Indo-German development CooperatIon

PrinciPles and Projects to tackle shared challenges

edited by the german embassy new delhi

india 2012

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Dear Readers,

india’s economic development in the last two decades

is beyond doubt a success story. Per capita income has

doubled in the last ten years and the private sector has

registered high levels of investment.

however, there are huge challenges that need to be

tackled. Poverty is still a serious issue. in the wake of

rapid economic growth, the already enormous pres-

sure on the environment, natural resources and infra-

structure has intensified further.

supporting india in overcoming these development ob-

stacles is the aim of indo-german development coop-

eration.

why is german development cooperation engaged in

india? the reason is at least twofold. Firstly, without

development percolating to the masses in india, the

millennium development goals, e.g. halving global

poverty, will not be achieved. germany and india were

among the 189 countries that committed themselves to

these goals at the United nations millennium summit

in 2000.

secondly, germany is keenly interested in protecting

global goods like climate, the environment and inter-

national stability. it is obvious that in this endeavour

india, a subcontinent of more than 1.2 billion people, is

increasingly a key global player.

what does indo-german development cooperation ac-

tually mean? in which sectors are we involved? who are

our partners? answers to these questions are available

in the following pages. however, this brochure can

certainly be no more than a brief overview. For more

and detailed information, we recommend a click on the

respective websites that are mentioned alongside. we

wish you an interesting and informative read.

For

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FOREWORD

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envIronment08 intensifying partnerships through environment management

10 Umbrella programme on natural resource management

12 action plans on climate change

enerGy16 solar power full speed ahead

18 From waste to energy

20 insulation against the heat and cold

SuStaInable eConomIC development24 People, planet, profit

26 small loans - big impact

28 workforce protectionForGInG partnerSHIpSbringing multilateral organisations together

For a better lIFegerman missions in india fund small-scale projects

partnerInG WItH tHe CIvIl SoCIetyworking with ngos, churches, political foundations and more

partnerSHIpS WItH prIvate SeCtorSbringing public and private partners together

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germany and india face shared challenges due to rapid

urbanisation and industrialisation. For example, sustain-

ing urban water bodies, ensuring better local air quality

and sustainable land use.

germany is a world leader in innovative clean technolo-

gies. india and germany are long-standing partners in

this field.

the first memorandum of Understanding (moU) on co-

operation in the field of environmental protection was

signed in september 1998. since then, cooperation has

expanded to management of waste, water and renewable

energies.

germany is supporting india in various areas to develop

sustainable solutions that balance economic growth and

environment conservation.

indo-german development cooperation specifically fo-

cuses on the areas of natural resource management,

sustainable consumption and production, urban environ-

ment protection, climate change adaptation and mitiga-

tion, as well as innovative green technologies.

germany provides about inr 34.45 billion (500 million

euro) annually to india as overseas development assis-

tance − oda (soft loans and grants) − in these areas.

E c O n O m i c g lO b a l i s at i O nmust bE FOllOWED by

EcOlOgicalg lO b a l i s at i O n

economic globalisation is going to create an enormoUs amoUnt oF wealth,

yoU have to manage the whole earth. that is what i call ecological globalisation.

anIl aGarWal, environmentalist, aPril 1999

and we are already beginning to realise that what yoU do in one coUntry will have an environmental imPact

in another coUntry. and thereFore yoU cannot maintain the earth in harmony by only managing yoUr own coUntry.

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there is long-standing cooperation between germany’s gesellschaft für inter-

nationale Zusammenarbeit (giZ) and india’s ministry of environment and Forests

(moeF) in the field of environment management.

Focus areas: strengthen india’s sustainable urban and industrial development efforts

and intensify partnerships between indian and german institutions.

support key indian policy initiatives, such as the national environment Policy, the

national action Plan on climate change, and the jawaharlal nehru national Urban

renewal mission.

successes: introduction of sustainable waste management and development of a

number of city sanitation plans, as well as efficient concepts for drinking water supply

and waste water management in a number of cities.

more achievements: the principles of ecologically sound industrial parks have been

introduced in 30 sectors; a sanitary landfill site for hazardous waste has been built in

karnataka.

