulatory preure0 involve civil ociety to aure adoption. *ivil

ociety group provide ocial preure0 incentive0 and moral peruaion toencourage change. Ginkage +ill ,e eta,lihed and trengthened +ith group ucha the Bangladeh Environmental Ga+yer $ociation0 the #ederation ofEnvironment Fournalit of Bangladeh and other imilar organi>ation.

*omponent -: 5ocial Impact $nalyi

#or any ne+ technology to +ork0 it mut ,e adapted to the ocial and cultural etting in+hich the technology i ,eing promoted. In Nepal0 the H5BK ytem +orked +ellinitially ,ut the diemination program ha ,een ennared in an intricate controvery ,et+een private entrepreneurhip and government department interetD '5&* 122(. Inaddition0 conflict may emanate from eAiting takeholder and civil ociety. 9ence0there i a need for a ocial impact analyi to identify +hich takeholder are likely to ,e affected ,y the project and ho+ and +hich takeholder could influence thetranformation through upport or oppoition and ho+.

8he market tranformation of the ,rick manufacturing QindutryQ +ill have a ignificantimpact on thoe +ho are directly and indirectly involved. 8hoe directly involved in

,rick making can ,e generally characteri>ed a the very poor0 young0 uneducated andeaonally employed. 8here are a ignificant num,er of +omen and children employedin ome ,rick kiln0 poi,ly in the range of ))C of the +orkforce 'a o,erved duringviit to variou ,rick manufacturing operation(. Poi,le ocial impact of thimarket tranformation +ould include:

afer +orking condition epecially for +omen la,orer

,etter trained +orker and manager

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proviion of teadier employment.

$ctivitie of the 5I$ component +ould include:

• ,aeline ocio6economic urvey on kiln manager0 +orker0 and their familie

focuing on ocio6economic parameter that can ,e monitored for change duringand after project intervention0 and an in6depth analyi of all takeholder andtheir potential vie+ to upporting thi project

• characteri>e current +orking condition0 la,or la+ and regulatory

apect of ,rick manufacturing la,or code

• incorporate ne+ la,or tandard +ith energy efficient ,rick making

technologie and eAtrapolate to ne+ ocio6economic analyi

• invetigate the feai,ility of conducting managerial training that

+ould promote afer +orking environment and maAimi>e +orker productivity.

*omponent /: Monitoring of 8echnology &iffuion0 Emiion and 5ocial Impact

8o enure project ,enefit are ,eing accrued and to provide reult6,aed management0an eAtenive monitoring program hould ,e undertaken. Monitoring activitie +ouldinclude ,ut not ,e limited to:

• !echnology diffusion" $doption of the technology can ,e monitored through

management tructure of the project. If a technology clearing houeD +ereeta,lihed in cloe colla,oration +ith the *enter of EAcellenceD 'of*omponent !(0 technology adoption can ,e cloely and accurately monitored.

• Emissions" 8hi can ,e monitored in t+o +ay: energy conumption per unit of

,rick produced or through emiion monitoring through the moketack of theEE ,rick kiln. Environment *anada have recently developed ne+ e=uipmentto monitor moketack emiion that can ,e eaily adopted on thi project

• Social #mpact" Mot importantly for the monitoring of ocial change on thi project +ould ,e monitoring of +orking condition of thoe directly involved+ith the indutry. *hange in their ocio6economic indicator a +ell a theirtechnical capacity to adapt to the ne+ EE kiln ,uine +ould ,e of interet particularly to thoe concerned at ocial impact reulting from adoption ofclimate change technologie. $nother intereting ocial impact to monitormay,e the reaction of conumer to ne+er higher =uality ,rick that are anoutput of the ne+ EE technology. 8heir acceptance and +illingne to purchaehigher =uality ,rick +ould ,e a crucial indicator of the ucce of markettranformation to+ard EE kiln.

Pre6Project $ctivitie

Prior to project implementation0 certain pre6project activitie +ill ,e carried out thatfocu on preparing plan for project management and implementation arrangement.8hee include:

• Intenive takeholder interaction and conultation to formulate colla,orative

+orking relationhip

• *onduct dek ,aeline analyi to ,ring a high degree of comprehenion of the

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eAiting operation and cot tructure of the Bangladeh ,rick6making entitie

• *onduct a dek tudy eAamining the energy efficient technical and economic

option for the indutry0 revie+ing a num,er of ,rick kiln model and theirucceful operation in other countrie uch a India and *hina

• *onduct conultation +ith the BBM3$ and other indutry repreentative to

enure the feai,ility of adaptation ,y the indutry

• #ormulation of plan in colla,oration +ith takeholder to conduct pilot and

demontration program uing ne+ EE technologie.

• 5ecure takeholder commitment for the project

• #inali>e plan for co6financing of the implementation phae of the project. 8hi

include dicuion +ith %N&P on ,rick kiln +orker training and *I&$ *limate*hange4Environment *anada on proviion of technical aitance in monitoringmoke tack emiion0 and private ector interet.

5takeholder involved in project:&epartment of Environment Bangladeh Brick Manufacturer 3+ner $ociation

'BBM3$( Banking and #inancial Intitution Bangladeh %niverity of Engineering 8echnology and the private ector.

11. Information on project Proponent:

8he project proponent i a conortium of private6pu,lic partnerhip including the&epartment of Environment0 Minitry of Energy Mineral eource0 Minitry ofIndutrie0 Bangladeh %niverity of Engineering 8echnology and *lean Energy$lternative0 a private enterprie involved in promoting clean energy technologie.

1!. Information on propoed eAecuting agency 'if different from a,ove(:

Minitry of Environment #oret

1). Etimated Budget 'in %5 or local currency(:

"E# P&# B Phae: @.)!@ million 8ime: 1; month%N&P 8$*: @.1@@ mill

EApected #ull project:"E#: ).@ million*o6financing: 1./ million '%5$I& GP" #inance0 direct commercial ,ank loan(0 *I&$@./@@ million0 8k /@@ million '"overnment of Bangladeh(838$G: !).!@ million

EApected &ate for #ull Project: #O @/

Implementing $gency contact peron: &r.Nandita Mongia0 "E# egional Manager0 5enior8echnical $dvior *limate *hange0 %N&P4"E#0 Ne+ Oork.

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Brick Kilns Project Concept 12 June 03.Doc