1
USAID/INDIA
STRATEGIC OBJECTIVE CLOSE OUT REPORT
1. Basic Information:
SO Name: Increased Environmental Protection in Energy, 
Industry and Cities
SO Number: 4
SO period: FY1994–2002
Geographic Area (Code): India (386)
Total Cost of SO: DA $126,575,000 
2. Principal Implementing Partners:
Bilateral Projects:
1. Energy Conservation and Commercialization (ECO) - Ministry of Power
2. Greenhouse Gas Pollution Prevention Project (GEP) – National Thermal Power
Corporation (NTPC), Industrial Development Bank of India (IDBI), Industrial
Credit and Investment Corporation of India, Ltd. (ICICI)
3. Energy Management Consultation and Training (EMCAT) – IDBI, Power
Finance Corporation (PFC), Ministry of Power (MOP)
4. Trade in Environmental Services and Technologies/Clean Technologies Initiative 
(TEST/CTI) – ICICI
5. Financial Institutions Reforms Expansion-Debt (FIRE-D) – Ministry of Urban 
Development, National Institute of Urban Affairs
Field Support:
USEPA, IIE, AED, IIEC, ICMA
3. Summary of overall impact:
This SO focused on global climate change, addressed through reducing greenhouse gases
(GHG) in power generation facilities, industry, the transport sector, municipal services and end 
use efficiencies. By working in multiple, mutually reinforcing sectors, this SO was able to achieve 
substantial reductions in GHGs and create opportunities for sustainable development at the local 
level. In addition, catalytic processes were created and networks established to carry this work 
into the future. 
The strategy focused on global climate change issues through reduction of greenhouse gas 
emissions in power generation utilities, industry, and in the transport sector through improved 
energy conversion and end-use efficiencies. Key activities included the Greenhouse Gas 
Pollution Prevention Project (GEP), the Clean Technologies Initiative (CTI) Project, the Energy 
Conservation and Commercialization (ECO) Project, the Energy Management Consultation and 
Training (EMCAT) Project, the Financial Institution Reforms Expansion - Debt (FIRE-D) Project, 
and the South Asia Regional Initiative in Energy (SARI/E) Program. Overall the SO exceeded 
targets with notable successes in ISO 14001 environmental certification in industry, greenhouse 
gas reductions, demand side management, and energy efficiency. Beneficiaries of these activities 
included, at a national level, all Indians who benefit from cleaner air due to clean energy 
technology promoted under GEP and CTI. In addition, electricity consumers who received better 
value for service through ECO demand side management and strengthened electricity regulatory 
bodies were beneficiaries. Under FIRE-D, urban dwellers (particularly the urban poor) benefited 
from improved water and wastewater infrastructure development and from improved quality and 
reliability of power supply. 
2
Given the focus on greenhouse gas mitigation, a challenge the team faced was to constructively 
engage with Indian counterparts given the U.S. position on the Kyoto Protocol. The USAID/India 
program focused on concrete demonstration activities of clean energy technologies. These 
activities were showcased while also sharing the message that the U.S. administration supports 
greenhouse gas mitigation related research, technology transfer, and market-based approaches. 
A second challenge was created by the transition from SO4 to the proposed new strategy. The 
proposed new strategy addressed access to clean energy and water through power distribution 
reform, improving efficiency of the water-energy nexus, and better provision of urban services. 
The office met this challenge by focusing activities so that they contribute to or pave the way for 
the restructured strategic objective that began in FY 2003.
Advancing Regulatory Reforms and Institutional Capacity: USAID's support for power sector 
reform was achieved through our work with the electricity regulatory commissions (ERC), 
collaboration with the Lal Bahadur Shastri National Academy of Administration (LBSNAA) that 
provides training for Indian Administrative Service (IAS) officers, water-energy policy reform 
dialogue at multiple levels, and passage of the Energy Conservation Bill by the Indian Parliament. 