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the Umbrella Programme on natural resource management (UPnrm) was

launched in 2009 and is jointly implemented by india‘s national bank for agricul-

ture and rural development (nabard), german government-owned development

bank kfw and giZ.

the programme provides combined packages of loans and grants to financially

viable and small initiatives of ngos, producer companies, corporates and

communities.

UPnrm also promotes environmentally sustainable growth by encouraging private

investments that benefit the poor.

successes: the “umbrella programme” encompassed over 75 projects by august

2011; ranging from forest-based medicinal plants and eco-tourism, to integrated

dairy management in developed watershed areas and other livelihood activities.

over 100,000 participants, of whom approximately 36 per cent are women and 44

per cent from scheduled casts and scheduled tribes, are involved in the projects.

UPnrm will not only help in scaling up existing approaches (watershed and

adivasi development), but will also explore other sub-sectors like forestry,

farming systems management, agro-processing, natural resource based liveli-

hoods and climate change adaptation.

umbRElla PROgRammE On natuRal REsOuRcE managEmEntsupportIng envIronment-FrIenDLYtecHnoLogIes anD practIces

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in 2008, indian Prime minister dr. manmohan singh launched the country’s national

action Plan on climate change.

germany’s giZ is working in collaboration with United nations development Pro-

gramme (UndP), world bank, asian development bank (adb) and Uk’s department

for international development (dFid) to provide inputs to india’s moeF for preparation

of a common framework for the action plans at national and state levels.

madhya Pradesh, rajasthan, tamil nadu and west bengal are the chosen locations

for the project climate change adaptation in rural areas, as they encompass india‘s

differing agro-climatic zones.

giZ, together with kfw, will also be supporting the implementation of the state action

Plans on climate change in selected indian states, especially in the north east of

india.

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energy is a priority issue for india. about 400 million peo-

ple in the country are still without a power connection.

estimates suggest that the total demand for electricity in

india will double by 2030.

germany supports an inclusive energy supply that is

sustainable not only in economic, but also in ecological

terms.

the major objective is to decouple energy consumption

from economic growth.

implementation of reforms in the electricity sector will

facilitate an increased use of renewable resources, im-

prove energy efficiency and promote energy conservation

at all levels of society and in all sectors of the economy.

germany’s kfw has committed inr 96 billion (1.4 billion

euro) in the past five years – an average of inr 19.3

billion (280 million euro) per annum.

additionally, technical cooperation for public and private

partners has been increasing steadily in energy efficiency

and renewable energy sectors, and amounts to a total of

inr 1.7 billion (25 million euro) in the past five years.

PROmOtingincREasED usE OF

gREEn POWERis FOR OuR OWn EnERgy sEcuRity

5% oF the total generation in the coUntry actUally comes From green Power.

dr pramod deo, chairPerson, central electricity regUlatory commission, 2011

india reached 5% level in 2010 and annUally

one Percent is going to add UP to take it to 10% by 2015.

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the government of india has launched the jawaharlal nehru national solar mission

to tackle the twin problems of power deficits and mounting carbon emissions. it sets

an ambitious goal of achieving 20 gigawatt (gw) of solar capacity by 2022, compared

to 109 megawatt (mw) at present.

in august 2011, germany’s kfw signed an inr 17.2 billion (250 million euro) loan

agreement to support the construction of a 125 mw solar photovoltaic plant in the

state of maharashtra.

the sakri solar power plant is india’s first large-scale and asia’s biggest solar photo-

voltaic plant. its total cost is estimated at inr 25.5 billion (370 million euro).

the power plant is due to be commissioned in 2012.

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green elephant group is an indo-german renewable energy company focusing on waste

to energy projects in india.

the company has brought a new technology for processing agricultural residues into

compressed gas to india.

with the construction of its first biogas plant in india’s sugar belt at satara district in

maharashtra, green elephant set up the largest production capacity of this type in asia.

the plant consumes approximately 200,000 m³ of organic sugarcane waste per annum

and generates approximately eight million m³ of gas per annum.

the project was set up in the framework of indo-german financial cooperation and is

financed by the indian renewable energy development agency limited, through a credit

line from kfw.

