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Chapter 2 - Key Areas of U.S. Assistance-Driven Market Opportunities

The U.S. Strategic Plan for International Affairs calls for a sustainable global environment to protect
the United States and its citizens from the growing threat of international environmental degradation.
Environmentally focused foreign assistance addresses this goal, providing resources to promote sustainable development through technical assistance, creation of special credit funds, and direct procurement. U.S. assistance for alleviation of environmental problems and sustainable development is provided primarily under the auspices of the U.S. Agency for International Development (USAID), with complementary and cooperative efforts of the U.S. Department of Energy (DOE), the U.S. Environmental Protection Agency (EPA), and the activities of a variety of other government agencies. Specifically, USAID initiates activities to achieve two strategic goals:

1. Reduce long-term threats to the global environment, particularly biodiversity loss and climate change; and
2. Promote sustainable economic growth locally, nationally, and regionally by addressing unsustainable environmental, economic, and development practices.

USAID Programs
The Development Assistance Account makes up the core of USAID’s sustainable development
programs. Through the Development Assistance Account, USAID has requested $290 million in
environmental funds for development assistance to support international efforts to reduce the threat of
climate change, conserve biodiversity, provide for sustainable urbanization and pollution control,
facilitate environmentally sound energy supply and consumption, and promote sustainable management of natural resources in fiscal year (FY) 2000. This funding is carried out through programs contracted by the Global Bureau, four Regional Bureaus (for Latin America and the Caribbean, Sub-Saharan Africa, Europe and the Newly Independent States, and Asia and the Near East), or country Missions. Through the Development Assistance Account, USAID supports technical assistance, training, and procurement of technologies.

A number of other USAID grant funds also promote sustainable development in developing countries:

• The Economic Support Fund provides assistance to support democracy and economic development, as well as to respond to emerging global environmental crises such as climate change and biodiversity loss.
• The Support for East European Democracy Fund emphasizes the transition from communism
to democracy and market economies in Eastern Europe and provides assistance for the development of free trade and open markets.

• The Freedom Support Act Fund focuses on rebuilding support for democratic and economic
reforms in the Newly Independent States, including reforms in the power sector encouraging
privatization and energy efficiency.

Loans and Guarantees
USAID also operates a number of loan and guarantee funds that offer resources for environmental
programs. USAID’s credit guarantee programs with an emphasis on environmental programs include:

Urban and Environmental Credit Program: USAID extends guarantees to U.S. private sector investors who make loans to developing countries to meet environmental and housing needs. These activities are targeted to meet the needs of low-income communities with an emphasis on addressing the urban and environmental problems that impair human health, decrease child survival, and prevent economic growth. The Urban and Environmental Credit Program is being phased out in 2000.

Development Credit Authority (DCA): DCA leverages USAID resources through the use of market rate loans (for up to 20 years) and guarantees to finance development projects that are both environmentally sound and credit-worthy. DCA assigns special importance to global climate change-related projects. Loan amounts are in the range of $2-20 million, depending on the project. Loan guarantees cover no more than 50 percent of the lender’s risk of loss. Both U.S. and non-U.S. firms are eligible to apply to USAID Missions for DCA assistance.

Interagency Agreements/Memoranda of Understanding

Interagency agreements provide an additional vehicle through which USAID funds environmental programs and activities. These programs are typically carried out as joint efforts between USAID and other agency partners (EPA, Department of Commerce and DOE). DOE’s and EPA’s own funds are usually directed at the implementation of specific intergovernment agreements that the United States concludes with other countries. For example, DOE’s work in China and EPA’s in Russia are the result of agreements between these U.S. agencies and their counterparts in China and Russia.

The following three sections review major global and regional U.S. Government programs that strive to improve the environment by funding technical assistance and technology transfer on issues related to water supply and sanitation, greenhouse gas mitigation (energy efficiency and renewables), and industrial cleaner production. Specifically, the chapter focuses on those programs that have provided or are likely to provide new or additional market opportunities for U.S. businesses. Combined with the specific information resources identified in chapter 3 and the country case studies in chapter 4, it can be used as a starting point for understanding the interests and priorities of U.S. foreign assistance, and the ways these programs can be leveraged to create opportunities in environmental technology

Water Supply and Sanitation

Water supply and sanitation are key components of many USAID environmental initiatives. Access to clean water is also a crucial element of the agency’s health and child survival programs. To help alleviate the social and environmental problems associated with scarce or contaminated water, USAID provides technical assistance to strengthen water sector institutions, increase water use efficiency, and improve the management and quality of water supply and wastewater treatment in developing countries.