Clean Energy and Sustainable Development (Climate Change Initiative): By the end of the 
strategy period (FY 2002), USAID helped India avoid a cumulative total of 10.5 million tons of 
greenhouse gas emissions. This achievement represents a doubling of the target of 5.28 million 
tons. The exponential growth in this indicator can be attributed to the fact that thermal power 
plants began to actively pursue the efficiency measures promoted under GEP and the sugar mill 
cogeneration activities were very popular. The driver was the significant financial savings in coal 
costs or electricity sale through implementation of these practices. In addition, tremendous 
benefits to the environment and to human health also were achieved. With an initial investment of 
approximately $7 million in sugar mill biomass co-generation, USAID was able to leverage over 
three times that amount in private investment in this developing technology. 
Clean Energy Technology Development and Commercialization: USAID’s efforts (in 
association with industry) to promote environmental management systems and build capacity to 
incorporate clean energy technology have been extremely successful. Fifty-two firms have 
received ISO 14001 certification against a target of 23. Today, Indian industry is actively pursuing 
ISO 14001 certification based on work by USAID and other donors. Limited support is being 
provided for this activity under the current phase of the CTI Project.
Urban Services: The future of India is inescapably urban. Cities have emerged as the prime
engines of economic growth and generators of national wealth. In fifteen years, more than half 
the country’s one billion people will live in cities. A third of them will be slum dwellers and
squatters. Assistance provided by USAID has improved the capacity of municipalities and
expanded their access to urban planning and finance tools which allows them to provide
enhanced urban water and sanitation services. 
In 1992, the 74th Amendment of the Indian Constitution began a process to strengthen municipal 
governments through improved management and service delivery. Under USAID’s FIRE-D 
Project, City Managers Associations have been formed in nine states (with 48% of India's
population) to manage urban growth, mobilize resources, improve infrastructure services and
support the development of a market-based urban infrastructure finance system. 
An example of FIRE/D impact is the work conducted in the city of Indore, which, with a population 
of over 1.64 million, is the largest city in the state of Madhya Pradesh. Realizing that population 
growth would require larger expenditure on services and amenities, the Indore Municipal
Corporation focused on strengthening its revenue base and increasing citizens’ participation in
local governance and service improvement. The revenue department was re-organized to
introduce cash collection counters and decentralize many operations in zonal offices. Accounting 
systems for calculating property taxes, shop rents and trade licenses were improved. A master 
3
data bank was set up to identify illegal electric and water connections and self-assessment of 
property tax by citizens was introduced. According to the Mayor of Indore, computerization,
database creation and simplification of tax-related procedures have helped increase revenue by 
almost 150% from 1997-2002.
4. Summary of activities/ projects under the SO:
1.The Greenhouse Gas Pollution Prevention (GEP) activity resulted in improvement of efficiency 
in thermal power plants and awareness creation among many electric utilities in India. The 
project successfully started sugar mill cogeneration activities with involvement of private sector. 
The activity engaged Indian government and private sector officials in awareness creation and
capacity building across institutions such as non-governmental organizations (NGO), city
governments, academia, financial institutions and private industries on the complex issue of 
global warming and climate change.
2.The Energy Conservation and Commercialization activity (ECO) - Consumer awareness of
energy and water issues, and energy demand management was improved. USAID worked
closely with the GOI on energy conservation legislation - ‘Energy Conservation Act’ which was 
passed in 2001. USAID helped implement the legislation and assisted in defining the structure 
and function of the Bureau of Energy Efficiency – the nodal agency for the implementation of the 
Act. Soon after the declaration, the first government energy audit was the President's house and 
the Prime Minister's office.
3. The Energy Management Consultation and Training activity (EMCAT) - The project provided 
assistance for improvement of efficiency in both energy supply and energy end-use. Support was 
also provided for commercialization of renewable energy technologies. The formation and
strengthening of some of the first electricity regulatory commissions was achieved through
technical assistance, training, and partnership programs with US institutions. Two thousand
people were trained on various issues related to technology management and commercialization 
of the power sector. Renewable energy projects and institutions were promoted. EMCAT was 
important in creating a conducive environment for reform in the India power sector. A formal mid￾term evaluation of EMCAT was completed during 1996 and a lesson learned workshop was 
organized at the conclusion of the project in 2004.