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in the light of rapid industrialisation, growing urban population and the detrimental effects of

greenhouse gas emissions, energy efficiency is a top priority worldwide.

Under kfw’s support, india’s the energy and resources institute (teri) and germany’s

Fraunhofer institute have jointly adapted an assessment tool for calculating, optimizing and

certifying energy efficiency of buildings.

the software received encouraging responses from all stakeholders and is currently being

applied in the Promotional Programme for new residential housing implemented by the

national housing bank (nhb).

kfw has provided a credit line of inr 3.4 billion (50 million euro) and a grant of inr 137 million

(two million euro) to nhb to develop and finance energy efficient measures in residential

buildings in india.

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despite india’s remarkable economic achievements over

the past 20 years, massive social and regional disparities

remain.

germany supports india’s reform policies geared to-

wards inclusive, and regionally and socially balanced

growth.

indo-german cooperation for sustainable development

is organised around three pillars in this priority area:

financial systems development, private sector develop-

ment and social protection.

in financial systems development, indo-german cooper-

ation targets the provision of adequate demand-oriented

financial services in india. the programmes support

financial inclusion, especially for below poverty line fam-

ilies.

in private sector development, germany’s cooperation

with india addresses responsible business behaviour and

competitiveness. the programme also promotes prop-

erly functioning markets and institutions. additionally, it

encourages an intensive public-private dialogue.

as sustainable and inclusive growth is strongly inter-

linked to social security, germany and india work to-

gether to provide social protection to unorganised work-

ers and below poverty line families. this includes health,

life and accident insurance, and old age pensions, among

others.

the support for the priority area of sustainable economic

development has grown steadily. the total commitments

over the past five years exceed inr 17 billion (250 million

euro).

PEOPlEaRE thE REalWEalth OF natiOns

develoPment is thUs aboUt exPanding the choices PeoPle

Human development report, UndP @ http://hdr.undp.org, 2012

have to lead lives that they valUe. and it is thUs aboUt mUch more than economic growth,

which is only a means - iF a very imPortant one - oF enlarging PeoPle‘s choices

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the indo-german corporate social responsibility initiative seeks to encourage com-

panies, both large and small, to integrate environmentally and socially responsible

practices in their core businesses.

this initiative has been formulated by the indian ministry of corporate affairs with

the support of giZ. it aims to help indian businesses achieve the triple bottom

line − ‘People, profits, planet’.

this project enables a multi-stakeholder dialogue process, involving a wide array of

public, non-governmental and private-sector actors. various studies and surveys are

also conducted.

Pilot schemes: the initiative is currently working with three clusters consisting of

business member organisations representing 100 energy-intensive steel foundries.

a range of simple measures, such as energy efficiency and safe and hygienic working

conditions are being implemented. the number of clusters is now set to rise to

18, involving 25 business member organisations.

another success: the corporate social responsibility voluntary guidelines 2009 lay

down the fundamental principles of responsible business behaviour and competitive-

ness. these guidelines are applicable to all businesses, irrespective of size, sector or

location.

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through the cashpor micro credit programme, germany’s kfw seeks to improve

access to finance by the poor and financially excluded households.

this will contribute to household asset creation, sustainable income generation,

poverty reduction and growth.

cashpor micro credit exclusively targets below poverty line households and works in

the villages of Uttar Pradesh, where no other microfinance institution is present.

through an inr 5.8 billion (85 million euro) credit line from kfw to the small indus-

tries development bank of india (sidbi), refinancing support is being extended for

sub-loans to microfinance institutions in order to scale up microfinance activities.

cashpor is one of the many microfinance institutions supported under this pro-

gramme.

additionally, inr 116 million (1.7 million euro) has been provided to further enhance

sidbi’s capacities, to develop rating, appraisal and risk assessment tools and to train

selected partner microfinance institutions.

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the indo-german social security Programme (igssP) provides technical advice to the

indian ministry of labour and employment for the implementation of the Unorganised

sector workers’ social security act, and to help improve the social security system for

workers in the unorganised sector and their families.

salient points of igssP: health insurance, old age pensions, life and accident insurance,

promoting coherence between different social security systems and supporting an indo-

german social policy dialogue.

support for india’s rashtriya swasthya bima yojana (rsby) is one of four components of

the igssP.

germany’s giZ has been directly involved in the design and implementation of rsby since

2008. rsby is an extremely innovative approach to health insurance—a whole family gets

health insurance coverage, cashless and paperless, made possible by a smart card.

in the years to come, this rsby smart card could also include a variety of additional ben-

efits and services, e.g. motherhood benefits or food subsidies.