Global USAID Water-Related Programs. One vehicle USAID has developed to address the broad scale of activities required for water management is the Integrated Water and Coastal Resources Management Indefinite Quantity Contract (Water IQC). The Water IQC is intended to be an umbrella contract coordinating USAID’s water programs around the world. Through the Water IQC, which began in 1999 and will continue through 2004, as much as $120 million has been set aside by USAID, from which USAID Missions can develop their own programs to address country-specific needs.

Although the Water IQC is still relatively new, it is expected that major programs will be undertaken in the Middle East (Morocco, Egypt, Jordan, and the West Bank and Gaza) and Central Asia (Turkmenistan, Kazakhstan, Uzbekistan, Tajikistan, and Kyrgyzstan), with a focus on utility management improvements and development of water resources sustainability policies. In Central America, some funds designed to repair damage caused by Hurricane Mitch will be used to improve and repair the water and wastewater infrastructure. Programs in the South African Development
Community, the Caribbean, and Southeast Asia are expected to target watershed and coastal zone

A second IQC with an emphasis on the provision of water supply and sanitation is the Environmental
Engineering IQC (1998-2003). It is anticipated that $25 million will be spent on water management and engineering through this vehicle. The Engineering IQC covers:
• design, engineering, and construction;
• operation and management,
• maintenance and rehabilitation;
• project planning, development, and appraisal;
• institutional strengthening and policy reform; and
• restructuring and privatization studies.

Under the Engineering IQC, an evaluation of water supply alternatives in Oman analyzed the condition of potable groundwater wells, brackish groundwater wells, and seawater supply sources in four cities in Oman. The project team successfully identified, ranked, and recommended interim measures and long-term alternatives for local water supplies including the need for new facilities and water supply technologies.

The largest USAID country program in the water sector (both in terms of equipment procurement and technical assistance) is carried out in Egypt. It is discussed in detail in chapter 4.

USAID’s $86 million Environmental Health Project (EHP, 1993-2004) addresses environment-related health problems by reducing exposure to adverse environmental conditions in 38 countries around the world. The technical assistance provided by EHP includes development of community-based environmental health programs, training for health, environmental and community organizations and creation of guidelines and standards for sanitation and water supply appropriate to serve the needs of the community.

US-AEP Assistance in Sales of Wastewater Treatment Systems in Korea

Following the award of a US-AEP Technology Fund Grant (see chapter 3) Aqua-Aerobic Systems
of Rockford, Illinois, won a $2 million contract for the sale of its equipment and processes for biological treatment of wastewater to a Korean municipality. The sale was achieved after several years of promotional efforts by the company and more than two years of business counseling by US-AEP Technology Representatives. As a result of the initial marketing and sales, two additional Korean municipalities are interested in the firm’s technologies.

Source: Update, US-AEP, August 2, 1999

Although EHP is called upon to provide technical assistance for the development of water supply and
wastewater treatment facilities, the opportunities for U.S. suppliers of technologies and services created by the Project are often limited because U.S. technologies are often too sophisticated for most developing countries, and are not easily adapted to local needs.

USAID Disaster Assistance Programs. A substantial portion of U.S. disaster assistance to developing countries focuses on restoring and improving population’s access to safe water supply and sanitation in the wake of major natural disasters such as hurricanes, floods, and droughts. Short-term relief projects usually include procurement and supply of small water purification units, while larger rehabilitation projects may undertake major infrastructure improvements in urban and rural areas. U.S. disaster relief and rehabilitation aid is administered by USAID’s Office of Foreign Disaster Assistance (OFDA) whose total FY 2000 budget is $165 million, supplemented by funding from several other USAID programs.

In the wake of Hurricanes Mitch and George that devastated Central America and the Caribbean in the fall of 1998, that region has been the largest recipient of water supply-focused disaster relief. In May 1999, Congress passed the Emergency Supplemental Appropriations Act, creating the Central
American and Caribbean Emergency Disaster Recovery Fund (CACEDRF), which contains a total of $621 million in reconstruction assistance. These funds will be spent over the next two to three years. USAID and over a dozen other federal agencies are now involved in the reconstruction of the region. Honduras has received the largest amount, $90 million, which will be used to repair, rebuild, or rehabilitate rural water supply and sanitation systems. Other key target countries include Nicaragua ($25.1 million), El Salvador ($3.5 million), the Dominican Republic ($7.5 million), and Haiti ($0.6 million).