4. Trade in Environmental Services and Technologies Clean Technologies Initiative (TEST/CTI) 
activity - USAID technical assistance under the TEST/CTI activity helped prepare the ground for 
the spread of Environmental Management Systems leading to ISO 14000 certification in India by 
increasing the number of firms that meet these standards in selected industrial sectors (textiles, 
pulp and paper, pharmaceutical, automobile, thermal power, steel and cement). Fifty-two firms 
achieved ISO 14000 certification under the TEST activity. In addition, USAID supported the
Confederation of Indian Industry Green Business Center (GBC) by assisting in the design and 
certification of a state-of-art building that reflects cost effective energy and environmental
management practices and systems. 
5. Financial Institutions Reforms Expansion/Debt (FIRE/D) - The activity helped national, state 
and local governments to develop sustainable, urban environmental services that can be
accessed by the poor. FIRE/D promoted innovative financial mechanisms such as municipal 
bonds and provided municipalities with environmental management tools to assist governments 
in supporting environmental services such as water and sanitation activities. 
5. SO Results Framework:
This SO feeds into the USAID agency objective: “World’s environment protected by emphasizing 
policies and practices ensuring environmentally sound and efficient energy use, sustainable
urbanization, conservation of biological diversity, sustainable management of natural resources”.
4
The intermediate results for the SO were:
IR 4.1 – Increased efficiency and decreased pollution in energy supply and use.
IR 4.2 - Pollution reduced in selected industrial sectors
IR 4.3 - Improved urban environmental infrastructure built and services provided in selected 
states
The success of the activities of this SO was measured by the following illustrative indicators. 
· Carbon dioxide equivalents of greenhouse gas (GHG) emissions avoided.
· Increased number of firms that meet international environmental quality standards in 
selected industrial sectors. 
· Local governments/authorities with urban environmental management tools available to 
them.
These indicators proved to be relatively simple and easy to quantify. Some issues began to 
develop regarding obtaining data from power plants on fuel reductions due to USAID-sponsored 
activities as the utilities thought this information could be used to force a reduction in electricity 
tariff. Data was eventually obtained. 
6. Prospects for long term sustainability and threats:
USAID has actively participated in the energy and environment sectors for many years. Early 
work focused on infrastructure creation. During the 1960’s, USAID financed and helped to build 
many of India’s power plants. Later the focus evolved to promotion of science and technology, 
and in the 1990’s, in response to India’s needs and bilateral relations, the approach evolved 
again to promotion of power sector reform, energy efficiency, market-based approaches, and 
global climate change. 
The new Strategic Objective being implemented during FY03-07 builds on USAID/India’s 
Strategic Objective 04. Four major issues were identified as being of paramount importance 
when considering energy and environment issues in India. These are power distribution reform, 
the nexus between water and energy sectors, global climate change, and urban development. It 
was decided to not explicitly address climate change as an intermediate result, but rather to 
integrate it within the new SO activities. Additional considerations include the modalities of how 
and where to attempt to affect change, given USAID’s limited resources and the size and 
complexity of India.
Interest in the USAID approach is high in certain Indian states (Andhra Pradesh, Rajasthan and 
Uttar Pradesh, for example). Given the size of the country and the sheer scale of the issues 
facing India’s environment and power sector, it makes sense to focus on a few geographic 
locations, where opportunities exist for good collaboration. This will allow for demonstration of 
best practices in a way that will facilitate greater impact and for enhanced potential to replicate 
more broadly as reforms continue to slowly gain ground nationwide. A geographic focus coupled 
with a responsive partner affects sustainability.
A key to USAID success throughout the world and particularly in India is the ability to forge 
partnerships for sharing ideas, leveraging resources, and working synergistically. USAID
continues to follow this model for success by forming partnerships with the diversity of 
stakeholders engaged in areas of common interest. Both public and private partners in India and 
abroad are sought to collaborate on providing improved energy and environmental services. An 
example of this investment in building a viable partnership to carry forward the work is the GBC, 
which now serves as an incubator and clearing house of information for "green" businesses and 
energy efficient technologies.