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Partnerships between the private sector and the state

are pivotal to fostering sustainable development.

with its Public-Private Partnership (PPP) strategy, the

Federal ministry for economic cooperation and de-

velopment (bmZ) intends to strengthen the concerted

action of official development cooperation and private

business activity.

germany’s develoPPP.de programme combines the

strengths of public and private partners: development

partnerships are planned, financed and implemented

jointly.

the aim of develoPPP.de is to mobilise additional contri-

butions from the private sector, utilize private manage-

ment know-how with a view to more efficient service

delivery, and promote private-sector investment as a

growth engine for india’s development process.

For example, through kfw, germany is supporting india

in developing a national PPP capacity development

Programme. a grant of inr 48 million (euro 700,000)

will assist india’s ministry of Finance in improving the

knowledge and skills of up to 4,000 public officials

throughout india.

india and germany’s kfw are establishing a national

urban infrastructure scheme that focuses on promoting

PPP infrastructure projects in urban areas. it provides

long-term financing for investments in environmental

infrastructure, such as water supply, sewerage and

waste water, and solid waste management.

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india is germany‘s biggest partner in ngo cooperation.

among the most important german ngos, in terms of

financial engagement, are karl kübel Foundation,

jugend dritte welt, Ärzte dritte welt and andheri hilfe.

Fields of work: rural development, poverty reduction,

establishment of social and institutional structures,

food aid, emergency and refugee aid, education, voca-

tional training, health and engagement in the area of

environment.

example: in cooperation with the indian ngo Unnati, the

malteser international runs a project of strengthening

community resilience and social inclusion of marginal-

ised dalit and tribal communities in western rajasthan.

the church development service (eed) and

misereor support programmes and projects in

india.

Fields of work: inte gra ted rural development, promotion

of sustainable agricultural practices, improvement of

livelihood opportunities, education, health, and initia-

tives in community develop ment.

example: eed supports an ngo, Unm-m, in manipur

that works to reduce the impacts of ethnic conflict,

especially on women and children. misereor supports

butterflies, a voluntary organisation working with street

children since 1989.

bmZ promotes the activities of seven agencies that are

engaged in social structure assistance in india-arbei-

terwohlfahrt, education centre of the confederation

of german trade Unions, bremen overseas research

and development agency (borda), deutscher caritas-

verband, german cooperative and raiffeisen confed-

eration, institute for international cooperation of the

german adult education association, and social and

development aid of the kolping society.

Fields of work: establishing and strengthening self-help

organisations, especially cooperatives, adult education

and sector-specific development projects and pro-

grammes.

example: borda is promoting a project for decentral-

ised watershed systems in india. the project supports

small and medium sized enterprises, institutions and

communities in planning, designing and constructing

effective, reliable, cost-efficient and custom-made waste-

water treatment systems.

Political foundations represented in india: Friedrich

ebert Foundation (Fes), konrad adenauer Foundation

(kas), Friedrich naumann Foundation (Fnst), hanns

seidel Foundation (hss), heinrich böll Foundation

(hbs) and rosa luxemburg Foundation (rls).

key aim: Fostering sustainable development and

strengthening partnerships, e.g. in a dialogue with po-

litical parties, organisations, and sustainable promotion

or establishment of democracy and civil society.

example: training programme for small and medium

enterprises by kas. assisting the continuation of eco-

nomic reforms at the state level, especially in the areas

of investments, state finance and good governance with

a mid-term multifaceted consultancy and workshop

project.

the bmZ-funded weltwärts-programme is a volunteers’

service plan created in 2008. it aims to promote inter-

cultural understanding. by mid 2010, 322 young german

volunteers were placed in india for about one year,

mainly in ngos dealing with health and environment-

related issues.