Elsewhere in the world, USAID disaster assistance currently focuses on Southern Africa, ravaged by severe floods, and sub-Saharan Africa, which is suffering from droughts.

Along with regular USAID water-related programs, disaster relief aid offers attractive opportunities for U.S. suppliers of water supply and sanitation equipment. However, to take advantage of these opportunities, companies should be well-established, have experience with government contracts, and be able to react quickly to the market demand.

Water and Wastewater Technology Promotion Initiatives. The U.S. Government’s bilateral assistance programs in the water sector play an important role in demonstrating U.S. technologies in new markets.

Rehabilitation of Urban and Rural Water and Sanitation Systems in Honduras

With OFDA emergency funds and Child Survival supplemental funds, USAID’s Honduras Mission
(USAID/Honduras) is working with the National Water Authority (SANAA) to repair and rebuild
damaged water and sanitation systems in areas most affected by Hurricane Mitch. USAID/Honduras has already provided assistance for emergency repair of some 173 water and sewage systems, including that of the capital, Tegucigalpa.

The majority of over 1,683 rural systems still require substantial repair or total rebuilding. This work is expected to restore the share of rural families who have access to safe water and sanitation from 35 percent to at least 60 percent. USAID funding will be used for procurement of pipes and other construction and repair materials, vehicles and equipment, as well as skilled labor to support and monitor field implementation.

In urban areas, USAID will rehabilitate and reconstruct more than 60 major water supply systems
and over 30 sanitation systems in secondary cities and small town throughout the country. This rehabilitation work will go beyond emergency repairs to rebuild systems to quality standards and ensure their long-term viability. USAID funds will cover design work and construction.

Source: USAID, 2000

The United States-Asia Environmental Partnership (US-AEP) has a dual focus: industrial cleaner production and urban infrastructure development including water supply and sanitation. US-AEP’s programs related to industrial cleaner production are discussed in chapter 2. Through its partnership with the American Consulting Engineers Council (ACEC), US-AEP’s Environmental Infrastructure Program supports the development of viable municipal infrastructure services in Asia, including water supply, wastewater treatment, and solid and hazardous waste management. US-AEP partnerships link the growing environmental infrastructure needs in Asia with U.S. environmental technologies, services, and management techniques.

The Environmental Infrastructure Program provides the following services:
• Identification and dissemination of trade leads on environmental infrastructure projects,
• Organization of workshops and trade shows highlighting U.S. technologies,
• Provision of market information and contacts, and
• Study tours providing opportunities for Asian officials to learn firsthand about U.S. technologies
and services.

Over the eight years of the US-AEP program, the Environmental Infrastructure Program has been involved in numerous projects providing over $500 million of business to U.S. companies. To support the development of programs and business opportunities in urban infrastructure, US-AEP provides staff for the Offices of Urban Infrastructure located in Ahmedabad, India; Jakarta, Indonesia; Manila, Philippines; and Bangkok, Thailand. The Urban Environmental Infrastructure Representatives provide services to Asian companies, serving as specialists trained to help match Asian needs for infrastructure technologies and services with U.S. providers. ACEC’s office in Manila coordinates activities with the Urban Environmental Infrastructure Representatives. Additionally, US-AEP provides a liaison to the Asian Development Bank in Manila, Philippines. The liaison is a commercial environmental specialist with the Asian Development Bank (ADB) who works closely with US-AEP representatives to identify opportunities for U.S. firms and to foster collaborative efforts between US-AEP and ADB. All of these US-AEP representatives are available to provide assistance
to U.S. companies seeking opportunities to enter or expand their presence in Asia’s water and wastewater infrastructure market.

Drinking Water Demonstration Project, Ecuador

Under the Environmental Pollution Prevention Project with support from U.S. TIES, technical
demonstrations for drinking water purification systems were conducted in Ecuador in 1995-1998. Watersolve International, Inc., of Colorado was selected from several U.S. technology vendors to be the supplier of point-of-entry (POE) and point-of-use (POU) systems for three sites. The urgent need for drinking water purification technologies in Ecuador offers opportunities for U.S. suppliers of POE/POU systems.