5
Over the years, USAID has played a valuable role in several key developments, notably: energy 
technology development and commercialization, clean coal technologies; strengthening of 
functional central and multiple state energy regulatory bodies; advancing electrical demand side 
management and end-use energy efficiency improvements; and introduction of private power, 
specifically cogeneration. USAID’s recent work with private distribution utilities and the reform of
State Electricity Boards in Haryana, Rajasthan and Andhra Pradesh and elsewhere has identified 
urban and rural power distribution issues, illustrated methods to improve delivery efficiency, and 
introduced new business processes to implement these solutions. USAID’s training and energy 
partnership activities have also provided nascent regulatory commissions and their staff with 
information and techniques to address issues and resolve problems. 
USAID has worked closely with the World Bank, Asian Development Bank, and the British 
Government’s Department for International Development (DFID) over much of the past decade 
on power sector reform in India. This continued collaboration and ability to leverage resources 
(intellectual, human, and financial) from other donors will be a very significant aspect of future 
work. 
During these decades of bilateral assistance in the energy and environment sectors, many 
lessons have been learned. USAID will continue to capitalize on this accumulated experience to 
better ensure sustainability of activities. 
Work on clean energy and water has significantly advanced India’s capacity to improve access to 
reliable and efficient electricity, institute pollution mitigating programs in industry and transport, 
advance urban water availability, and develop market-oriented approaches to stimulate 
investments in energy efficiency. USAID catalyzed public-private partnerships yielding 
unprecedented results, including the Global Development Alliance-supported Green Business 
Center at Hyderabad, the first of its kind in Asia and the establishment of a highly valued 
partnership between the US Department of Agriculture’s Rural Utilities Service and India’s Rural 
Electrification Corporation will expand electricity access to thousands of Indian villages while 
providing bankable models for replication.
7. Lessons Learned:
Many lessons were learned during implementation of SO4. The discussion below attempts to 
delineate these lessons in the broad categories of policy, people-level impact, capacity building, 
partnerships, environmental friendly business, and team dynamics. 
Policy Level: Though the U.S. was a signatory to the U.N. Framework Convention on Climate 
Change (UNFCCC), it did not support the Kyoto Protocol, which grew out of the UNFCCC and set 
emissions reduction targets and mechanisms for achieving those targets. SO4, led by the 
Greenhouse Gas Pollution Prevention (GEP) project, was able to achieve some significant and 
measurable results in avoiding CO2 emissions. These results were documented and 
disseminated to illustrate the good work the U.S. and India were achieving to address climate 
change. U.S.-India cooperation was showcased by compiling a compendium of climate change 
collaboration and through outreach and communication during the Eighth Conference of Parties 
of the UNFCCC held in New Delhi in October 2002. The consistent message of concrete, on-the￾ground results spread by various U.S. Mission departments to and in collaboration with various 
Indian stakeholders regarding global climate change helped show that the U.S. and India have 
enjoyed great success in jointly pursuing activities that reduce greenhouse gases. During a time 
when U.S. climate change policy was being criticized, the results from the USAID/India program 
were useful to demonstrate that the U.S. was doing a great deal to address climate change. 
A “Joint Statement of Cooperation on Clean Energy” was signed between the U.S. and India 
during the March, 2000 visit of President Clinton to India. For the first time, the GOI publicly 
recognized Global Climate Change as an important issue affecting India and put forward a 
strategy to address the issue under a bilateral framework. The joint statement included specific 
6
energy efficiency and renewable energy goals to meet future energy needs. India further agreed 
to cooperate with the USG in designing market-based mechanisms for reducing greenhouse gas 
emissions. This statement was possible due to the conducive climate established through GEP 
and other USAID/India activities.
The ECO project helped support the development and eventual passage of the GOI’s Energy 
Conservation Act, 2000, which, in turn, led to the establishment of the Bureau of Energy 
Efficiency (BEE). Funds and technical assistance were provided for helping to set up an energy 
efficient office for the BEE and ECO was able to evolve over time to help the BEE implement its 
mandate in Maharashtra and Karnataka.