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through their grants, the german diplomatic and

consular missions in india provide direct financial as-

sistance to indian ngos and religious institutions for

implementation of small-scale projects for the benefit

of disadvantaged groups of society.

this programme is funded by the german Federal min-

istry of Foreign affairs.

Preference is given to projects in the sectors of poverty

reduction, public health & sanitation improvement,

income generation and basic education.

the gender equality policy of the project is of particular

importance. For example, providing equal access to re-

sources such as education, information, income, energy,

drinking water and infrastructure, as well as tangibly

improving women’s lives in the project area.

FOR a bEttER liFEgerman mIssIons In InDIaFunD smaLL-scaLe projects

some of the projects include drinking water tubewells

for poor rural/tribal communities, electrification of rural

community buildings with solar energy panels, pur-

chase of medical equipment for orphan centre/hospital

for the poor, equipment for setting up a bakery as vo-

cational training for street children, special typewriting

machines for the blind, and furniture for rural schools.

For application guidelines, log on to www.india.diplo.de

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germany works with the european Union, adb, the world

bank, and UndP in the field of development cooperation.

multilateral efforts are an important pillar of indo-ger-

man development cooperation.

since 1976, the european commission (ec) has been ex-

tending assistance to india and is currently focussed on

the areas of environment, public health and education.

between 2007-10, a grant of inr 18 billion (260 million

euro) was committed. For 2011-13, an amount of inr

14.5 billion is foreseen.

another important partner: india and germany are found-

ing members of the asian development bank (adb).

From 1986 to 2009, adb provided more than inr 998 bil-

lion ($20 billion), mostly committed to the area of infra-

structure. it also covers coastal protection, management

investment and the promotion of clean and renewable

energy. in 2011, adb extended an inr 369 billion ($7.4

billion) loan for sustainable growth.

in terms of volumes, the world bank (wb) is the most

important partner of india, with a total proposed lending

of inr 698 billion ($14 billion) for 2009-2012.

wb funds focus on helping india fast-track the develop-

ment of its much-needed infrastructure.

United nations development Programme (UndP) has

been india’s partner in development since 1951.

UndP assists india through sustainable human develop-

ment with priority on poverty alleviation, gender equity,

women’s empowerment and environmental protection.

UndP support to the government of india for the period

2008-2010 has been inr 2.5 billion ($51.5 million). most

of this was spent in the area of democratic governance.

UndP’s focus states: bihar, chhattisgarh, jharkhand,

madhya Pradesh, orissa, rajasthan and Uttar Pradesh.

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the german ministry For economic cooPeration and develoPment (bmZ)

develops the guidelines and the fundamental concepts on which german development

policy is based. it lays down the long term strategies for cooperation with the various

actors involved and defines the rules by which these are translated into practice.

the deUtsche investitions- Und entwicklUngsgesellschaFt (deg),

a subsidiary of the kfw group, provides long term finance and advice to german and

international private enterprises from partner countries with a view to invest in places

where no such services are available in the local market. it offers equity capital,

mezzanine finance, loans and guarantees.

deg oFFice new delhi

mr armin albert, office director

21, jor bagh, new delhi 110003, india

e mail: deg@degindia.com

www.deginvest.de

the deUtsche gesellschaFt Für internationale ZUsammenarbeit (giZ)

is responsible for technical cooperation (tc). it provides technical, economical and

organisational knowledge and skills to strengthen the capacity of individuals and

organisations. in addition to its work for the german government, giZ is active on

behalf of international clients (partner countries, eU commission) trough giZ

international service.

giZ oFFice india

mr stefan helming, country director

21, jor bagh, new delhi 110003, india

e mail: giz-indien@giz.de

www.giz.de

the kfw development bank is responsible for financial cooperation (Fc). Fc supports

partner countries in the financing of innovative solutions important for development.

kFw oFFice new delhi

mr oskar von maltzan, director

21, jor bagh, new delhi 110003, india

e mail: kfw.newdelhi@kfw.de

www.kfw-entwicklungsbank.de

publISHed by:

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© january, 2012

Phone: +91 11 44199 153

email: wz-11@newd.diplo.de

editors: bernd dunnzlaff, jens Urban

managing editor: yvonne krause

text: sakshi arora

circulation: 8500

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