Source: Environmental Pollution Prevention Project, Final Report, 1998.

In Mexico, Ecuador, China, and India, EPA’s U.S. Technologies for International Environmental Solutions (U.S. TIES) program (1994-1996) designed demonstrations of community drinking water and wastewater treatment systems. Carried out in cooperation with universities and private companies, these demonstration projects helped schools, hospitals, and local communities develop low-cost and easy-to-maintain sources for safe drinking water while opening up doors for U.S. technology vendors.

Climate Change Mitigation: Energy Efficiency and Renewable Energy

For many years, USAID had been implementing environmental and energy programs that, though focused on other objectives (e.g., energy efficiency and air pollution abatement), have had a direct impact on greenhouse gas (GHG) emissions. In 1997, the U.S. Government committed $1 billion over five years to facilitate technology transfer and collaboration with developing nations and countries in transition to reduce the threat of climate change. USAID, DOE, and EPA are the principal U.S. Government agencies conducting this effort.

Capacity building and technology transfer are obligations of the United States as a developed country
under the United Nations Framework Convention on Climate Change (UNFCCC). The USAID Climate Change Initiative (1998-2002) encompasses several programs to encourage “climate-friendly” trade and investment. USAID helps countries shape markets through policy reform and capacity building to accelerate the commercialization and dissemination of climate change mitigation technologies. USAID places particular emphasis on partnerships with the private sector, collaboration and coordination with other bilateral and multilateral donors, and the use of credit to foster trade and investment in environmental technologies. The agency also promotes the “flexibility mechanisms” (emissions trading, joint implementation, and the clean development mechanism) under the Kyoto Protocol as ways to facilitate technology cooperation.

USAID helps finance climate change-related projects by leveraging multilateral resources and
channeling private investment. In addition, the newly established Development Credit Authority (DCA) will permit USAID to leverage commercial capital for climate-friendly investment projects. The DCA will guarantee $50 million in commercial loans to support the U.S. GHG initiatives in FY 2000.

USAID currently has climate change-related activities under way in 44 countries throughout the
world, most of them supported by DOE and EPA. The agency expects to concentrate its resources on the 12 countries and regions that contribute most to GHG emissions and are receptive to U.S. assistance: Brazil, Central Africa, Central America, Central Asia, India, Indonesia, Mexico, Philippines, Poland, Russia, South Africa, and Ukraine. At least 40 percent of USAID’s grant assistance and two-thirds of USAID’s use of credit instruments to combat climate change will be devoted to these priority countries and regions. (Although China is a very large emitter of greenhouse gases, USAID currently does not operate in China, so U.S. climate change assistance is provided by DOE and EPA.)

Under the Energy and Environmental Technology IQC (Energy IQC), USAID provides services in climate change mitigation, energy sector policy planning, energy efficiency, energy network engineering and technical rehabilitation, renewable energy, and energy and environmental technology transfer. The Energy IQC is a three-year global umbrella contract (with a possible two-year extension) with a total value of $200 million. Since the Energy IQC’s inception in 1998, 53 projects have been undertaken in 16 countries.

The main programmatic areas of U.S. climate change mitigation-related support in developing and
transition countries are outlined in the following subsections.

Technology Cooperation Agreement Pilot Project (TCAPP) . In August 1997, three U.S. Government agencies-USAID, EPA, and DOE—launched the Technology Cooperation Agreement Pilot Project (TCAPP), intended to serve as a model for climate change technology cooperation with developing
countries. Through TCAPP, developing countries are designing and implementing actions to attract investment in clean energy technologies that will meet their economic development goals while mitigating GHG emissions. The governments of Brazil, China, Kazakhstan, Mexico, and the Philippines have participated in TCAPP since its beginning, with Korea joining the program in early 1999 and Egypt later in the year. TCAPP is also assisting 14 countries in the South African Development Community with a regional cooperation needs assessment initiated in late 1999.

In each participating country, TCAPP facilitates voluntary partnerships between the government, the
private sector, and the donor community on a common set of actions that will advance implementation of clean energy technologies. These actions may include:
• Implementing policy reforms to remove legal and institutional barriers to clean energy development;
• Convening investment conferences to help local companies find investment partners in the United States;
• Carrying out demonstration projects;
• Assisting local clean energy businesses in securing financing for business growth and technology implementation; and
• Implementing outreach and training programs to encourage host country businesses to invest
more in clean energy technologies.