The EMCAT project prepared the ground for power sector reform in India. The training 
component of this project imparted training to over 2000 people in what reform meant and in how 
to go about achieving it. This created a conducive environment for policy change.
FIRE (D) Project under SO4 was able to initiate legislative reforms at the state and local 
government level through development of a model municipal Act. However, to improve water and 
sanitation delivery in cities and encourage private sector participation, there is a need to develop
a regulatory framework for the water and sanitation sector at the state level.
People Level Impact: India’s economy doubled during the past two decades, hastening 
urbanization and industrialization. As a result, air pollution from industry and vehicular pollution 
increased significantly. The human health and economic costs to India of this pollution are 
enormous. Several activities of SO4 acknowledged this link. These included TEST/CTI, which 
looked at cleaner production systems in industry, or the India Zero Emission Transportation 
(IZET) program to replace conventional two-stroke scooters (two-wheelers) and auto-rickshaws 
(three-wheelers) with electric vehicle technology. SO4 also worked with the U.S. Environmental 
Protection Agency to promote its Memorandum of Understanding with the Ministry of 
Environment and Forests. However, much of the focus of SO4 was on policies or technologies. 
A stronger link could have been drawn to emphasize the results on people.
SO4 activities were able to introduce some new mechanisms for water and sanitation service 
delivery and increase access for low income urban populations. However, large scale awareness 
campaigns need to be initiated in coordination with civil society to clearly articulate the need for
efficient water and sanitation services from the urban local government.
Capacity Building: Capacity building was an important feature in most SO4 activities. 
Under EMCAT Project over 2,000 personnel from energy sector organizations were trained on 
issues related to reform, efficiency improvement, energy supply, as well as energy end use in 
industrial and other sectors. The training programs with a duration ranging from one week to 
three weeks were conducted primarily in India with a few U.S. based training courses.
The LBSNAA program provided strategic training at the Indian Administrative Service (IAS) level 
through development of training modules of energy and environment for various courses 
conducted at LBSNAA. These modules were tested on a few pilot programs and the feedback 
received was very positive. The modules have been handed over to LBSNAA for use in their 
programs both for new recruits and for in-service training programs. This was a relatively low￾cost and very strategic approach to embedding ideas and concepts in the minds of key decision 
makers in India.
The creation of the Center for Power Efficiency and Environmental Protection (CENPEEP) of the 
National Thermal Power Corporation (NTPC) was a worthwhile institutional investment. 
CENPEEP was developed to absorb the technical assistance and training from Tennessee Valley 
Authority, Electric Power Research Institute and other electric utilities on best practices for 
operating coal fired power plants. CENPEEP disseminated these practices within NTPC plants 
7
and to State Electricity Boards in India by developing heat rate guidelines and conducting 
performance optimization audits in power plants and through regular class room training. These 
generation efficiency improvements formed a significant component of the overall Carbon dioxide 
(CO2) avoidance under the SO4 program and have been recognized throughout India and
internationally as world-class practices.
Capacity building of state and municipal officials for improving service delivery has been an 
important component of SO4 activities. However, the capacity building at the state level for 
developing viable water and sanitation projects needs to be intensified followed by capacity 
building at the municipal level on efficient operation, maintenance, and management of municipal 
resources.
Partnerships: The quality of partnerships and the individuals and institutions that have made up 
these partnerships under SO4 have been critical to the success of the objective. Many of these 
partnerships included both public and private sector representatives.
Under EMCAT, the U.S. Energy Association began the Energy Partnership Program. This 
program was very important in launching India’s electricity regulatory commissions and sharing 
best practices with utility companies that helped promote reform. 
IZET is an example of a successful public-private partnership among USAID, Bajaj Auto Ltd; 
India’s largest two-and three-wheeler manufacturer, and New Generation Motors (NGM), an 
innovative U.S. technology firm. The Green Business Center which was conceptualized during 
President Clinton’s March, 2000 visit to India is another such public-private partnership among 
the Confederation of Indian Industry, the Godrej Corporation, the Government of Andhra 
Pradesh, and USAID. 