The countries participating in TCAPP have defined their technology priority areas and are developing and implementing technology cooperation actions for each priority area. Highlights for each country are presented in table 1.

The National Renewable Energy Laboratory leads the implementation of TCAPP, and the Business Council for Sustainable Energy—an umbrella organization for companies in the natural gas, renewable energy, and energy efficiency sectors with alliances worldwide—coordinates private-sector participation activities.

Partnership Initiatives. The U.S. Government actively supports the development of industry-to-industry partnerships to support joint initiatives in energy efficiency and climate change mitigation.

Over the past several years, in collaboration with the United States Energy Association (USEA), USAID’s Energy Partnership Program has paired over 50 utilities in 21 developing and transition countries with sister U.S. utilities. Each utility pair has a specific work plan structured to introduce demand-side management, and increase generation or transmission and distribution efficiency. Utilities cover the costs of personnel. USAID covers out-of-pocket expenses. Not only has the program improved operational efficiency of the partner utilities and reduced their environmental impacts, it has also stimulated sales of U.S. technologies and opened the door to emerging markets for U.S. utilities.

International Utility Efficiency Partnerships, Inc. (IUEP) is an initiative of the Climate Challenge, a joint program between DOE and the electric utility industry. The purpose of the IUEP is to identify international energy project development opportunities, support joint implementation project investment and development activities, and demonstrate U.S. commitment to voluntary approaches to global climate change issues. IUEP has established a program to solicit, evaluate, and fund project proposals from U.S. utilities and energy companies interested in developing and implementing
international projects that avoid, reduce, or mitigate GHG emissions in a credible, creative, and cost-effective manner.

Table 1 - Summary of Country TCAPP Activities
Technology Priorities
Selected Actions under TCAPP
Brazil•Energy efficiency in diesel truck cargo transportation
• Conversion to natural gas
• Electrical energy efficiency
• Fuel cell
• Renewable energy in rural electrification
Solicitation for Expanded
Renewable Energy Field Test
Development of a cooperative
R&D strategy for ethanol-based
fuel cells
China•High-efficiency power generation technology,specifically circulating fluidized bed combustion
•High-efficiency electric motor
• Advanced industrial boiler
• Wind power generation
In-depth technology market
analysis for wind energy and
efficient motors, technology
cooperation actions proposed
Lead points of contact for
boilers and clean coal
technologies to be established
in the United States and China
Egypt• Industrial energy efficiency,conversion to natural gas
•Lighting efficiency
• Renewable energy in rural area
• Small -scale cogeneration application
Technology priorities to be
approved by the National
Climate Change Committee
Kazakhstan• Fuel switching, heat rate improvement, gas combined cycle in the power sector
• District heating efficiency improvement
• Wind power
• Small -scale hydropower
Investment project under development for:
• small -scale hydropower
• mall combined heat and power systems
• utilization of gas from oil refineries
Mexico • Nationwide expansion of efficient lighting in public building
• Solar water heating pilot program
• Nationwide expansion of team generation and distribution systems
Potential energy efficient lighting projects developed
Solar Water Heating Program expanded
Philippines • Renewable energy for rural development (photovoltaic ,wind power)
• Demand-side management programs: energy-efficient boiler,appliance, and equipment
Policy reforms facilitating investment in clean energy technologies being implemented
Investment projects being developed
Rep. of Korea• Methane recovery from organic waste Specific actions being developed

IUEP and USEA have established the International Climate Change Project Fund (ICCPF), funded by USAID’s Office of Energy, Environment and Technology. The objective of the ICCPF is to provide funding support to U.S. investor-owned utilities and other energy companies that are seeking to assess and implement specific projects to avoid, reduce, and mitigate the climate impacts of GHG emissions in USAID-assisted countries in Asia, Africa, and Latin America. The fund would provide support of pre-investment project analyses with an average contribution up to $100,000 per analysis. The selected projects must be likely candidates for follow-on funding from private-sector financial institutions, export credit agencies, and/or multilateral development institutions.

With funding from USAID and DOE, the Alliance to Save Energy has developed the Energy Efficiency Industry Partnership Initiative, which works closely with suppliers of energy-efficient equipment and services to communicate the benefits of energy efficiency around the world. Through these efforts, U.S. energy efficiency companies 3 have an opportunity to raise awareness about their products and services, and meet potential customers, distributors, and partners. Over the past three years, the Alliance has organized 19 energy efficiency seminars in 14 cities in Mexico, China, India, the Philippines, and several other countries.

Power-Sector Energy Programs. USAID has provided substantial resources to assist developing
countries with power-sector restructuring and privatization. These initiatives tend to focus on institutional strengthening, policy support, development of power sector laws and regulations, and design of market-based incentives for energy efficiency, and rural electrification. The restructuring and privatization activities provide opportunities for U.S. investors in power-sector generation and transmission systems and suppliers of turbines, meters, wires, and other power equipment. The
demand created by U.S. assistance in the power sector includes both direct procurement and opportunities created through a more open market.

Electric Metering Equipment Supply Opportunities in Armenia

The Armenian Metering Improvement Project, a follow-on initiative to the NIS Energy Sector Institutional Reform Project, provided the U.S.-based ABB T&D Company an opportunity to enter the Armenian market for the first time. The meters supplied by ABB will replace old metering equipment within the transmission network and will be installed at key measuring points in the distribution network as well. ABB has delivered about 12,000 meters and 400 transformers.

This USAID-funded contract directly resulted in the market penetration for ABB. ABB has now signed an umbrella contract with the Government of Armenia aimed at long-term investments in the Armenian energy sector.

Source: Project Manager for Armenian Metering Project, Hagler Bailly Services.

Through the five-year, $75 million USAID sponsored Energy Sector Institutional Reform Project
for the Newly Independent States (1993-1998), teams of energy sector restructuring specialists assisted the governments of 12 countries of the former Soviet Union (Newly Independent States), including Russia, Ukraine, Armenia, Georgia, and Kazakhstan. Under this project, USAID conducted work in three functional areas:
• Reform of energy policies, regulation, and pricing;
• Restructuring and privatization of energy companies and attracting private investment in the energy sector; and
• Operating efficiency improvements in energy companies (e.g., power, oil, and gas) and district
heating enterprises.

Under the Energy Sector Institutional Reforms Project, USAID procured approximately $2 million in
commodities, including:
• Energy auditing and diagnostic equipment,
• Information technology equipment, and
• Electric metering and distribution equipment.

The Energy Efficiency Project (EEP) was a $16 million program (1992-1998) offering global technical and management services to the public and private sectors of developing countries to help them address the challenges of developing efficient, reliable, safe, and cost-effective energy sectors. The project targeted 15 developing countries and emerging economies, including Mexico, Indonesia, India, Russia, Brazil, Philippines, and Morocco. Regional programs under EEP addressed energy issues in South and Central America, Southeast Asia, and the Newly Independent States. EEP helped developing country governments incorporate energy efficiency into power-sector reform initiatives. For example, in Brazil, EEP designed a regulatory structure that is most conducive to efficiency in electricity supply. It is difficult to determine, however, whether these general improvements in the energy efficiency investment climate will lead to increased opportunities for U.S. equipment suppliers.

USAID’s power sector programs currently continue under the Energy IQC.

Industrial Energy Efficiency Programs
• Under the International Industrial Efficiency Assessments Program, DOE is providing technical support to and collaborating with developing countries to encourage and implement measures that increase industrial energy efficiency and productivity. DOE and U.S. universities participating in the Industrial Assessment Center program are helping developing countries provide technical and
institutional recommendations to local manufacturing plants.
• Within the framework of the International Motor Challenge Program, DOE’s Office of Energy Efficiency and Renewable Energy is partnering with developing countries to build on the U.S. experience and implement country-specific programs to help local manufacturers reduce energy costs and increase productivity through improved industrial motor systems. The program has already been initiated in China, India, and South Africa, and can serve as a model for Latin America. In China, DOE is working to facilitate the development, commercialization, and use of high-efficiency motors, motor speed controls, and other technologies and practices to improve motor system efficiency. A study of the Chinese motor market, funded by DOE, was conducted by the American Council for an Energy Efficient Economy with the Beijing Energy Conservation Institute and the Shanghai Electric Apparatus Institute. In addition, the U.S. team provided data on U.S. motors programs and products to China and is helping U.S. motor manufacturers assess opportunities for joint ventures in China.