Environmentally Friendly Business: Activity success was bolstered by the fact that 
environmental protection was linked to economic development. Partners actively pursued 
activities that were environmentally friendly when they also had a positive impact on their bottom 
line.
USAID helped India avoid a cumulative total of 10.5 million tons of greenhouse gas emissions
over the life of SO4. This achievement represents a doubling of the target of 5.28 million tons. 
The exponential growth in this indicator can be attributed to the fact that thermal power plants 
began to actively pursue the efficiency measures promoted under GEP because they helped 
them save fuel costs and provided an environmentally friendly label for them. Sugar mill 
cogeneration activities were also very popular as they provided sugar mills an added revenue 
stream from power sales. With an initial investment of approximately $7 million in sugar mill 
biomass co-generation, USAID was able to leverage over three times that amount in private 
investment in this developing technology. 
Promotion of environmental management systems and building capacity to incorporate clean 
energy technology has been extremely successful. Fifty-two firms received ISO 14001 
certification against a target of 23. Today, Indian industry is actively pursuing ISO 14001 
certification based on work by USAID and other donors. Again, Indian industry wants to protect 
natural resources, but it becomes even more attractive if it makes good business sense. SO4
activities tended to reduce energy costs or were important for global marketing purposes where 
greening the supply chain was gaining prominence.
Financing of projects where fund account reflows were established was an effective and efficient 
use of resources and helped set the stage for future activities. SO4 partner financial institutions,
such as ICICI, have continued to engage and invest in related activities and have leveraged funds 
from other donors for this purpose. 
8
SO4 Team- a success: One element of the success of SO4 was perhaps due to the subject 
itself. Energy and environmental issues tend to be cross cutting in nature. They lend themselves 
to a team approach and towards forging partnerships that tend to carry the activities forward. The 
team approach transcended USAID offices and linked technical and support offices within the 
Mission with external partners from the public and private sector. This broad-based approach 
allowed for activities to be sustained and expanded over time with additional investment from 
outside of USAID. 
8. Evaluations, assessments and studies during life of SO:
A mid-term evaluation of the EMCAT Project was done during February 1996 and based on the 
recommendations of the evaluation team, a new component on regulatory reform and 
restructuring of the power sector was added to the project. Action on the other recommendations 
made by the evaluation team were also taken and implemented. Further, to define the specific 
activities to be taken up under the new reform and restructuring component, a study was 
conducted in March,1997 by an independent consultant and the report detailed various activities 
that could be supported under this component. Accordingly, a scope of work for this activity was 
prepared and technical assistance mobilized for implementation. 
A workshop with participation by USAID and key partners was organized at the conclusion of the 
project discuss the key outcomes and document the lessons learned. This report will be shared 
with the various shareholders and could be useful for follow on work or similar work in other 
countries.
9
APPENDICES
Appendix 1
(A List of evaluations and special studies conducted during the life of the SO)
EMCAT - MSI EMCAT Evaluation Report – February 1996
EMCAT - Project Redesign report, Matthew Addison, March 1997
Appendix 2
(A list of instrument close out reports prepared for contracts, grants, and cooperative 
agreements)
Close-out reports are maintained by Regional Contracting Office, USAID/New Delhi. For any 
information, please contact Mr. Marcus Johnson, Regional Contracting Officer at e-mail: 
mjohnson@usaid.gov
Appendix 3
(Names and contact point of individuals who were directly involved in various phases of 
the SO (planning, achieving, and assessing and learning), and who would be good 
sources of additional information)
USAID staff:
Robert Beckman
Ram Berry
N. Bhattacharjee
Richard Edwards
Richard Goldman
S. Padmanaban
N.V. Seshadri
John Smith-Sreen
Sandeep Tandon
If you wish to contact any of the above individuals or if you would like any additional information 
about this SO please contact Mr. John Smith-Sreen at Tel# 2419-8520 or 
e-mail: jsmith-sreen@usaid.gov