Industrial energy efficiency programs under EEP focused primarily on the use of efficient motors (in
Mexico, India, and Indonesia), steam systems (in Mexico), and industrial heating ventilation and air-conditioning systems (in Brazil). Using a combination of facility audits and educational programs, EEP created demand for energy-efficient industrial technologies in these countries.

Commercial and Residential Energy Efficiency Programs. U.S. bilateral programs promoting commercial and residential energy efficiency focus on developing energy efficiency standards for buildings and electrical equipment, and promoting energy-efficient lighting, building materials, and appliances. This work started under EEP and continues under a range of current U.S. Government assistance programs.
• The Asia Sustainable Energy Initiative, a project of USAID’s Global Environment Center, organized technical training for professionals from India, Indonesia, and the Philippines on the implementation of workable, results-oriented energy labeling programs adapted to their respective countries. The training examined the role of energy efficiency labeling in promoting the manufacture, marketing, and purchase of electrical equipment, such as refrigerators, residential air conditioners, lighting systems, and motors. As a result of this training activity, it is expected that product standards, testing, and labeling programs on electric equipment will be established and/or improved in participating countries, potentially creating a significant market for U.S. exports of such equipment.

EPA promotes and supports voluntary energy efficiency program development in several countries.
For example, in South Africa, EPA is working with the Green Buildings for Africa program, providing technical assistance support for program design through the International Institute for Energy Conservation. Also in South Africa, DOE is developing energy standards for buildings.

EPA’s Energy Efficiency Buildings Project in China consists of activities to assist China in developing its institutional capacity to support programs to improve the energy efficiency of buildings. The activities focus on data collection and development, market analysis, and the identification of key market and institutional barriers to energy efficiency. The data developed will support Chinese efforts to seek international funding for expanded activities to promote energy efficiency in the buildings sector. EPA also provides technical assistance to assess and promote market transformation efforts to increase the market penetration of energy-efficient air conditioners in China.

Renewable Energy Programs. USAID has established a network of Renewable Energy Program Support Offices (REPSOs) in a number of developing countries (e.g., India, Brazil, and the Philippines). These in-country facilities are managed by local institutions and are designed to provide the technical and financial assistance necessary to help identify and evaluate renewable energy projects, to build local capacity in renewable energy and accelerate its commercialization, and increase access to energy in rural areas. For example, REPSO/Brazil works with cooperatives, nongovernmental organizations (NGOs), and private companies interested in nonhydroelectric renewable energy projects, and establishes linkages with relevant U.S. renewable energy companies.

U.S. DOE is engaged in many countries in promoting renewable energy technology cooperation. For
example, DOE and the Russian Ministry of Fuel and Energy launched a joint program for technical
collaboration on renewable energy resources. Several demonstrations include small wind turbines, photovoltaic power generators, as well as wind/diesel hybrid systems in 21 sites in northern Russia, all of them using U.S. technology. U.S. DOE’s economic feasibility analysis of a 470 kW wood-waste biomass electric power plant led to the World Bank authorization of a loan for up to $3 million to build the facility.

DOE is collaborating with the National Renewable Energy Laboratory and the governments of Argentina, Brazil, and Chile to facilitate greater use of renewable energy in these countries. Activities include demonstrating commercially viable wind, photovoltaic, and hybrid technologies that are appropriate for local conditions; as well as establishing institutional, individual and business partnerships necessary to implement sustainable renewable energy programs.

Utilizing the strengths of several partnerships, DOE is collaborating with USAID and Sandia National
Laboratories to initiate programs throughout Central America focused on the sustainable use of renewable energy technologies as part of infrastructure rebuilding efforts in the wake of Hurricane Mitch. This effort includes providing technical assistance, training, and assistance in the implementation of pilot projects.

In the area of rural electrification services, USAID’s Global Environment Center supports the National Rural Electric Cooperative Association’s identification of affordable options for the provision of electrical services to rural areas. DOE also provides technical assistance to support the development of pilot renewable energy and hybrid electrification projects. DOE’s Village Power 2000 program is a public-private partnership working to mobilize resources from the U.S. Government, other donors, the private sector, and NGOs to identify and promote project opportunities, facilitate partnerships, and assist in overcoming technical, institutional, and financial barriers to the provision of energy services to rural populations.

U.S. Country Studies Program. The U.S. Country Studies Program (CSP) was initiated in 1992 by DOE and EPA with USAID support to facilitate the participation of developing countries and countries with economies in transition under the United Nations Framework Convention on Climate Change. The CSP offers funding and expert assistance for:
• Creating a national inventory of GHG emissions, assessing vulnerabilities to climate change, and evaluating strategies for mitigating emissions and adapting to potential impacts;
• Creating a process for developing and implementing climate change-related policies and measures;
• Preparing climate change action plans;
• Promoting diffusion of mitigation and adaptation technologies; and
• Developing information to further regional, national, and international discussions.

Funded and staffed by multiple U.S. Government agencies, the CSP is currently assisting 56 countries in every region of the world. This assistance indirectly contributes to creating markets in these countries for U.S.-manufactured climate change mitigation technologies.

Industrial Cleaner Production

USAID spearheads the U.S. Government’s foreign assistance programs in industrial cleaner production, providing technical assistance to encourage the widespread adoption of environmental management systems, pollution prevention practices, and cleaner technologies in industry. Through the Energy IQC, US-AEP, and USAID Mission-specific projects in Peru, Mexico, the Philippines, Bolivia, and Egypt, USAID is implementing a strategy to create sustainable programs and institutions to promote cleaner production in three areas:
• Development of financing sources for cleaner production through attracting other multilateral and bilateral donor support;
• Building of local technical capacity through audits and training; and
• Creation of a policy framework that would provide incentives for industry to invest in cleaner production.

Cleaner Production Initiatives in Latin America. The Hemispheric Free Trade Expansion Program (HFTE) for Latin America and the Caribbean is designed to advance environmentally sound trade in the hemisphere through the integration of policy, technology, and financing considerations. Among other efforts, it contributes to developing replicable models for environmentally sustainable practices in mining, metal finishing, food processing, and leather tanning in the Andean region. Under HFTE, USAID has sponsored a number of regional activities focused on the mining sector (conferences, cleaner production manuals, and policy development), with particular emphasis on Bolivia and Peru.

Under a $2.8 million cooperative agreement with the Environmental Export Council (EEC), USAID seeks to promote U.S. cleaner technologies to the private sector industries in Latin America. EEC’s programs in Central America and Mexico target specific industries such as cement, tourism, food processing, textiles, and electroplating. A separate program in the Andean region is working to create a revolving loan fund for investments in cleaner technologies and practices. EEC also provides support for training, workshops, seminars, conferences, and other venues through which U.S. companies disseminate information about their technologies to industries and municipalities in Latin

Cleaner Production Initiatives in Asia. The United States-Asia Environmental Partnership (see also chapter 3) is playing an active role in promoting cleaner production in 11 Asian countries. Under the Clean Technology and Environmental Management Program, US-AEP has activities in the following areas:
• Corporate environmental management: promoting the adoption of ISO 14001 environmental management systems;
• Voluntary business standards: working with industry associations and multiplier groups to promote the adoption of voluntary business standards, e.g., the U.S.-modeled Responsible Care program for chemical manufacturers;
• Greening the supply chain: engaging U.S. and Asian multinational companies in promoting corporate environmental policies and practices among their suppliers; and
• Environmental due diligence: working with banks, investment companies, and insurance organizations to foster the adoption of environmental criteria as part of their lending practices.

US-AEP’s specific export promotion initiatives are described in chapter 3.

Table 2
Key Industry Sectors Assisted by EP3 Country Programs
Food Processing

Environmental Pollution Prevention Project. The Environmental Pollution Prevention Project (EP3) was a five-year, $22 million effort (1993-1998) sponsored by USAID to address urban and industrial pollution and environmental quality in 18 developing countries. EP3 influenced industry behavior by conducting plant-level assessments of over 300 industrial facilities worldwide, promoting technology development and transfer through demonstration projects, and mobilizing access to investment capital. EP3 helped industries understand the need for and benefits of pollution prevention and environmental management in general, and designed several models for promoting these practices in various industrial sectors. Table 2 highlights EP3’s involvement in different industrial sectors in selected countries.

By design, EP3 focused primarily on no-cost/low-cost process efficiency improvements that bring
immediate, substantial, and visible benefits, thereby promoting higher levels of adoption of pollution
prevention techniques. Therefore, EP3 created demand mostly for process control equipment rather than expensive cleaner process technologies. EP3 recommended over $13 million worth of investments in nine countries (see table 3).
Table 3
Potential Investments Recommended by EP3
Number of Facilities
Investments Recommended

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